The financial information in this press release is based on the
unaudited interim consolidated financial statements for the third
quarter ended July 31, 2013. Additional information about National Bank
of Canada, including the Annual Information Form, can be obtained from
the SEDAR website at sedar.com or on Bank's website at nbc.ca.
Highlights:
-
$419 million in net income for the third quarter of 2013, up 11 %
from $379 million in the same quarter of 2012;
-
Diluted earnings per share of $2.39 for the third quarter of 2013, up
12 % from $2.14 in the same quarter of 2012;
-
Return on equity of 21.9 %;
-
Common Equity Tier 1 (CET1) capital ratio under Basel III was 8.6 % as
at July 31, 2013 versus a pro forma CET1 ratio under Basel III of 7.3 %
as at October 31, 2012.
Highlights Excluding Specified Items(1):
-
Record net income of $391 million in the third quarter of 2013, up 11 %
from $353 million in the same quarter of 2012;
-
Record diluted earnings per share of $2.22 in the third quarter of 2013,
up 12 % from $1.98 in the same quarter of 2012;
-
Return on equity of 20.3 %.
MONTREAL, Aug. 28, 2013 /CNW Telbec/ - National Bank reported $419
million in net income for the third quarter of 2013 versus $379 million
in the third quarter of 2012. Diluted earnings per share for the
quarter ended July 31, 2013 stood at $2.39 compared to $2.14 in the
same quarter of 2012.
Excluding the specified items described on page 5, the third quarter net
income was a record amount of $391 million, up 11 % from $353 million
in the third quarter of 2012, and the quarter's diluted earnings per
share stood at $2.22, up 12 % from $1.98 in the same quarter of 2012.
For the first nine months of fiscal 2013, the Bank's net income
totalled $1,217 million versus $1,283 million in the same period of
2012. Nine-month diluted earnings per share stood at $6.91 compared
to $7.35 in the same nine-month period of 2012. Excluding the specified
items described on page 5, nine-month net income totalled $1,121
million, up 6 % from $1,053 million in the same period of 2012, and
nine-month diluted earnings per share stood at $6.32, up 7 % from $5.93
in the same period of 2012.
"Thanks to sustained growth across its three business segments, National
Bank reported record net income in the third quarter of 2013. Our
credit quality and financial strength remain excellent, and our
Pan-Canadian growth strategy has paid off with strong performance in
the Wealth Management and Financial Markets segments. Furthermore, the
Bank continues to seek out opportunities, as was the case for the
acquisition of TD Waterhouse Institutional Services announced on
August 1, 2013," said Louis Vachon, President and Chief Executive
Officer of the Bank.
Financial Indicators
|
|
Results
Q3 2013
|
|
Results
excluding
specified
items
|
(1) |
Results
First nine
months 2013
|
|
Results
excluding
specified
items
|
(1) |
|
|
|
|
|
|
|
|
|
|
|
Growth in diluted earnings per share
|
12
|
%
|
12
|
%
|
(6)
|
%
|
7
|
%
|
|
Return on common shareholders' equity
|
21.9
|
%
|
20.3
|
%
|
22.1
|
%
|
20.2
|
%
|
|
Dividend payout ratio
|
37
|
%
|
40
|
%
|
37
|
%
|
40
|
%
|
|
CET1 capital ratio under Basel III
|
8.6
|
%
|
|
|
8.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) See the Financial Reporting Method section on page 5.
|
Results by Segment
The Bank's segment reporting is consistent with that adopted for the
fiscal year beginning November 1, 2012, with the following changes
having been made to better reflect how management monitors performance.
The distribution of banking products through independent networks has
been reclassified from the Personal and Commercial segment to the
Wealth Management segment. Banking activities with energy sector
companies have been transferred from the Financial Markets segment to
the Personal and Commercial segment. These changes had no impact on the
Bank's consolidated results.
Personal and Commercial
In the Personal and Commercial segment, net income totalled $192 million
in the third quarter of 2013, up 2 % from $189 million in the third
quarter of 2012. Third-quarter total revenues increased by $18 million
year over year owing to higher net interest income, which rose $8
million, and to a $10 million increase in non-interest income. The
higher net interest income came mainly from growth in personal loan
volume, tempered by a narrowing of the net interest margin, which was
2.26 % in the third quarter of 2013 compared to 2.39 % in the same
quarter of 2012, mainly due to a decline in loan spreads.
