TIDM32SS
RNS Number : 8384K
National Bank of Canada
30 August 2023
National Bank of Canada
August 30(th) , 2023
Regulatory Announcement
Q3 2023 Results
National Bank of Canada (the "Bank") announces publication of
its Third Quarter 2023 Report to Shareholders. The Third Quarter
Results have been uploaded to the National Storage Mechanism and
will shortly be available at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism and is
available on the Bank's website at
https://www.nbc.ca/en/about-us/investors/investor-relations/quarterly-results.html
To view the full PDF of this Third Quarter 2023 Report to
Shareholders, please click on the following link:
http://www.rns-pdf.londonstockexchange.com/rns/8384K_1-2023-8-30.pdf
National Bank reports its results for the Third Quarter of
2023
The financial information reported in this document is based on
the unaudited interim condensed consolidated financial statements
for the quarter and nine-month period ended July 31, 2023 and is
prepared in accordance with International Financial Reporting
Standards (IFRS) as issued by the International Accounting
Standards Board (IASB), unless otherwise indicated. IFRS represent
Canadian generally accepted accounting principles (GAAP). All
amounts are presented in Canadian dollars.
MONTREAL, August 30, 2023 - For the third quarter of 2023,
National Bank is reporting net income of $839 million, up 2% from
$826 million in the third quarter of 2022. Third-quarter diluted
earnings per share stood at $2.36 compared to $2.35 in the third
quarter of 2022. For the third quarter of 2023, adjusted net
income(1) totalled $790 million, down 4% from $826 million in the
same quarter of 2022, and third-quarter adjusted diluted earnings
per share(1) stood at $2.21 compared to $2.35 in the third quarter
of 2022. Revenue growth in all of the business segments, aside from
the Financial Markets segment, was partly offset by higher
provisions for credit losses. Adjusted income before provisions for
credit losses and income taxes(1) stood at $1,184 million in the
third quarter of 2023, an increase from $1,179 million in the same
quarter of 2022.
For the nine-month period ended July 31, 2023, the Bank's net
income totalled $2,567 million, down 3% from $2,645 million in the
same period of 2022. Nine-month diluted earnings per share stood at
$7.23 versus $7.53 in the same nine-month period last year. These
decreases were partly due to higher non-interest expenses and
higher provisions for credit losses. For the first nine months of
2023, adjusted net income(1) totalled $2,542 million, down 4% year
over year, and nine-month adjusted diluted earnings per share(1)
stood at $7.15 compared to $7.53 in the first nine months of 2022.
Revenue growth in all of the business segments was offset by higher
non-interest expenses and higher provisions for credit losses.
Nine-month adjusted income before provisions for credit losses and
income taxes(1) rose 3% year over year.
"The Bank reported solid third-quarter results, supported by
revenue and earnings growth, in our Personal and Commercial
Banking, Wealth Management, and U.S. Specialty Finance and
International segments, partly offset by a less constructive
backdrop in the Financial Markets segment," said Laurent Ferreira,
President and Chief Executive Officer of National Bank of Canada.
He added that "The Bank's performance highlights the strength of
our strategic positioning in a challenging macroeconomic
environment. With our high capital levels, strong earnings power,
and constant discipline on managing cost and credit, the Bank is
well-positioned to navigate continued uncertainty and generate
long-term profitable growth."
Highlights
(millions of Canadian Quarter ended July Nine months ended
dollars) 31 July 31
------------------------- --- --- ------------------------------- -----------------------------------
2023 2022(2) % Change 2023 2022(2) % Change
-------------------------------- ---- ------- -------- ----- ------- --------
Net income 839 826 2 2,567 2,645 (3)
Diluted earnings per
share (dollars) $ 2.36 $ 2.35 - $ 7.23 $ 7.53 (4)
Return on common
shareholders'
equity(3) 16.2% 17.9% 17.2 % 20.1%
Dividend payout ratio(3) 41.3% 34.4% 41.3 % 34.4%
------------------------- ------- ---- ------- -------- ----- ------- --------
Operating results -
Adjusted (1)
Net income - Adjusted 790 826 (4) 2,542 2,645 (4)
Diluted earnings per
share - Adjusted
(dollars) $ 2.21 $ 2.35 (6) $ 7.15 $ 7.53 (5)
Return on common
shareholders'
equity - Adjusted(4) 15.3% 17.9% 17.0 % 20.1%
Dividend payout ratio -
Adjusted(4) 41.6% 34.3% 41.6 % 34.3%
------------------------- ------- ---- ------- -------- ----- ------- --------
As at
July
31, As at
October
2023 31, 2022
--- -------------------- --- --- ---- ------- -------- ------ ----------- --------
CET1 capital ratio under
Basel
III(5) 13.5 % 12.7%
Leverage ratio under
Basel III(5) 4.2 % 4.5%
------------------------- ------- ---- ------- -------- ----- ------- --------
(1) See the Financial Reporting Method section on pages 3 to 6
for additional information on non-GAAP financial measures.
