The financial
information reported in this document is based on the unaudited
interim condensed consolidated financial statements for the quarter
and six-month period ended April 30, 2023 and is prepared
in accordance with International Financial Reporting Standards
(IFRS) as issued by the International Accounting Standards Board
(IASB), unless otherwise indicated. IFRS represent Canadian
generally accepted accounting principles (GAAP). All amounts are
presented in Canadian dollars.
|
MONTREAL, May 31, 2023
/CNW/ - For the second quarter of 2023, National Bank is
reporting net income of $847 million,
down 5% from $889 million in the
second quarter of 2022. Second-quarter diluted earnings per
share stood at $2.38 compared to
$2.53 in the second quarter of 2022.
Revenue growth across the business segments was offset by higher
non-interest expenses and higher provisions for credit losses.
For the six month-period ended April 30,
2023, the Bank's net income totalled $1,728 million, down 5% from $1,819 million in the same period of
2022. First-half diluted earnings per share stood at
$4.87 compared to $5.17 in the same period of 2022. Good
performance across all of the business segments, driven by revenue
growth, was offset by higher provisions for credit losses recorded
to reflect a less favourable macroeconomic outlook as well as by an
impact on tax expense arising from the Canadian government's 2022
tax measures.
For the six-month period ended April 30,
2023, adjusted net income(1) totalled
$1,752 million (excluding a
$24 million tax expense related to
the Canadian government's 2022 tax measures), down 4% from
$1,819 million in the same period of
2022, while first-half adjusted diluted earnings per
share(1) stood at $4.94
versus $5.17 in the first half of
2022.
"The Bank delivered solid second-quarter results and an
industry-leading ROE amidst a challenging environment, underscoring
its core strength, discipline and resiliency," said Laurent Ferreira, President and Chief Executive
Officer of National Bank of Canada. He added that "Our defensive posture
with strong capital and liquidity positions and prudent levels of
allowances for credit losses will continue to support profitable
growth and help us navigate the uncertainty that may lie
ahead."
Highlights
(millions of Canadian
dollars)
|
|
|
Quarter ended
April 30
|
|
|
Six months ended
April 30
|
|
|
|
|
|
2023
|
|
|
|
2022(2)
|
|
|
% Change
|
|
|
2023
|
|
|
|
2022(2)
|
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
847
|
|
|
|
889
|
|
|
(5)
|
|
|
1,728
|
|
|
|
1,819
|
|
|
(5)
|
|
Diluted earnings per
share (dollars)
|
|
$
|
2.38
|
|
|
$
|
2.53
|
|
|
(6)
|
|
$
|
4.87
|
|
|
$
|
5.17
|
|
|
(6)
|
|
Return on common
shareholders' equity(3)
|
|
|
17.5
|
%
|
|
|
20.7
|
%
|
|
|
|
|
17.7
|
%
|
|
|
21.3
|
%
|
|
|
|
Dividend payout
ratio(3)
|
|
|
40.2
|
%
|
|
|
32.2
|
%
|
|
|
|
|
40.2
|
%
|
|
|
32.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
results – Adjusted(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income –
Adjusted
|
|
|
847
|
|
|
|
889
|
|
|
(5)
|
|
|
1,752
|
|
|
|
1,819
|
|
|
(4)
|
|
Diluted earnings per
share – Adjusted (dollars)
|
|
$
|
2.38
|
|
|
$
|
2.53
|
|
|
(6)
|
|
$
|
4.94
|
|
|
$
|
5.17
|
|
|
(4)
|
|
Return on common
shareholders' equity – Adjusted(4)
|
|
|
17.5
|
%
|
|
|
20.7
|
%
|
|
|
|
|
17.9
|
%
|
|
|
21.3
|
%
|
|
|
|
Dividend payout ratio –
Adjusted(4)
|
|
|
39.9
|
%
|
|
|
32.1
|
%
|
|
|
|
|
39.9
|
%
|
|
|
32.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As at
April 30,
2023
|
|
|
As at
October 31,
2022
|
|
|
|
|
CET1 capital ratio
under Basel III(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
13.3
|
%
|
|
|
12.7
|
%
|
|
|
|
Leverage ratio under
Basel III(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
4.2
|
%
|
|
|
4.5
|
%
|
|
|
|
|
|
(1)
|
See the Financial
Reporting Method section on pages 3 to 5 for additional information
on non-GAAP financial measures.