Personal Banking's total revenues rose $12 million, mainly due to higher
loan volumes, especially consumer and mortgage loans, partly offset by
a narrowing of net interest margins. Commercial Banking's total
revenues rose $6 million, owing mainly to higher credit fees,
particularly on acceptances.
The segment's third-quarter non-interest expenses increased by $5
million or 1 % year over year. At 54 %, the efficiency ratio for the
third quarter of 2013 improved by 1 % when compared to the same quarter
last year. Provisions for credit losses were up $10 million, as
recoveries of credit losses had been recorded in the same quarter of
2012.
For the first nine months of 2013, the Personal and Commercial segment
posted net income of $536 million, up $15 million or 3 % from $521
million in the same period of 2012. The segment's total revenues grew
2 %. Personal Banking's total revenues rose mainly on higher consumer
and mortgage loan volumes, and the 2 % increase in Commercial Banking's
total revenues came mainly from financing activity revenues. The
segment's nine-month provisions for credit losses were $13 million
higher than in the same period of 2012. At 55 %, the efficiency ratio
for the first nine months of fiscal 2013 improved by 1 % when compared
to the same period of 2012.
Wealth Management
In the Wealth Management segment, net income totalled $52 million in the
third quarter of 2013 versus $39 million in the same quarter last year.
The segment's total revenues grew 8 % and were mainly due to an
increase in deposit volume and the higher fee-based revenues resulting
from growth in assets under administration and under management.
Excluding specified items, all of which are related to the past two
years' acquisitions, third-quarter non-interest expenses stood at $209
million compared to $202 million in the same quarter of 2012, rising
mainly on increases in compensation and employee benefits and in
professional fees resulting from greater segment activity.
Excluding specified items, essentially the $246 million gain on the sale
of Natcan's operations recorded in the second quarter of 2012, the
Wealth Management segment posted net income of $172 million for the
first nine months of 2013 compared to $139 million in the same period
of 2012. This net income growth came mainly from greater retail
brokerage activity, higher sales of managed solutions and growth in net
interest income.
Financial Markets
In the Financial Markets segment, net income totalled $158 million for
the third quarter of 2013, up $47 million from $111 million in the same
quarter of 2012. On a taxable equivalent basis, the segment's
third-quarter total revenues amounted to $382 million compared to $322
million in the third quarter of 2012, mainly attributable to increases
in all types of trading activity revenues. Banking service revenues
rose 12 %, particularly on greater financing needs of clients. The
segment's other income was up $8 million, mainly due to sustained
growth in revenues from the Credigy Ltd. subsidiary.
At $168 million, the segment's third-quarter non-interest expenses saw a
slight $2 million year-over-year increase that was particularly due to
higher variable compensation associated with revenue growth. Provisions
for credit losses were nil this third quarter versus $3 million
recorded in the same quarter of 2012.
For the first nine months of 2013, the segment's net income
totalled $416 million, up $79 million from the same period in 2012.
Excluding specified items, the segment's net income rose $68 million or
20 % from the same period in 2012. On a taxable equivalent basis, total
nine-month revenues amounted to $1,048 million versus $981 million in
the same period last year, a year-over-year increase of $67 million
that was mainly due to higher trading activity revenues and higher
banking service revenues. Other income was down, mainly because of a
lower contribution from associate Maple Financial Group Inc., partly
offset by higher revenues from the Credigy Ltd. subsidiary. Nine-month
non-interest expenses stood at $494 million, down $23 million year over
year, as severance pay had been recorded in the second quarter of 2012.
As for provisions for credit losses, the segment recorded $12 million
in recoveries of credit losses in the first nine months of 2013,
whereas in the same period of 2012, the Bank had taken $3 million in
provisions for credit losses.
Other
For the Other heading of segment results, net income totalled $17 million in the
third quarter of 2013 compared to $40 million in the same quarter of
2012. Excluding specified items, there was a net loss of $17 million
this third quarter versus net income of $7 million in the third quarter
of 2012. The decrease in net income came mainly from a higher payroll
tax, costs incurred for process improvement and regulatory projects,
and marketing expenses for advertising campaigns.