(2) For the quarter and nine-month period ended July 31, 2022,
certain amounts have been adjusted to reflect a change in
accounting policy related to cloud computing arrangements. For
additional information, see Note 1 to the audited annual
consolidated financial statements for the year ended October 31,
2022.
(3) For details on the composition of these measures, see the
Glossary section on pages 51 to 54 in the Report to Shareholders -
Third Quarter 2023 , which is available on the Bank's website at
nbc.ca or the SEDAR website at sedar.com.
(4) For additional information on non-GAAP ratios, see the
Financial Reporting Method section on pages 4 to 10 in the Report
to Shareholders - Third Quarter 2023 , which is available on the
Bank's website at nbc.ca or the SEDAR website at sedar.com.
(5) For additional information on capital management measures,
see the Financial Reporting Method section on pages 4 to 10 in the
Report to Shareholders - Third Quarter 2023 , which is available on
the Bank's website at nbc.ca or the SEDAR website at sedar.com.
Personal and Commercial
- Net income totalled $328 million in the third quarter of 2023
versus $319 million in the third quarter of 2022, a 3% increase
that was driven by growth in total revenues, tempered by higher
non-interest expenses and higher provisions for credit losses.
- Income before provisions for credit losses and income taxes
totalled $527 million in the third quarter of 2023, up 9% from $483
million in the third quarter of 2022.
- At $1,140 million, third-quarter total revenues rose $97
million or 9% year over year due to an increase in net interest
income (driven by growth in loan and deposit volumes) and to a
higher net interest margin.
- Compared to a year ago, personal lending grew 2% and commercial lending grew 9%.
- The net interest margin(1) stood at 2.34% in the third quarter
of 2023, up from 2.17% in the third quarter of 2022.
- Third-quarter non-interest expenses stood at $613 million, up
9% from the third quarter of 2022.
- Third-quarter provisions for credit losses rose $26 million
from third-quarter 2022, mainly due to higher allowances for credit
losses on impaired loans.
- At 53.8%, the third-quarter efficiency ratio(1) compares to
53.7% in the third quarter of 2022.
Wealth Management
- Net income totalled $183 million in the third quarter of 2023,
a 5% increase from $175 million in the third quarter of 2022.
- Third-quarter total revenues amounted to $629 million compared
to $591 million in third-quarter 2022, a $38 million or 6% increase
driven by growth in net interest income and fee-based revenues.
- Third-quarter non-interest expenses stood at $375 million, up
7% from $351 million in third-quarter 2022.
- At 59.6%, the third-quarter efficiency ratio(1) compares to
59.4% in the third quarter of 2022.
Financial Markets
- Net income totalled $205 million in the third quarter of 2023,
down 27% from $279 million in the third quarter of 2022.
- Third-quarter total revenues on a taxable equivalent basis
amounted to $560 million, down $51 million or 8% year over year
given a decrease in global markets revenues, partly offset by
growth in corporate and investment banking revenues.
- Third-quarter non-interest expenses stood at $272 million
compared to $254 million in third-quarter 2022, an increase that
was partly due to wages and employee benefits as well as the
segment's technological investments.
- Provisions for credit losses of $5 million were recorded in
the third quarter of 2023 compared to credit loss recoveries of $23
million recorded in the third quarter of 2022.
- At 48.6%, the third-quarter efficiency ratio(1) on a taxable
equivalent basis compares to 41.6% in the third quarter of
2022.
U.S. Specialty Finance and International
- Net income totalled $128 million in the third quarter of 2023
compared to $125 million in the third quarter of 2022, as growth in
total revenues was offset by higher non-interest expenses.
- Third-quarter total revenues amounted to $292 million, a 7%
year-over-year increase driven by revenue growth at both the
Credigy and ABA Bank subsidiaries.
- Third-quarter non-interest expenses stood at $100 million, a
16% year-over-year increase attributable mainly to business growth
at ABA Bank.
- Provisions for credit losses remained stable compared to the third quarter of 2022.
- At 34.2%, the third-quarter efficiency ratio(1) compares to
31.5% in the third quarter of 2022.
Other
- There was a net loss of $5 million in the third quarter of
2023 compared to a net loss of $72 million in the third quarter of
2022 , a change arising mainly from a higher contribution from
treasury activities as well as a gain of $ 91 million ($67 million
net of income taxes) recorded in the third quarter of 2023 as a
result of a fair value remeasurement of an equity interest , partly
offset by an expense of $25 million ($18 million net of income
taxes) related to the retroactive impact of the changes to the
Excise Tax Act.
Capital Management
- As at July 31, 2023, the Common Equity Tier 1 (CET1) capital
ratio under Basel III(2) stood at 13.5%, up from 12.7% as at
October 31, 2022, notably due to the positive impact of
implementing the Basel III reforms.