|
(2)
|
For the quarter and
six-month period ended April 30, 2022, certain amounts have been
adjusted to reflect a change in accounting policy related to cloud
computing arrangements. For additional information, see Note 1 to
the audited annual consolidated financial statements for the year
ended October 31, 2022.
|
(3)
|
For details on the
composition of these measures, see the Glossary section on pages 49
to 52 in the Report to Shareholders –
Second Quarter 2023, which is available on the
Bank's website at nbc.ca or the SEDAR website at
sedar.com.
|
(4)
|
For additional
information on non-GAAP ratios, see the Financial Reporting Method
section on pages 4 to 9 in the Report to Shareholders
– Second Quarter 2023, which is available on
the Bank's website at nbc.ca or the SEDAR website at
sedar.com.
|
(5)
|
For additional
information on capital management measures, see the Financial
Reporting Method section on pages 4 to 9 in the Report to
Shareholders – Second Quarter 2023, which
is available on the Bank's website at nbc.ca or the SEDAR website
at sedar.com.
|
Personal and Commercial
- Net income totalled $335 million
in the second quarter of 2023 versus $293
million in the second quarter of 2022, for an increase of
14% that was driven by growth in total revenues, tempered by higher
non-interest expenses and higher provisions for credit losses.
- Income before provisions for credit losses and income taxes
totalled $499 million in the second
quarter of 2023, up 22% from $410
million in the second quarter of 2022.
- At $1,100 million, second-quarter
total revenues rose $138 million or
14% year over year due to an increase in net interest income
(driven by growth in loan and deposit volumes), to a higher net
interest margin, and to an increase in non-interest income.
- Compared to a year ago, personal lending grew 4% and commercial
lending grew 13%.
- The net interest margin(1) stood at 2.34% in the
second quarter of 2023, up from 2.10% in the second quarter of
2022.
- Second-quarter non-interest expenses stood at $601 million, up 9% from the second quarter of
2022.
- Second-quarter provisions for credit losses rose $26 million from second-quarter 2022, mainly due
to higher allowances for credit losses on non-impaired loans and on
impaired loans.
- At 54.6%, the second-quarter efficiency ratio(1)
improved from 57.4% in the second quarter of 2022.
Wealth Management
- Net income totalled $178 million
in the second quarter of 2023, a 9% increase from $163 million in the second quarter of 2022.
- Second-quarter total revenues amounted to $617 million compared to $579 million in second-quarter 2022, a
$38 million or 7% increase driven by
growth in net interest income.
- Second-quarter non-interest expenses stood at $372 million, up 4% from $357 million in second-quarter 2022.
- At 60.3%, the second-quarter efficiency ratio(1)
improved from 61.7% in the second quarter of 2022.
Financial Markets
- Net income totalled $268 million
in the second quarter of 2023, down 7% from $287 million in the second quarter of 2022.
- Second-quarter total revenues on a taxable equivalent basis
amounted to $672 million, a
$40 million or 6% year-over-year
increase driven by growth in corporate and investment banking
revenues.
- Second-quarter non-interest expenses stood at $283 million compared to $258 million in second-quarter 2022, an increase
that was partly attributable to compensation and employee benefits
as well as to operations support charges.
- Provisions for credit losses of $19
million were recorded in the second quarter of 2023 compared
to credit loss recoveries of $16
million recorded in the second quarter of 2022.
- At 42.1%, the second-quarter efficiency ratio(1) on
a taxable equivalent basis compares to 40.8% in the second quarter
of 2022.
U.S. Specialty Finance and International
- Net income totalled $128 million
in the second quarter of 2023 compared to $152 million in the second quarter of 2022, as a
stable amount of total revenues was more than offset by higher
non-interest expenses and higher provisions for credit losses.
- At $285 million, second-quarter
total revenues remained stable compared to second-quarter 2022, as
lower revenues at the Credigy subsidiary were offset by higher
revenues at the ABA Bank subsidiary.
- Second-quarter non-interest expenses stood at $98 million, an 11% year-over-year increase
attributable to business growth at ABA Bank.
- Second-quarter provisions for credit losses were up
$17 million year over year, with the
increase being attributable to Credigy.
- At 34.4%, the second-quarter efficiency ratio(1)
compares to 30.9% in the second quarter of 2022.
Other
- There was a net loss of $62
million in the second quarter of 2023 versus a net loss of
$6 million in the second quarter of
2022, a change arising mainly from a decrease in total revenues, as
higher gains on investments had been recorded in the second quarter
of 2022.