For the first nine months of 2013, net income totalled $110 million
versus $106 million in the same period of 2012. Excluding specified
items, there was a net loss of $3 million for the first nine months of
2013 versus net income of $45 million in the same period of 2012. The
difference is attributable to the same reasons provided for the quarter
and to a lower contribution from Treasury.
Capital Management
The Bank's capital management policy sets out the principles and
practices that the Bank incorporates into its capital management
strategy and the basic criteria it adopts to ensure that it has
sufficient capital at all times and is prudently managing such capital
to satisfy any future capital requirements. The Bank has maintained
adequate capital ratios through internal capital generation, balance
sheet management and issuances and repurchases of shares and
subordinated debt securities.
In December 2012, OSFI released the final version of the Capital Adequacy Requirements (CAR) Guideline, which came into effect in January 2013. The guideline reflects the
changes to capital requirements adopted by the Basel Committee on Bank
Supervision (BCBS), which are commonly referred to as Basel III. These
changes, along with global liquidity standards, seek to strengthen the
resiliency of the banking sector and financial system.
The new Basel III regulatory framework sets out transitional
arrangements for the period of 2013 to 2019. OSFI has introduced two
methodologies for determining capital. The "all-in" methodology
includes all of the regulatory adjustments that will be required by
2019 while retaining the phase-out rules for non-qualifying capital
instruments. The "transitional" methodology, in addition to applying
the phase-out rules for non-qualifying capital instruments, also
applies a more flexible and steady phasing in of the required
regulatory adjustments. The Bank will disclose its capital ratios
calculated according to both methodologies in each quarter until the
start of 2019. Nevertheless, OSFI has been requiring Canadian banks to
meet the 2019 minimum "all-in" requirements since the first quarter of
2013 for Common Equity Tier 1 (CET1) and is requiring them to do the
same by the first quarter of 2014 for Tier 1 capital and total capital.
Furthermore, given delays in Basel III implementation in the United
States and European Union countries, OSFI has decided to postpone,
until January 1, 2014, application of the capital requirements for
Credit Valuation Adjustment (CVA) charge.
As such, since the first quarter of 2013, the Bank must now maintain a
CET1 capital ratio of at least 7.0 %, i.e., 4.5 % for common equity and
2.5 % for a capital conservation reserve. In March 2013, OSFI
designated Canada's six largest banks, which include National Bank, as
Domestic Systemically Important Banks (D-SIBs). For these banks, a 1 %
surcharge will apply to their capital ratios as of January 1, 2016.
Consequently, as of that date, the Bank and all other major Canadian
banks will have to maintain a CET1 capital ratio of at least 8.0 %, a
Tier 1 capital ratio of at least 9.5 % and a total capital ratio of at
least 11.5 %, all ratios determined using the "all-in" methodology.
In addition to regulatory capital ratios, OSFI also requires Canadian
banks to meet a maximum leverage test. Leverage or the
assets-to-capital multiple is calculated by dividing the Bank's total
assets, including certain off-balance-sheet items, by its regulatory
capital in accordance with the transitional provisions.
New Pillar III disclosure requirements have come into force in the third
quarter of 2013. Canadian financial institutions must use a disclosure
template for their "all-in" regulatory capital and must present a
reconciliation of all regulatory capital elements back to the balance sheet. These two requirements are presented in the document Supplementary Financial Information for the Third Quarter Ended July 31,
2013, which is available on the Bank's website at nbc.ca. Furthermore, a complete list of capital instruments and their main
features is now available on the Bank's website at nbc.ca under Investor Relations > Capital & Debt Information > Regulatory
Capital > Main Features of Regulatory Capital Instruments.
As at July 31, 2013, the Bank was in compliance with all of OSFI's
regulatory capital requirements. The CET1 capital ratio under
Basel III, determined using the "all-in" methodology, was 8.6 % as at
July 31, 2013 versus a pro forma CET1 capital ratio under Basel III of
7.3 % as at October 31, 2012. The higher CET1 capital ratio was
essentially due to net income, net of dividends, to the delay in
implementing the new CVA charge, which had been included as at
October 31, 2012, and to the common share issuance related primarily to
exercised stock options. The Tier 1 capital ratio and the total capital
ratio, determined using the Basel III "all-in" methodology, were 11.5 %
and 15.1 %, respectively, as at July 31, 2013 versus 10.1 % and 14.1 %,
respectively, for the pro forma Tier 1 capital ratio and the pro forma
total capital ratio as at October 31, 2012.