- As at July 31, 2023, the Basel III(2) leverage ratio was 4.2%,
down from 4.5% as at October 31, 2022.
Dividends
- On August 29, 2023, the Board of Directors declared regular
dividends on the various series of first preferred shares and a
dividend of $1.02 per common share, payable on November 1, 2023, to
shareholders of record on September 25, 2023.
(1) For details on the composition of these measures, see the
Glossary section on pages 51 to 54 in the Report to Shareholders -
Third Quarter 2023 , which is available on the Bank's website at
nbc.ca or the SEDAR website at sedar.com .
(2) For additional information on capital management measures,
see the Financial Reporting Method section on pages 4 to 10 in the
Report to Shareholders - Third Quarter 2023 , which is available on
the Bank's website at nbc.ca or the SEDAR website at sedar.com
.
Financial Reporting Method
The Bank's consolidated financial statements are prepared in
accordance with IFRS, as issued by the IASB. The financial
statements also comply with section 308(4) of the Bank Act
(Canada), which states that, except as otherwise specified by the
Office of the Superintendent of Financial Institutions (Canada) (
OSFI), the consolidated financial statements are to be prepared in
accordance with IFRS, which represent Canadian GAAP. None of the
OSFI accounting requirements are exceptions to IFRS.
The presentation of segment disclosures is consistent with the
presentation adopted by the Bank for the fiscal year beginning
November 1, 2022. This presentation reflects a revision to the
method used for the sectoral allocation of technology investment
expenses, which are now immediately allocated to the various
business segments, whereas certain expenses, notably costs incurred
during the research phase of projects, had previously been recorded
in the Other heading of segment results. This revision is
consistent with the accounting policy change applied in fiscal 2022
related to cloud computing arrangements. For the quarter and
nine-month period ended July 31, 2022, certain amounts have been
adjusted to reflect this accounting policy change. For additional
information, see Note 1 to the audited annual consolidated
financial statements for the year ended October 31, 2022.
Non-GAAP and Other Financial Measures
The Bank uses a number of financial measures when assessing its
results and measuring overall performance. Some of these financial
measures are not calculated in accordance with GAAP. Regulation
52-112 Respecting Non-GAAP and Other Financial Measures Disclosure
(Regulation 52-112) prescribes disclosure requirements that apply
to the following measures used by the Bank:
-- non-GAAP financial measures;
-- non-GAAP ratios;
-- supplementary financial measures;
-- capital management measures.
Non-GAAP Financial Measures
The Bank uses non-GAAP financial measures that do not have
standardized meanings under GAAP and that therefore may not be
comparable to similar measures used by other companies. Presenting
non-GAAP financial measures helps readers to better understand how
management analyzes results, shows the impacts of specified items
on the results of the reported periods, and allows readers to
better assess results without the specified items if they consider
such items not to be reflective of the underlying performance of
the Bank's operations. In addition, like many other financial
institutions, the Bank uses the taxable equivalent basis to
calculate net interest income, non-interest income, and income
taxes. This calculation method consists of grossing up certain
revenues taxed at lower rates (notably dividends) by the income tax
to a level that would make it comparable to revenues from taxable
sources in Canada. An equivalent amount is added to income taxes.
This adjustment is necessary in order to perform a uniform
comparison of the return on different assets regardless of their
tax treatment.
The key non-GAAP financial measures used by the Bank to analyze
its results are described below, and a quantitative reconciliation
of these measures is presented in the tables in the Reconciliation
of Non-GAAP Financial Measures section on pages 4 to 6 and in the
Consolidated Results table on page 13 in the Report to Shareholders
- Third Quarter 2023, which is available on the Bank's website at
nbc.ca or the SEDAR website at sedar.com. Note that, for the
quarter and nine-month period ended July 31, 2023, a gain of $91
million ($67 million net of income taxes) recorded upon the fair
value remeasurement of an equity interest and an expense related to
the retroactive impact of the changes to the Excise Tax Act of $25
million ($18 million net of income taxes) were excluded from
results. In addition, for the nine-month period ended July 31,
2023, a $24 million tax expense related to the Canadian
government's 2022 tax measures was also excluded from results. No
specified items had been excluded from results for the quarter and
nine-month period ended July 31, 2022.
For additional information on non-GAAP financial measures,
non-GAAP ratios, supplementary financial measures, and capital
management measures, see the Financial Reporting Method section and
the Glossary section, on pages 4 to 10 and 51 to 54, respectively,
of the MD&A in the Report to shareholders for the Third quarter
of 2023, which is available on the Bank's website at nbc.ca or the
SEDAR website at sedar.com.