Capital Management
- As at April 30, 2023, the Common
Equity Tier 1 (CET1) capital ratio under Basel III(2)
stood at 13.3%, up from 12.7% as at October
31, 2022, notably due to the positive impact of implementing
the Basel III reforms.
- As at April 30, 2023, the Basel
III(2) leverage ratio was 4.2%, down from 4.5% as at
October 31, 2022.
Dividends
- On May 30, 2023, the Board of
Directors declared regular dividends on the various series of first
preferred shares and a dividend of $1.02 per common share, up 5 cents per common share or 5%, payable on
August 1, 2023, to shareholders of
record on June 26, 2023.
(1)
|
For details on the
composition of these measures, see the Glossary section on pages 49
to 52 in the Report to Shareholders – Second
Quarter 2023, which is available on the Bank's website at
nbc.ca or the SEDAR website at sedar.com.
|
(2)
|
For additional
information on capital management measures, see the Financial
Reporting Method section on pages 4 to 9 in the Report to
Shareholders – Second Quarter 2023, which
is available on the Bank's website at nbc.ca or the SEDAR website
at sedar.com.
|
Financial Reporting Method
The Bank's consolidated financial statements are prepared in
accordance with IFRS, as issued by the IASB. The financial
statements also comply with section 308(4) of the Bank
Act (Canada), which
states that, except as otherwise specified by the Office of the
Superintendent of Financial Institutions (Canada) (OSFI), the consolidated financial
statements are to be prepared in accordance with IFRS, which
represent Canadian GAAP. None of the OSFI accounting
requirements are exceptions to IFRS.
The presentation of segment disclosures is consistent with the
presentation adopted by the Bank for the fiscal year beginning
November 1, 2022. This presentation
reflects a revision to the method used for the sectoral allocation
of technology investment expenses, which are now immediately
allocated to the various business segments, whereas certain
expenses, notably costs incurred during the research phase of
projects, had previously been recorded in the Other heading
of segment results. This revision is consistent with the accounting
policy change applied in fiscal 2022 related to cloud computing
arrangements. For the quarter and six-month period ended
April 30, 2022, certain amounts have
been adjusted to reflect this accounting policy change. For
additional information, see Note 1 to the audited annual
consolidated financial statements for the year ended
October 31, 2022.
Non-GAAP and Other Financial Measures
The Bank uses a number of financial measures when assessing its
results and measuring overall performance. Some of these
financial measures are not calculated in accordance with GAAP.
Regulation 52-112 Respecting Non-GAAP and Other Financial
Measures Disclosure (Regulation 52-112) prescribes disclosure
requirements that apply to the following measures used by the
Bank:
- non-GAAP financial measures;
- non-GAAP ratios;
- supplementary financial measures;
- capital management measures.
Non-GAAP Financial Measures
The Bank uses non-GAAP
financial measures that do not have standardized meanings under
GAAP and that therefore may not be comparable to similar measures
used by other companies. Presenting non-GAAP financial measures
helps readers to better understand how management analyzes results,
shows the impacts of specified items on the results of the reported
periods, and allows readers to better assess results without the
specified items if they consider such items not to be reflective of
the underlying performance of the Bank's operations. In addition,
like many other financial institutions, the Bank uses the taxable
equivalent basis to calculate net interest income, non-interest
income, and income taxes. This calculation method consists of
grossing up certain revenues taxed at lower rates (notably
dividends) by the income tax to a level that would make it
comparable to revenues from taxable sources in Canada. An equivalent amount is added to
income taxes. This adjustment is necessary in order to perform a
uniform comparison of the return on different assets regardless of
their tax treatment.
The key non-GAAP financial measures used by the Bank to analyze
its results are described below, and a quantitative reconciliation
of these measures is presented in the tables in the Reconciliation
of Non-GAAP Financial Measures section on pages 4 and 5. It should
be noted that, for the six-month period ended April 30, 2023, a $24 million tax expense
related to the Canadian government's 2022 tax measures has been
excluded from results. This amount consists of a $32 million
tax expense with respect to the Canada Recovery Dividend, i.e., a
one-time, 15% tax on the fiscal 2021 and 2020 average taxable
income above $1 billion as well as an $8 million tax
recovery related to a 1.5% increase in the statutory tax rate,
which includes the impact related to current and deferred taxes for
fiscal 2022. No specified items had been excluded from results for
the quarter and six-month period ended April
30, 2022.