The risk-weighted assets (RWA), calculated under the Basel III rules,
decreased and amounted to $60.9 billion as at July 31, 2013 compared to
a pro forma Basel III RWA of $62.2 billion as at October 31, 2012. This
decrease was primarily attributable to the delay in implementing the
CVA. At 18.0 as at July 31, 2013, the assets-to-capital multiple
slightly decreased from 18.3 as at October 31, 2012.
|
HIGHLIGHTS
|
|
(millions of Canadian dollars)
|
|
|
|
Quarter ended
|
|
Nine months ended
|
|
|
|
|
July 31,
2013
|
|
|
July 31,
2012
|
|
% Change
|
|
|
July 31,
2013
|
|
|
July 31,
2012
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
$
|
1,288
|
|
$
|
1,221
|
|
5
|
|
$
|
3,909
|
|
$
|
3,963
|
|
(1)
|
|
Net income
|
|
419
|
|
|
379
|
|
11
|
|
|
1,217
|
|
|
1,283
|
|
(5)
|
|
Net income attributable to the Bank's shareholders
|
|
401
|
|
|
360
|
|
11
|
|
|
1,161
|
|
|
1,228
|
|
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on common shareholders' equity
|
|
21.9
|
%
|
|
21.7
|
%
|
|
|
|
22.1
|
%
|
|
26.2
|
%
|
|
|
Earnings per share (dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
2.41
|
|
$
|
2.16
|
|
12
|
|
$
|
6.96
|
|
$
|
7.41
|
|
(6)
|
|
|
Diluted
|
|
2.39
|
|
|
2.14
|
|
12
|
|
|
6.91
|
|
|
7.35
|
|
(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXCLUDING SPECIFIED ITEMS(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
$
|
1,294
|
|
$
|
1,217
|
|
6
|
|
$
|
3,770
|
|
$
|
3,675
|
|
3
|
|
Net income
|
|
391
|
|
|
353
|
|
11
|
|
|
1,121
|
|
|
1,053
|
|
6
|
|
Net income attributable to the Bank's shareholders
|
|
373
|
|
|
334
|
|
12
|
|
|
1,065
|
|
|
998
|
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on common shareholders' equity
|
|
20.3
|
%
|
|
20.2
|
%
|
|
|
|
20.2
|
%
|
|
21.2
|
%
|
|
|
Earnings per share (dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
2.23
|
|
$
|
2.00
|
|
12
|
|
$
|
6.37
|
|
$
|
5.99
|
|
6
|
|
|
Diluted
|
|
2.22
|
|
|
1.98
|
|
12
|
|
|
6.32
|
|
|
5.93
|
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per common share (dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared
|
$
|
0.87
|
|
$
|
0.79
|
|
|
|
$
|
2.53
|
|
$
|
2.29
|
|
|
|
Book value
|
|
|
|
|
|
|
|
|
|
45.07
|
|
|
39.60
|
|
|
|
Stock trading range
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High
|
|
79.35
|
|
|
77.39
|
|
|
|
|
80.04
|
|
|
81.27
|
|
|
|
|
Low
|
|
72.66
|
|
|
71.05
|
|
|
|
|
72.35
|
|
|
63.27
|
|
|
|
|
Close
|
|
79.01
|
|
|
74.68
|
|
|
|
|
79.01
|
|
|
74.68
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As at July 31,
2013
|
|
|
As at October 31,
2012
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial position
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
|
|
|
|
|
|
$
|
187,179
|
|
$
|
177,903
|
|
5
|
|
Loans and acceptances
|
|
|
|
|
|
|
|
|
|
96,957
|
|
|
90,922
|
|
7
|
|
Deposits
|
|
|
|
|
|
|
|
|
|
100,165
|
|
|
93,249
|
|
7
|
|
Subordinated debt and equity
|
|
|
|
|
|
|
|
|
|
11,515
|
|
|
10,710
|
|
8
|
|
Capital ratios under Basel III (2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Equity Tier 1 (CET1)
|
|
|
|
|
|
|
|
|
|
8.6
|
%
|
|
7.3
|
%
|
|
|
|
Tier 1
|
|
|
|
|
|
|
|
|
|
11.5
|
%
|
|
10.1
|
%
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
15.1
|
%
|
|
14.1
|
%
|
|
|
Capital ratios under Basel I
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tier 1
|
|
|
|
|
|
|
|
|
|
11.6
|
%
|
|
11.0
|
%
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
15.1
|
%
|
|
14.6
|
%
|
|
|
Impaired loans, net of individual and collective allowances
|
|
|
|
|
|
|
|
|
|
(194)
|
|
|
(190)
|
|
|
|
|
As a % of loans and acceptances
|
|
|
|
|
|
|
|
|
|
(0.2)
|
%
|
|
(0.2)
|
%
|
|
|