Reconciliation of Non-GAAP Financial Measures
Presentation of Results - Adjusted
Quarter ended
(millions of Canadian dollars) July 31
------------------------------ --------------- ----------- --------- ------ ---------------------
2023 2022(1)
------------------------------ --------------- ----------- --------- ------ ----- ----- -------
Personal Wealth Financial
and Commercial Management Markets USSF&I Other Total Total
----------------------------- --------------- ----------- --------- ------ ----- ----- -------
Net interest income 837 192 (397) 273 (35) 870 1,419
Taxable equivalent - - 86 - 2 88 60
Net interest income - Adjusted 837 192 (311) 273 (33) 958 1,479
------------------------------ --------------- ----------- --------- ------ ----- ----- -------
Non-interest income 303 437 807 19 79 1,645 994
Taxable equivalent - - 64 - - 64 11
Gain on the fair value
remeasurement
of an equity interest(2) - - - - (91) (91) -
Non-interest income - Adjusted 303 437 871 19 (12) 1,618 1,005
------------------------------ --------------- ----------- --------- ------ ----- ----- -------
Total revenues - Adjusted 1,140 629 560 292 (45) 2,576 2,484
------------------------------ --------------- ----------- --------- ------ ----- ----- -------
Non-interest expenses 613 375 272 100 57 1,417 1,305
Expense related to changes to
the
Excise Tax Act (3) - - - - (25) (25) -
------------------------------ --------------- ----------- --------- ------ ----- ----- -------
Non-interest expenses -
Adjusted 613 375 272 100 32 1,392 1,305
------------------------------ --------------- ----------- --------- ------ ----- ----- -------
Income before provisions for
credit
losses and income taxes -
Adjusted 527 254 288 192 (77) 1,184 1,179
Provisions for credit losses 75 1 5 29 1 111 57
------------------------------ --------------- ----------- --------- ------ ----- ----- -------
Income before income taxes -
Adjusted 452 253 283 163 (78) 1,073 1,122
------------------------------ --------------- ----------- --------- ------ ----- ----- -------
Income taxes 124 70 (72) 35 (9) 148 225
Taxable equivalent - - 150 - 2 152 71
Income taxes on the gain on
the
fair value remeasurement
of an equity interest(2) - - - - (24) (24) -
Income taxes on the expense
related
to changes to the Excise Tax
Act
(3) - - - - 7 7 -
Income taxes - Adjusted 124 70 78 35 (24) 283 296
------------------------------ --------------- ----------- --------- ------ ----- ----- -------
Net income - Adjusted 328 183 205 128 (54) 790 826
Specified items after income
taxes - - - - 49 49 -
------------------------------ --------------- ----------- --------- ------ ----- ----- -------
Net income 328 183 205 128 (5) 839 826
Non-controlling interests - - - - (1) (1) -
------------------------------ --------------- ----------- --------- ------ ----- ----- -------
Net income attributable to the
Bank ' s shareholders
and holders of other equity
instruments 328 183 205 128 (4) 840 826
------------------------------ --------------- ----------- --------- ------ ----- ----- -------
Net income attributable to the
Bank ' s shareholders
and holders of other equity
instruments
- Adjusted 328 183 205 128 (53) 791 826
------------------------------ --------------- ----------- --------- ------ ----- ----- -------
Dividends on preferred shares
and
distributions on
limited recourse capital
notes 36 26
------------------------------ --------------- ----------- --------- ------ ----- ----- -------
Net income attributable to
common
shareholders - Adjusted 755 800
------------------------------ --------------- ----------- --------- ------ ----- ----- -------
(1) For the quarter ended July 31, 2022, certain amounts have
been adjusted to reflect a change in accounting policy related to
cloud computing arrangements. For additional information, see Note
1 to the audited annual consolidated financial statements for the
year ended October 31, 2022.
(2) During the quarter ended July 31, 2023, the Bank concluded
that it had lost significant influence over TMX Group Limited (TMX)
and therefore ceased using the equity method to account for this
investment. The Bank designated its investment in TMX as a
financial asset measured at fair value through other comprehensive
income in an amount of $191 million. Upon the fair value
measurement, a gain of $91 million ($67 million net of income
taxes) was recorded in the Other heading of segment results.
(3) During the quarter ended July 31, 2023, the Bank recorded a
$25 million expense in the Other heading of segment results ($18
million net of income taxes) related to retroactive impact of the
changes to the Excise Tax Act, indicating that payment card
clearing services rendered by a payment card network operator are
subject to the goods and services tax (GST) and the harmonized
sales tax (HST).