For additional information on non-GAAP financial measures,
non-GAAP ratios, supplementary financial measures, and capital
management measures, see the Financial Reporting Method section and
the Glossary section, on pages 4 to 9 and 49 to 52, respectively,
of the MD&A in the Report to shareholders for the Second
quarter of 2023, which is available on the Bank's website
at nbc.ca or the SEDAR website at sedar.com.
Reconciliation of Non-GAAP Financial Measures
Presentation of Results – Adjusted
(millions of Canadian
dollars)
|
|
|
|
|
|
|
|
|
Quarter ended April
30
|
|
|
|
|
|
|
|
|
|
|
|
|
2023
|
|
2022(1)
|
|
|
|
Personal and
Commercial
|
|
Wealth
Management
|
|
Financial
Markets
|
|
USSF&I
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
802
|
|
190
|
|
(286)
|
|
269
|
|
(93)
|
|
882
|
|
1,313
|
|
Taxable
equivalent
|
−
|
|
−
|
|
74
|
|
−
|
|
2
|
|
76
|
|
49
|
|
Net interest income
– Adjusted
|
802
|
|
190
|
|
(212)
|
|
269
|
|
(91)
|
|
958
|
|
1,362
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest
income
|
298
|
|
427
|
|
828
|
|
16
|
|
28
|
|
1,597
|
|
1,126
|
|
Taxable
equivalent
|
−
|
|
−
|
|
56
|
|
−
|
|
−
|
|
56
|
|
3
|
|
Non-interest income
– Adjusted
|
298
|
|
427
|
|
884
|
|
16
|
|
28
|
|
1,653
|
|
1,129
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues –
Adjusted
|
1,100
|
|
617
|
|
672
|
|
285
|
|
(63)
|
|
2,611
|
|
2,491
|
|
Non-interest
expenses
|
601
|
|
372
|
|
283
|
|
98
|
|
20
|
|
1,374
|
|
1,299
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before
provisions for credit losses and income taxes –
Adjusted
|
499
|
|
245
|
|
389
|
|
187
|
|
(83)
|
|
1,237
|
|
1,192
|
|
Provisions for
credit losses
|
37
|
|
−
|
|
19
|
|
26
|
|
3
|
|
85
|
|
3
|
|
Income before income
taxes – Adjusted
|
462
|
|
245
|
|
370
|
|
161
|
|
(86)
|
|
1,152
|
|
1,189
|
|
Income taxes
|
127
|
|
67
|
|
(28)
|
|
33
|
|
(26)
|
|
173
|
|
248
|
|
Taxable
equivalent
|
−
|
|
−
|
|
130
|
|
−
|
|
2
|
|
132
|
|
52
|
|
Income taxes –
Adjusted
|
127
|
|
67
|
|
102
|
|
33
|
|
(24)
|
|
305
|
|
300
|
|
Net
income
|
335
|
|
178
|
|
268
|
|
128
|
|
(62)
|
|
847
|
|
889
|
|
Non-controlling
interests
|
−
|
|
−
|
|
−
|
|
−
|
|
(1)
|
|
(1)
|
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to the Bank's
shareholders
and holders
of other equity instruments – Adjusted
|
335
|
|
178
|
|
268
|
|
128
|
|
(61)
|
|
848
|
|
890
|
|
Dividends on preferred
shares and distributions on
limited recourse
capital notes
|
|
|
|
|
|
|
|
|
|
|
35
|
|
25
|
|
Net income
attributable to common shareholders
|
|
|
|
|
|
|
|
|
|
|
813
|
|
865
|
|
|
|
(1)
|
For the quarter ended
April 30, 2022, certain amounts have been adjusted to reflect a
change in accounting policy related to cloud computing
arrangements. For additional information, see Note 1 to the audited
annual consolidated financial statements for the year ended October
31, 2022.