Assets under administration and under management
|
|
|
|
|
|
|
|
|
|
247,077
|
|
|
232,027
|
|
|
|
Total personal savings
|
|
|
|
|
|
|
|
|
|
155,923
|
|
|
149,774
|
|
|
|
Interest coverage
|
|
|
|
|
|
|
|
|
|
11.69
|
|
|
12.23
|
|
|
|
Asset coverage
|
|
|
|
|
|
|
|
|
|
3.84
|
|
|
3.45
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of employees
|
|
|
|
|
|
|
|
|
|
19,817
|
|
|
19,920
|
|
(1)
|
|
Number of branches in Canada
|
|
|
|
|
|
|
|
|
|
453
|
|
|
451
|
|
−
|
|
Number of banking machines
|
|
|
|
|
|
|
|
|
|
934
|
|
|
923
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) See the Financial Reporting Method section on page 5.
|
|
(2) The ratios are calculated using the "all-in" methodology and the
October 31, 2012 ratios are presented on a pro forma basis.
|
FINANCIAL REPORTING METHOD
(millions of Canadian dollars, except per share amounts)
When assessing its results, the Bank uses certain measures that do not
comply with International Financial Reporting Standards (IFRS), as
issued by the International Accounting Standards Board (IASB) and set
out in the Canadian Institute of Chartered Accountants Handbook.
Securities regulators require companies to caution readers that net
income and other measures adjusted using non-IFRS criteria are not
standard under IFRS and cannot be easily compared with similar measures
used by other companies.
FINANCIAL INFORMATION
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Quarter ended
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Nine months ended
|
|
|
|
July 31,
2013
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|
July 31,
2012
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%
Change
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|
|
July 31,
2013
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|
|
July 31,
2012
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|
%
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excluding specified items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Personal and Commercial
|
|
192
|
|
|
189
|
|
2
|
|
|
536
|
|
|
521
|
|
3
|
|
|
Wealth Management
|
|
58
|
|
|
46
|
|
26
|
|
|
172
|
|
|
139
|
|
24
|
|
|
Financial Markets
|
|
158
|
|
|
111
|
|
42
|
|
|
416
|
|
|
348
|
|
20
|
|
|
Other
|
|
(17)
|
|
|
7
|
|
|
|
|
(3)
|
|
|
45
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income excluding specified items
|
|
391
|
|
|
353
|
|
11
|
|
|
1,121
|
|
|
1,053
|
|
6
|
|
|
Plus: Items related to holding restructured notes(1) |
|
(3)
|
|
|
4
|
|
|
|
|
106
|
|
|
32
|
|
|
|
|
Plus: Reversal of provisions for income tax contingencies(2) |
|
37
|
|
|
29
|
|
|
|
|
37
|
|
|
29
|
|
|
|
|
Less: Impairment of intangible assets(3) |
|
−
|
|
|
−
|
|
|
|
|
(29)
|
|
|
−
|
|
|
|
|
Less: Acquisition-related items(4) |
|
(4)
|
|
|
(6)
|
|
|
|
|
(14)
|
|
|
(17)
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|
|
|
|
Less: Items related to the Natcan transaction(5) |
|
(2)
|
|
|
(1)
|
|
|
|
|
(4)
|
|
|
197
|
|
|
|
|
Less: Severance pay(6) |
|
−
|
|
|
−
|
|
|
|
|
−
|
|
|
(11)
|
|
|
|
Net income
|
|
419
|
|
|
379
|
|
11
|
|
|
1,217
|
|
|
1,283
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|
(5)
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Diluted earnings per share excluding specified items
|
$
|
2.22
|
|
$
|
1.98
|
|
12
|
|
$
|
6.32
|
|
$
|
5.93
|
|
7
|
|
|
Plus: Items related to holding restructured notes(1) |
|
(0.02)
|
|
|
0.02
|
|
|
|
|
0.66
|
|
|
0.20
|
|
|
|
|
Plus: Reversal of provisions for income tax contingencies(2) |
|
0.23
|
|
|
0.18
|
|
|
|
|
0.23
|
|
|
0.18
|
|
|
|
|
Less: Impairment of intangible assets(3) |
|
−
|
|
|
−
|
|
|
|
|
(0.18)
|
|
|
−
|