Nine months ended July
(millions of Canadian dollars) 31
------------------------------ --------------- ----------- --------- -----------------------------
2023 2022(1)
------------------------------ --------------- ----------- --------- ------ ----- ----- -------
Personal Wealth Financial
and Commercial Management Markets USSF&I Other Total Total
----------------------------- --------------- ----------- --------- ------ ----- ----- -------
Net interest income 2,464 590 (851) 841 (193) 2,851 4,064
Taxable equivalent - - 237 - 5 242 169
Net interest income - Adjusted 2,464 590 (614) 841 (188) 3,093 4,233
------------------------------ --------------- ----------- --------- ------ ----- ----- -------
Non-interest income 900 1,293 2,363 55 114 4,725 3,254
Taxable equivalent - - 172 - - 172 18
Gain on the fair value
remeasurement
of an equity interest(2) - - - - (91) (91) -
Non-interest income - Adjusted 900 1,293 2,535 55 23 4,806 3,272
------------------------------ --------------- ----------- --------- ------ ----- ----- -------
Total revenues - Adjusted 3,364 1,883 1,921 896 (165) 7,899 7,505
------------------------------ --------------- ----------- --------- ------ ----- ----- -------
Non-interest expenses 1,820 1,111 842 296 125 4,194 3,884
Expense related to changes to
the
Excise Tax Act (3) - - - - (25) (25) -
Non-interest expenses -
Adjusted 1,820 1,111 842 296 100 4,169 3,884
------------------------------ --------------- ----------- --------- ------ ----- ----- -------
Income before provisions for
credit
losses and income taxes -
Adjusted 1,544 772 1,079 600 (265) 3,730 3,621
Provisions for credit losses 173 1 15 90 3 282 58
------------------------------ --------------- ----------- --------- ------ ----- ----- -------
Income before income taxes -
Adjusted 1,371 771 1,064 510 (268) 3,448 3,563
------------------------------ --------------- ----------- --------- ------ ----- ----- -------
Income taxes 377 212 (116) 107 (47) 533 731
Taxable equivalent - - 409 - 5 414 187
Income taxes on the gain on
the
fair value remeasurement
of an equity interest(2) - - - - (24) (24) -
Income taxes on the expense
related
to changes to the Excise Tax
Act
(3) - - - - 7 7 -
Income taxes related to the
Canadian
government's 2022
tax measures(4) - - - - (24) (24) -
Income taxes - Adjusted 377 212 293 107 (83) 906 918
------------------------------ --------------- ----------- --------- ------ ----- ----- -------
Net income - Adjusted 994 559 771 403 (185) 2,542 2,645
Specified items after income
taxes - - - - 25 25 -
------------------------------ --------------- ----------- --------- ------ ----- ----- -------
Net income 994 559 771 403 (160) 2,567 2,645
Non-controlling interests - - - - (2) (2) (1)
------------------------------ --------------- ----------- --------- ------ ----- ----- -------
Net income attributable to the
Bank ' s shareholders
and holders of other equity
instruments 994 559 771 403 (158) 2,569 2,646
------------------------------ --------------- ----------- --------- ------ ----- ----- -------
Net income attributable to the
Bank's shareholders
and holders of other equity
instruments
- Adjusted 994 559 771 403 (183) 2,544 2,646
------------------------------ --------------- ----------- --------- ------ ----- ----- -------
Dividends on preferred shares
and
distributions
on limited recourse capital
notes 106 77
------------------------------ --------------- ----------- --------- ------ ----- ----- -------
Net income attributable to
common
shareholders - Adjusted 2,438 2,569
------------------------------ --------------- ----------- --------- ------ ----- ----- -------
(1) For the nine-month period ended July 31, 2022, certain
amounts have been adjusted to reflect a change in accounting policy
related to cloud computing arrangements. For additional
information, see Note 1 to the audited annual consolidated
financial statements for the year ended October 31, 2022.
(2) During the nine-month period ended July 31, 2023, the Bank
concluded that it had lost significant influence over TMX and
therefore ceased using the equity method to account for this
investment. The Bank designated its investment in TMX as a
financial asset measured at fair value through other comprehensive
income in an amount of $191 million. Upon the fair value
measurement, a gain of $91 million ($67 million net of income
taxes) was recorded in the Other heading of segment results.
(3) During the nine-month period ended July 31, 2023, the Bank
recorded a $25 million expense in the Other heading of segment
results ($18 million net of income taxes) related to the
retroactive impact of the changes to the Excise Tax Act, indicating
that payment card clearing services rendered by a payment card
network operator are subject to the goods and services tax (GST)
and the harmonized sales tax (HST).
(4) During the nine-month period ended July 31, 2023, the Bank
recorded a $32 million tax expense in the Other heading of segment
results with respect to the Canada Recovery Dividend, i.e., a
one-time, 15% tax on the fiscal 2021 and 2020 average taxable
income above $1 billion, as well as an $8 million tax recovery
related to the 1.5% increase in the statutory tax rate, which
includes the impact related to current and deferred taxes for
fiscal 2022. For additional information on these tax measures, see
the Income Taxes section on page 24 in the Report to Shareholders -
Third Quarter 2023 , which is available on the Bank's website at
nbc.ca or the SEDAR website at sedar.com.
