National Bank’s 2024 financial year begins with financial performance above expectations, pushing the stock to a historic high on the stock market.
The stock of Quebec’s largest banking institution rose 2% on Wednesday to end the session at $106.07 on the Toronto Stock Exchange.
Adjusted earnings per share were $2.59 for the three months ended January, beating experts’ forecasts of $2.36 per share by 10%.
Net profits generated by the organization increased by 5% to 922 million in the first quarter.
Management explains the increase in profits in particular by the growth in total income from all operating sectors.
Analyst Darko Mihelic at RBC is particularly impressed by the record profit of 308 million generated by the financial markets sector, up 3% year-on-year and 7% compared to the previous quarter. He anticipated 269 million.
The National Bank’s provisions for credit losses – that is to say the funds set aside to cover loans likely to not be repaid – amount to 120 million, which turns out to be relatively in line with the consensus analysts which was around 122 million.
Despite the performance revealed, CEO Laurent Ferreira adopted a cautious tone in the conference call.
PHOTO ROBERT SKINNER, LA PRESSE ARCHIVES
Laurent Ferreira
As expected, 2024 promises to be difficult for consumers and businesses. Interest rates remain high and inflationary pressures are still present. The imbalance in housing supply is putting pressure on inventory across the country while we continue to see signs of slowdown in the labor market.
Laurent Ferreira, CEO of the National Bank
“Going forward, economic growth may prove difficult, which could result in lower inflation and lower interest rates. In this context, we enter the second quarter with prudent reserves and high capital ratios. This allows us to support the bank’s growth and return capital to shareholders through sustainable dividend increases. »
In the opinion of analyst Meny Grauman of Scotiabank, the results presented by the National Bank are the best so far this week among the major Canadian banks.
CIBC and TD will in turn publish their start-of-year results on Thursday to complete the round of presentations from the major Canadian banks.
10 more floors for employees
The construction of the 40-story tower housing the bank’s new head office, on rue Saint-Jacques in Old Montreal, is already no longer sufficient to meet the future needs of the organization.
Laurent Ferreira explains that the recent purchase of the first ten floors of the tower next to its new head office, rue Saint-Jacques, increases the office space that its employees will be able to occupy by around 30%.
“The bank is growing,” said Laurent Ferreira in an interview. “You have to plan over a period of 10 to 15 years and we realized that one day we were going to need more space. By planning for the longer term, it became preferable to take possession of this building instead of subletting elsewhere in five years, for example. »
Built at a cost of approximately half a billion in recent years, the new 40-story head office can accommodate 7,500 employees while the bank has approximately 12,000 employees in Montreal, excluding those in branches.
If Laurent Ferreira maintains that the plans are not yet finalized, he anticipates that a portion of the 10 floors acquired in the building next to the new head office will be occupied by investment advisors and certain “operations teams”.
The National Bank thus purchased the commercial portion of the mixed project from real estate developer Broccolini and expects to be able to occupy the first 10 floors of this 58-story tower in 2026. Residential units are planned on the floors above those purchased by the bank.
Laurent Ferreira ensures that the bank’s teleworking policy does not change. “Our approach remains to be flexible. Teams are asked to organize and work together to identify the best ways to have a hybrid form of work. »
reference: www.lapresse.ca