|
|
|
|
Less: Acquisition-related items(4) |
|
(0.03)
|
|
|
(0.03)
|
|
|
|
|
(0.09)
|
|
|
(0.10)
|
|
|
|
|
Less: Items related to the Natcan transaction(5) |
|
(0.01)
|
|
|
(0.01)
|
|
|
|
|
(0.03)
|
|
|
1.21
|
|
|
|
|
Less: Severance pay(6) |
|
−
|
|
|
−
|
|
|
|
|
−
|
|
|
(0.07)
|
|
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|
Diluted earnings per share
|
$
|
2.39
|
|
$
|
2.14
|
|
12
|
|
$
|
6.91
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|
$
|
7.35
|
|
(6)
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Return on common shareholders' equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Including specified items
|
|
21.9
|
%
|
|
21.7
|
%
|
|
|
|
22.1
|
%
|
|
26.2
|
%
|
|
|
|
Excluding specified items
|
|
20.3
|
%
|
|
20.2
|
%
|
|
|
|
20.2
|
%
|
|
21.2
|
%
|
|
|
(1)
|
During the quarter ended July 31, 2013, $4 million in financing costs
($3 million net of income taxes) was recorded related to holding
restructured notes (2012: a $5 million gain ($4 million net of income
taxes) following capital repayments of restructured notes classified as
Available-for-sale securities). During the nine months ended July 31, 2013, the Bank recorded $145
million in revenues ($106 million net of income taxes) related to
holding restructured notes and arising mainly from an increase in fair
value (2012: $44 million, $32 million net of income taxes).
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|
(2)
|
During the quarter ended July 31, 2013, $37 million in income tax
provisions was reversed (2012: $29 million) following a revaluation of
contingent income tax liabilities.
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|
(3)
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During the nine months ended July 31, 2013, the Bank recognized a $39
million impairment loss ($29 million net of income taxes) on
technological developments.
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|
(4)
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During the quarter ended July 31, 2013, the Bank recognized $6 million
in charges ($4 million net of income taxes), consisting mainly of
retention bonuses, related to the Wealth Management acquisitions
(2012: $8 million, $6 million net of income taxes). For the nine-month
period ended July 31, 2013, the acquisition-related items consisted
of $20 million in charges ($14 million net of income taxes), consisting
mainly of retention bonuses, related to the Wealth Management
acquisitions (2012: $24 million, $17 million net of income taxes) and
the Bank's $1 million share ($1 million net of income taxes) in
integration charges and intangible asset amortization related to its
interest in TMX.
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(5)
|
During the quarter ended July 31, 2013, the Bank recorded $2 million ($2
million net of income taxes) for its share of the integration costs
incurred by Fiera (2012: $1 million, $1 million net of income taxes).
During the nine months ended July 31, 2013, the Bank recorded $5
million ($4 million net of income taxes) for its share of the
integration costs incurred by Fiera (2012: a $246 million gain ($212
million net of income taxes) had been recorded on the sale of Natcan's
operations. This gain had consisted of a $275 million sale price, from
which $29 million in goodwill, intangible assets and direct charges was
deducted. A total of $18 million ($13 million net of income taxes) in
other charges related to this transaction had been recorded. Lastly,
the Bank had also recorded $2 million ($2 million net of income taxes)
for its share of the integration costs incurred by Fiera).