Presentation of Basic and Diluted Earnings Per Share -
Adjusted
Quarter ended Nine months ended
(Canadian dollars) July 31 July 31
---------------------------------------------------- -------------------- -------------------
2023 2022(1) 2023 2022(1)
---------------------------------------------------- ------ ------- -------- --------
Basic earnings per share $ 2.38 $ 2.38 $ 7.30 $ 7.61
Gain on the fair value remeasurement of an
equity interest(2) (0.20) - (0.20) -
Expense related to changes to the Excise
Tax Act (3) 0.05 - 0.05 -
Income taxes related to the Canadian government's
2022 tax measures(4) - - 0.07 -
---------------------------------------------------- ------ ------- -------- --------
Basic earnings per share - Adjusted $ 2.23 $ 2.38 $ 7.22 $ 7.61
---------------------------------------------------- ------ ------- -------- --------
Diluted earnings per share $ 2.36 $ 2.35 $ 7.23 $ 7.53
Gain on the fair value remeasurement of an
equity interest(2) (0.20) - (0.20) -
Expense related to changes to the Excise
Tax Act (3) 0.05 - 0.05 -
Income taxes related to the Canadian government's
2022 tax measures(4) - - 0.07 -
Diluted earnings per share - Adjusted $ 2.21 $ 2.35 $ 7.15 $ 7.53
---------------------------------------------------- ------ ------- -------- --------
(1) For the quarter and nine-month period ended July 31, 2022,
certain amounts have been adjusted to reflect a change in
accounting policy related to cloud computing arrangements. For
additional information, see Note 1 to the audited annual
consolidated financial statements for the year ended October 31,
2022.
(2) During the quarter and nine-month period ended July 31,
2023, the Bank concluded that it had lost significant influence
over TMX and therefore ceased using the equity method to account
for this investment. The Bank designated its investment in TMX as a
financial asset measured at fair value through other comprehensive
income in an amount of $191 million. Upon the fair value
measurement, a gain of $91 million ($67 million net of income
taxes) was recorded in the Other heading of segment results.
(3) During the quarter and nine-month period ended July 31,
2023, the Bank recorded a $25 million expense in the Other heading
of segment results ($18 million net of income taxes) related to the
retroactive impact of the changes to the Excise Tax Act, indicating
that payment card clearing services rendered by a payment card
network operator are subject to the goods and services tax (GST)
and the harmonized sales tax (HST).
(4) During the nine-month period ended July 31, 2023, the Bank
recorded a $32 million tax expense in the Other heading of segment
results with respect to the Canada Recovery Dividend, i.e., a
one-time, 15% tax on the fiscal 2021 and 2020 average taxable
income above $1 billion, as well as an $8 million tax recovery
related to the 1.5% increase in the statutory tax rate, which
includes the impact related to current and deferred taxes for
fiscal 2022. For additional information on these tax measures, see
the Income Taxes section on page 24 in the Report to Shareholders -
Third Quarter 2023 , which is available on the Bank's website at
nbc.ca or the SEDAR website at sedar.com.
Highlights
(millions of Canadian
dollars,
except per share Nine months ended July
amounts) Quarter ended July 31 31
------------------------ -------------------------------- ------- ---------------------------------------------
2023 2022(1) % Change 2023 2022(1) % Change
----------------------- ------- ------- -------- ------- ------- --------- ------- --------
Operating results
Total revenues 2,515 2,413 4 7,576 7,318 4
Income before
provisions for
credit losses and
income taxes 1,098 1,108 (1) 3,382 3,434 (2)
Net income 839 826 2 2,567 2,645 (3)
Return on common
shareholders'
equity(2) 16.2% 17.9% 17.2 % 20.1%
Earnings per share
Basic $ 2.38 $ 2.38 - $ 7.30 $ 7.61 (4)
Diluted $ 2.36 $ 2.35 - $ 7.23 $ 7.53 (4)
----------------------- ------- ------- -------- ------- ------- --------- ------- --------
Operating results -
Adjusted
(3)
Total revenues -
Adjusted(3) 2,576 2,484 4 7,899 7,505 5
Income before
provisions for
credit losses
and income taxes -
Adjusted(3) 1,184 1,179 - 3,730 3,621 3
Net income -
Adjusted(3) 790 826 (4) 2,542 2,645 (4)
Return on common
shareholders'
equity - Adjusted(4) 15.3% 17.9% 17.0 % 20.1%
Operating leverage -
Adjusted(4) (3.0)% 1.4% (2.1) % 2.4%
Efficiency ratio -
Adjusted(4) 54.0% 52.5% 52.8 % 51.8%
Earnings per share -
Adjusted
(3)
Basic $ 2.23 $ 2.38 (6) $ 7.22 $ 7.61 (5)
Diluted $ 2.21 $ 2.35 (6) $ 7.15 $ 7.53 (5)
----------------------- ------- ------- -------- ------- ------- --------- ------- --------
Common share
information
Dividends declared $ 1.02 $ 0.92 11 $ 2.96 $ 2.66 11
Book value(2) $ 58.75 $ 54.29 $ 58.75 $ 54.29
Share price
High $ 103.28 $ 97.87 $ 103.45 $ 105.44
Low $ 94.62 $ 83.33 $ 91.02 $ 83.33
Close $ 103.28 $ 89.85 $ 103.28 $ 89.85
Number of common shares
(thousands) 338,228 336,456 338,228 336,456
