National Bank of Canada (TSX:NA) shares surged in Toronto after the bank posted a significant increase in its third-quarter profit.
The bank’s quarterly performance was driven by strength in its wealth management and financial markets.
For the quarter ending July 31, the bank's net income amounted to $2.89 per diluted share, up from $2.33 per diluted share a year ago, with earnings of $1.03 billion, a notable rise from $830 million in the same period last year.
Revenue for the quarter reached $3 billion, compared to $2.49 billion in the previous year.
On an adjusted basis, National Bank's earnings were $2.68 per diluted share, up from $2.18 per share a year earlier.
The bank's provision for credit losses, which represents the funds set aside to cover potential bad loans, increased to $149 million from $111 million in the previous year. Despite this rise, the bank's strong revenue growth and efficient management contributed to its overall profitability.
A key factor in National Bank's improved results has been the recent cuts in interest rates by the Canadian central bank. The reductions in June and July have stimulated trading and wealth management activities, benefiting the financial sector, including National Bank.