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|
(6)
|
During the nine months ended July 31, 2012, the Bank had recognized $15
million ($11 million net of income taxes) in severance pay related to
streamlining measures undertaken in certain financial markets
activities.
|
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
From time to time, National Bank of Canada (the Bank) makes written and
oral forward-looking statements, such as those contained in the Major
Economic Trends and the Outlook for National Bank sections of the 2012
Annual Report, in other filings with Canadian securities regulators,
and in other communications, for the purpose of describing the economic
environment in which the Bank will operate during fiscal 2013 and the
objectives it has set for itself for that period. These forward-looking
statements are made in accordance with current securities legislation.
They include, among others, statements with respect to the
economy—particularly the Canadian and U.S. economies—market changes,
observations regarding the Bank's objectives and its strategies for
achieving them, Bank projected financial returns and certain risks
faced by the Bank. These forward-looking statements are typically
identified by future or conditional verbs or words such as "outlook,"
"believe," "anticipate," "estimate," "project," "expect," "intend,"
"plan," and similar terms and expressions.
By their very nature, such forward-looking statements require
assumptions to be made and involve inherent risks and uncertainties,
both general and specific. Assumptions about the performance of the
Canadian and U.S. economies in 2013 and how that will affect the Bank's
business are among the main factors considered in setting the Bank's
strategic priorities and objectives and in determining its financial
targets, including provisions for credit losses. In determining its
expectations for economic growth, both broadly and in the financial
services sector in particular, the Bank primarily considers historical
economic data provided by the Canadian and U.S. governments and their
agencies.
There is a strong possibility that express or implied projections
contained in these forward-looking statements will not materialize or
will not be accurate. The Bank recommends that readers not place undue
reliance on these statements, as a number of factors, many of which are
beyond the Bank's control, could cause actual future results,
conditions, actions or events to differ significantly from the targets,
expectations, estimates or intentions expressed in the forward-looking
statements. These factors include credit risk, market risk, liquidity
risk, operational risk, regulatory risk, reputation risk, and
environmental risk (all of which are described in greater detail in the
Risk Management section that begins on page 57 of the 2012 Annual
Report); the general economic environment and financial market
conditions in Canada, the United States and certain other countries in
which the Bank conducts business, including the effects of the debt
crisis in certain European countries; the lowering of the U.S.
long-term sovereign debt rating by Standard & Poor's; the lowering of
the sovereign debt rating of certain European countries and the impact
of changes that affect the Bank's credit ratings; the situation with
respect to the restructured notes of the master asset vehicle (MAV)
conduits, in particular the realizable value of underlying assets;
changes in the accounting policies the Bank uses to report its
financial condition, including uncertainties associated with
assumptions and critical accounting estimates; tax laws in the
countries in which the Bank operates, primarily Canada and the United
States; and changes to capital and liquidity guidelines and to the
manner in which they are to be presented and interpreted.
The foregoing list of risk factors is not exhaustive. Additional
information about these factors can be found in the Risk Management and
Other Risk Factors sections of the 2012 Annual Report. Investors and
others who base themselves 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. The Bank also
cautions readers not to place undue reliance on these forward-looking
statements.
The forward-looking information contained in this document is presented
for the purpose of interpreting the information contained herein and
may not be appropriate for other purposes.
DISCLOSURE OF THIRD QUARTER 2013 RESULTS
Conference Call
-
A conference call for analysts and institutional investors will be held
on Wednesday, August 28, 2013 at 1:30 p.m. EDT.
-
Access by telephone in listen-only mode: 1-866-862-3930 or 416-695-7806.
The access code is 3390539#.
-
A recording of the conference call can be heard until September 6, 2013
by dialing 1-800-408-3053 or 905-694-9451.
The access code is 5955220#.
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 quarterly financial statements are available at all times on
National Bank's website at nbc.ca/investorrelations.
-
The Report to Shareholders, Supplementary Financial Information and a
slide presentation will be available on the Investor Relations page of
National Bank's website shortly before the start of the conference
call.
SOURCE: National Bank of Canada