Market capitalization 34,932 30,231 34,932 30,231
----------------------- ------- ------- -------- ------- ------- --------- ------- --------
As at As at
July October
31, 31,
(millions of Canadian dollars) 2023 2022 % Change
Balance sheet and off-balance-sheet
Total assets 426,015 403,740 6
Loans and acceptances, net of allowances 219,433 206,744 6
Deposits 282,323 266,394 6
Equity attributable to common shareholders 19,872 18,594 7
Assets under administration(2) 678,753 616,165 10
Assets under management(2) 125,603 112,346 12
---------------------------------------------------- -------- ------- ------- --------- ----------- --------
Regulatory ratios under Basel III (5)
Capital ratios
Common Equity Tier 1 (CET1) 13.5 % 12.7 %
Tier 1 16.1 % 15.4 %
Total 16.9 % 16.9 %
Leverage ratio 4.2 % 4.5 %
---------------------------------------------------- -------- ------- ------- --------- ----------- --------
TLAC ratio(5) 29.9 % 27.7 %
TLAC leverage ratio(5) 7.9 % 8.1 %
---------------------------------------------------- -------- ------- ------- --------- ----------- --------
Liquidity coverage ratio (LCR)(5) 146 % 140 %
Net stable funding ratio (NSFR)(5) 118 % 117 %
---------------------------------------------------- -------- ------- ------- --------- ----------- --------
Other information
Number of employees - Worldwide (full-time
equivalent) 28,901 27,103 7
Number of branches in Canada 372 378 (2)
Number of banking machines in Canada 940 939 -
---------------------------------------------------- -------- ------- ------- --------- ----------- --------
(1) For the quarter and nine-month period ended July 31, 2022,
certain amounts have been adjusted to reflect a change in
accounting policy related to cloud computing arrangements. For
additional information, see Note 1 to the audited annual
consolidated financial statements for the year ended October 31,
2022.
(2) For details on the composition of these measures, see the
Glossary section on pages 51 to 54 in the Report to Shareholders -
Third Quarter 2023, which is available on the Bank's website at
nbc.ca or the SEDAR website at sedar.com .
(3) See the Financial Reporting Method section on pages 3 to 6
for additional information on non-GAAP financial measures.
(4) For additional information on non-GAAP ratios, see the
Financial Reporting Method section on pages 4 to 10 in the Report
to Shareholders - Third Quarter 2023, which is available on the
Bank's website at nbc.ca or the SEDAR website at sedar.com .
(5) For additional information on capital management measures,
see the Financial Reporting Method section on pages 4 to 10 in the
Report to Shareholders - Third Quarter 2023 , which is available on
the Bank's website at nbc.ca or the SEDAR website at sedar.com
.
Caution Regarding Forward-Looking Statements
Certain statements in this document are forward-looking
statements. All such statements are made in accordance with
applicable securities legislation in Canada and the United States.
Forward-looking statements in this document may include, but are
not limited to, statements with respect to the economy-particularly
the Canadian and U.S. economies-market changes, the Bank's
objectives, outlook and priorities for fiscal year 2023 and beyond,
the strategies or actions that will be taken to achieve them,
expectations for the Bank's financial condition, the regulatory
environment in which it operates, the impacts of-and the Bank's
response to-the COVID-19 pandemic, and certain risks it faces.
These forward-looking statements are typically identified by verbs
or words such as "outlook", "believe", "foresee", "forecast",
"anticipate", "estimate", "project", "expect", "intend" and "plan",
in their future or conditional forms, notably verbs such as "will",
"may", "should", "could" or "would" as well as similar terms and
expressions. Such forward-looking statements are made for the
purpose of assisting the holders of the Bank's securities in
understanding the Bank's financial position and results of
operations as at and for the periods ended on the dates presented,
as well as the Bank's vision, strategic objectives, and financial
performance targets, and may not be appropriate for other purposes.
These forward-looking statements are based on current expectations,
estimates, assumptions and intentions and are subject to
uncertainty and inherent risks, many of which are beyond the Bank's
control.
Assumptions about the performance of the Canadian and U.S.
economies in 2023 and how that performance will affect the Bank's
business are among the main factors considered in setting the
Bank's strategic priorities and objectives, including provisions
for credit losses. In determining its expectations for economic
conditions, both broadly and in the financial services sector in
particular, the Bank primarily considers historical economic data
provided by the governments of Canada, the United States and
certain other countries in which the Bank conducts business, as
well as their agencies.
