Mr. Laurent Ferreira reports

NATIONAL BANK REPORTS ITS RESULTS FOR THE THIRD QUARTER OF 2024

For the third quarter of 2024, National Bank had net income of $1,033-million, up 24 per cent from $830-million in the third quarter of 2023. Third quarter diluted earnings per share stood at $2.89 compared with $2.33 in the third quarter of 2023. These increases were driven by good performance in all of the business segments. Adjusted net income, which excludes specified items (notably the items related to the agreement to acquire Canadian Western Bank (CWB) recorded during the third quarter of 2024), totalled $960-million compared with $781-million in the same quarter of 2023. Adjusted diluted earnings per share stood at $2.68 compared with $2.18 in the third quarter of 2023.

For the first nine months of 2024, the bank's net income totalled $2,861-million, up 13 per cent from $2,538-million in the same period of 2023. Nine-month diluted earnings per share stood at $8.03 versus $7.14 in the same period last year. These increases were driven by good performance, owing to revenue growth, in all of the business segments, partly offset by increases in non-interest expenses, provisions for credit losses and income taxes. Nine-month adjusted net income, which excludes specified items, totalled $2,788-million, up 11 per cent from $2,513-million in the same period of 2023, and nine-month adjusted diluted earnings per share stood at $7.82, up 11 per cent from $7.06 in the same period of 2023.

"Our strong financial results for the third quarter reflect our diversified earnings mix and solid credit profile as well as disciplined execution across the bank," said Laurent Ferreira, president and chief executive officer of National Bank of Canada. "With our prudent approach to capital, credit and costs, we remain well positioned in a complex macroenvironment and we look forward to the growth opportunities ahead."

Personal and commercial

• Net income totalled $366-million in the third quarter of 2024 versus $319-million in the third quarter of 2023, a 15-per-cent increase that was driven by growth in total revenues.
• At $1,198-million, third quarter total revenues rose $83-million or 7 per cent year over year, mainly due to an increase in net interest income (driven by growth in loan and deposit volumes), partly offset by a lower net interest margin.
• Compared with a year ago, personal lending grew 4 per cent and commercial lending grew 14 per cent.
• The net interest margin stood at 2.31 per cent in the third quarter of 2024, down from 2.34 per cent in the third quarter of 2023.
• Third quarter non-interest expenses stood at $615-million, up 3 per cent year over year.
• Provisions for credit losses rose $4-million year over year.
• At 51.3 per cent, the third quarter efficiency ratio improved from 53.8 per cent in the third quarter of 2023.

Wealth management

• Net income totalled $217-million in the third quarter of 2024, a 19-per-cent increase from $183-million in the third quarter of 2023.
• Third quarter total revenues amounted to $716-million compared with $629-million in third quarter 2023, an $87-million or 14-per-cent increase driven by growth in fee-based revenues and net interest income.
• Third quarter non-interest expenses stood at $416-million versus $375-million in third quarter 2023, an 11-per-cent increase associated with revenue growth.
• At 58.1 per cent, the third quarter efficiency ratio improved from 59.6 per cent in the third quarter of 2023.

Financial markets

• Net income totalled $318-million in the third quarter of 2024, up 55 per cent from $205-million in the third quarter of 2023.
• Third quarter total revenues on a taxable equivalent basis amounted to $781-million, a 39-per-cent increase that was due to growth in global markets revenues and in corporate and investment banking revenues.
• Third quarter non-interest expenses stood at $320-million compared with $272-million in third quarter 2023, an increase that was partly due to variable compensation and to the segment's technological investments.
• Third quarter provisions for credit losses stood at $22-million compared with $5-million in the third quarter of 2023.
• At 41.0 per cent, the efficiency ratio on a taxable equivalent basis improved from 48.6 per cent in the third quarter of 2023.

U.S. specialty finance and international

• Net income totalled $158-million in the third quarter of 2024, up 23 per cent from $128-million in the third quarter of 2023.
• Third quarter total revenues amounted to $361-million, a 24-per-cent year-over-year increase driven by revenue growth at both the Credigy and ABA Bank subsidiaries.
• Third quarter non-interest expenses stood at $115-million, a 15-per-cent year-over-year increase attributable to business growth at Credigy and ABA Bank.
• Third quarter provisions for credit losses were up $17-million year over year, with the increase being attributable to both Credigy and ABA Bank.
• At 31.9 per cent, the efficiency ratio improved from 34.2 per cent in the third quarter of 2023.

Other

• There was a net loss of $26-million in the third quarter of 2024 compared with a net loss of $5-million in the same quarter of 2023, a change that essentially came from a year-over-year increase in non-interest expenses (notably higher variable compensation associated with the bank's revenue growth), partly offset by a more favourable impact of specified items on net loss in the third quarter of 2024.

CWB transaction

• On June 11, 2024, the bank entered into an agreement to acquire all of the issued and outstanding common shares of CWB by way of a share exchange valuing CWB at approximately $5.0-billion. This transaction will enable the bank to accelerate its growth across Canada. The transaction is subject to the satisfaction of customary closing conditions, including regulatory approvals and is expected to close in 2025. For additional information, see the CWB transaction section of in the report to shareholders -- third quarter 2024, which is available on the bank's website or the SEDAR+ website.

Capital management

• As at July 31, 2024, the Common Equity Tier 1 (CET1) capital ratio under Basel III stood at 13.5 per cent, unchanged from Oct. 31, 2023.
• As at July 31, 2024, the Basel III leverage ratio was 4.4 per cent, unchanged from Oct. 31, 2023.

Dividends

• On Aug. 27, 2024, the board of directors declared regular dividends on the various series of first preferred shares and a dividend of $1.10 per common share, payable on Nov. 1, 2024, to shareholders of record on Sept. 30, 2024.

For details on the composition of these measures, see the glossary section on pages 49 to 52 in the report to shareholders -- third quarter 2024, which is available on the bank's website or the SEDAR+ website.

Conference call

A conference call for analysts and institutional investors will be held on Wednesday, Aug. 28, 2024, at 11 a.m. ET.

Access by telephone in listen-only mode: 1-800-806-5484 or 416-340-2217. The access code is 8438144 followed by the pound key. A recording of the conference call can be heard until Nov. 22, 2024, by dialling 1-800-408-3053 or 905-694-9451. The access code is 8808810 followed by the pound ley.

Webcast

The conference call will be webcast live on the National Bank website.

A recording of the webcast will also be available on National Bank's website after the call.

We seek Safe Harbor.