The National Bank's main office is pictured in Montreal on Friday, April 21, 2017. (Photo: THE CANADIAN PRESS/Ryan Remiorz)
The National Bank of Canada posted a second-quarter profit of $896 million, as strong trading activity helped the bank surpass analyst expectations.
This performance was largely driven by a 62% jump in its financial markets division. The surge came after unexpected tariffs announced by U.S. President Donald Trump in early April led to heavy trading and market volatility. The resulting flurry of activity created ideal conditions for the bank’s traders.
“These were some of the most profitable days we’ve ever had,” said Étienne Dubuc, head of financial markets at National Bank, during the earnings call on Wednesday.
The bank’s adjusted earnings reached $2.85 per diluted share, an increase from $2.54 per share during the same period last year. This result beat analysts’ forecast of $2.40 per share, according to LSEG Data & Analytics.
While other major Canadian banks didn’t enjoy the same trading lift, Dubuc pointed out that National Bank was in a strong position heading into the market shifts. Its defensive trading strategy and well-placed volatility positions gave it an edge when the tariffs triggered financial market turbulence.
In addition to trading gains, the bank’s overall revenue also grew significantly, reaching $3.65 billion in the second quarter. This compares to $2.75 billion during the same period in 2023. Some of this growth came from the bank’s recent acquisition of Canadian Western Bank.
However, the bank’s unadjusted profit of $896 million was slightly lower than last year’s $906 million. Still, the bank views the integration of Canadian Western as a long-term opportunity and remains focused on managing economic uncertainty.
CEO Laurent Ferreira expressed cautious optimism about the global economic landscape, citing signs of progress in trade talks and a more manageable tariff burden for Canada than initially feared. He also praised the resilience of Canadian consumers and businesses, noting their quick adaptation to USMCA trade agreement rules.
Despite the positive momentum, the bank took a conservative step by increasing its credit loss provisions to $545 million—up sharply from $138 million last year. This reflects a precautionary approach in case the economic environment worsens.
To reward shareholders, National Bank announced it will raise its dividend by four cents, bringing it to $1.18 per share starting in the third quarter.