Statements about the economy, market changes, and the Bank's
objectives, outlook and priorities for fiscal 2023 and thereafter
are based on a number of assumptions and are subject to risk
factors, many of which are beyond the Bank's control and the
impacts of which are difficult to predict. These risk factors
include, among others, the general economic environment and
financial market conditions in Canada, the United States, and other
countries where the Bank operates; the impact of upheavals in the
U.S. banking industry; exchange rate and interest rate
fluctuations; inflation; disruptions in global supply chains;
higher funding costs and greater market volatility; changes made to
fiscal, monetary, and other public policies; changes made to
regulations that affect the Bank's business; geopolitical and
sociopolitical uncertainty; the transition to a low-carbon economy
and the Bank's ability to satisfy stakeholder expectations on
environmental and social issues; significant changes in consumer
behaviour; the housing situation, real estate market, and household
indebtedness in Canada; the Bank's ability to achieve its long-term
strategies and key short-term priorities; the timely development
and launch of new products and services; the Bank's ability to
recruit and retain key personnel; technological innovation and
heightened competition from established companies and from
competitors offering non-traditional services; changes in the
performance and creditworthiness of the Bank's clients and
counterparties; the Bank's exposure to significant regulatory
matters or litigation; changes made to the accounting policies used
by the Bank to report financial information, including the
uncertainty inherent to assumptions and critical accounting
estimates; changes to tax legislation in the countries where the
Bank operates, i.e., primarily Canada and the United States;
changes made to capital and liquidity guidelines as well as to the
presentation and interpretation thereof; changes to the credit
ratings assigned to the Bank; potential disruptions to key
suppliers of goods and services to the Bank; potential disruptions
to the Bank's information technology systems, including evolving
cyberattack risk as well as identity theft and theft of personal
information; the risk of fraudulent activity; and possible impacts
of major events affecting the local and global economies, including
international conflicts, natural disasters, and public health
crises such as the COVID-19 pandemic, the evolution of which is
difficult to predict and could continue to have repercussions on
the Bank.
There is a strong possibility that the Bank's express or implied
predictions, forecasts, projections, expectations or conclusions
will not prove to be accurate, that its assumptions may not be
confirmed and that its vision, strategic objectives and financial
performance targets will not be achieved. The Bank recommends that
readers not place undue reliance on forward-looking statements, as
a number of factors could cause actual results to differ
significantly from the expectations, estimates or intentions
expressed in these forward-looking statements. These risk factors
include credit risk, market risk, liquidity and funding risk,
operational risk, regulatory compliance risk, reputation risk,
strategic risk, environmental and social risk, and certain emerging
risks or risks deemed significant, all of which are described in
greater detail in the Risk Management section beginning on page 65
of the 2022 Annual Report.
The foregoing list of risk factors is not exhaustive. Additional
information about these risk factors is provided in the Risk
Management section of the 2022 Annual Report and the Risk
Management section of the Report to Shareholders for the Third
Quarter of 2023. Investors and others who rely on the Bank's
forward-looking statements should carefully consider the above
factors as well as the uncertainties they represent and the risk
they entail. Except as required by law, the Bank does not undertake
to update any forward-looking statements, whether written or oral,
that may be made from time to time, by it or on its behalf. The
Bank cautions investors that these forward-looking statements are
not guarantees of future performance and that actual events or
results may differ significantly from these statements due to a
number of factors.
Disclosure of the Third Quarter 2023 results
Conference Call
- A conference call for analysts and institutional investors
will be held on Wednesday, August 30, 2023 at 1:00 p.m. EST.
- Access by telephone in listen-only mode: 1-800-806-5484 or
416-340-2217. The access code is 8890472#.
- A recording of the conference call can be heard until November
30, 2023 by dialing 1-800-408-3053 or 905-694-9451. The access code
is 4566460# .
Webcast
- The conference call will be webcast live at nbc.ca/investorrelations .
- A recording of the webcast will also be available on National
Bank's website after the call.
Financial Documents
- The Report to Shareholders (which includes the quarterly
consolidated financial statements) is available at all times on
National Bank's website at nbc.ca/investorrelations .
- The Report to Shareholders, the Supplementary Financial
Information, the Supplementary Regulatory Capital and Pillar 3
Disclosure, and a slide presentation will be available on the
Investor Relations page of National Bank's website on the morning
of the day of the conference call.
For more information
- Marianne Ratté, Vice-President - Investor Relations, 1-866-517-5455
- Debby Cordeiro, Senior Vice-President - Communication and
Corporate Social Responsibility, 514-412-0538
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
QRTURSAROAUWOAR
(END) Dow Jones Newswires
August 30, 2023 08:04 ET (12:04 GMT)
Nat Bk Canada25 (LSE:32SS)
Gráfico Histórico do Ativo
De Jan 2025 até Fev 2025
Nat Bk Canada25 (LSE:32SS)
Gráfico Histórico do Ativo
De Fev 2024 até Fev 2025