|
(millions of Canadian
dollars)
|
|
|
|
|
|
|
Six months ended April
30
|
|
|
|
|
|
|
|
|
|
|
|
|
2023
|
|
2022(1)
|
|
|
|
Personal and
Commercial
|
|
Wealth
Management
|
|
Financial
Markets
|
|
USSF&I
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
1,627
|
|
398
|
|
(454)
|
|
568
|
|
(158)
|
|
1,981
|
|
2,645
|
|
Taxable
equivalent
|
−
|
|
−
|
|
151
|
|
−
|
|
3
|
|
154
|
|
109
|
|
Net interest
income – Adjusted
|
1,627
|
|
398
|
|
(303)
|
|
568
|
|
(155)
|
|
2,135
|
|
2,754
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest
income
|
597
|
|
856
|
|
1,556
|
|
36
|
|
35
|
|
3,080
|
|
2,260
|
|
Taxable
equivalent
|
−
|
|
−
|
|
108
|
|
−
|
|
−
|
|
108
|
|
7
|
|
Non-interest income
– Adjusted
|
597
|
|
856
|
|
1,664
|
|
36
|
|
35
|
|
3,188
|
|
2,267
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues –
Adjusted
|
2,224
|
|
1,254
|
|
1,361
|
|
604
|
|
(120)
|
|
5,323
|
|
5,021
|
|
Non-interest
expenses
|
1,207
|
|
736
|
|
570
|
|
196
|
|
68
|
|
2,777
|
|
2,579
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before
provisions for credit losses and income taxes –
Adjusted
|
1,017
|
|
518
|
|
791
|
|
408
|
|
(188)
|
|
2,546
|
|
2,442
|
|
Provisions for
credit losses
|
98
|
|
−
|
|
10
|
|
61
|
|
2
|
|
171
|
|
1
|
|
Income before income
taxes – Adjusted
|
919
|
|
518
|
|
781
|
|
347
|
|
(190)
|
|
2,375
|
|
2,441
|
|
Income taxes
|
253
|
|
142
|
|
(44)
|
|
72
|
|
(38)
|
|
385
|
|
506
|
|
Taxable
equivalent
|
−
|
|
−
|
|
259
|
|
−
|
|
3
|
|
262
|
|
116
|
|
Income taxes related to
the Canadian government's 2022
tax
measures(2)
|
−
|
|
−
|
|
−
|
|
−
|
|
(24)
|
|
(24)
|
|
−
|
|
Income taxes –
Adjusted
|
253
|
|
142
|
|
215
|
|
72
|
|
(59)
|
|
623
|
|
622
|
|
Net income
– Adjusted
|
666
|
|
376
|
|
566
|
|
275
|
|
(131)
|
|
1,752
|
|
1,819
|
|
Specified items
after income taxes
|
−
|
|
−
|
|
−
|
|
−
|
|
(24)
|
|
(24)
|
|
−
|
|
Net
income
|
666
|
|
376
|
|
566
|
|
275
|
|
(155)
|
|
1,728
|
|
1,819
|
|
Non-controlling
interests
|
−
|
|
−
|
|
−
|
|
−
|
|
(1)
|
|
(1)
|
|
(1)
|
|
Net income
attributable to the Bank's
shareholders
and holders
of other equity instruments
|
666
|
|
376
|
|
566
|
|
275
|
|
(154)
|
|
1,729
|
|
1,820
|
|
Net income
attributable to the Bank's shareholders
and holders
of other equity instruments – Adjusted
|
666
|
|
376
|
|
566
|
|
275
|
|
(130)
|
|
1,753
|
|
1,820
|
|
Dividends on preferred
shares and distributions
on limited
recourse capital notes
|
|
|
|
|
|
|
|
|
|
|
70
|
|
51
|
|
Net income
attributable to common shareholders – Adjusted
|
|
|
|
|
|
|
|
|
|
|
1,683
|
|
1,769
|
|
|
|
(1)
|
For the six-month
period ended April 30, 2022, certain amounts have been adjusted to
reflect a change in accounting policy related to cloud computing
arrangements. For additional information, see Note 1 to the audited
annual consolidated financial statements for the year ended October
31, 2022.
|
(2)
|
During the six-month
period ended April 30, 2023, the Bank recorded a $32 million tax
expense with respect to the Canada Recovery Dividend, i.e., a
one-time, 15% tax on the fiscal 2021 and 2020 average taxable
income above $1 billion, as well as an $8 million tax recovery
related to the 1.5% increase in the statutory tax rate, which
includes the impact related to current and deferred taxes for
fiscal 2022. For additional information on these tax measures, see
the Income Taxes section on page 22 in the Report to
Shareholders – Second Quarter 2023, which is
available on the Bank's website at nbc.ca or the SEDAR website at
sedar.com.
|
Presentation of Basic and Diluted Earnings Per Share –
Adjusted
(Canadian
dollars)
|
|
Quarter ended
April 30
|
|
|
Six months ended
April 30
|
|
|
|
|
2023
|
|
|
2022(1)
|
|
|
2023
|
|
|
2022(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share
|
|
$
|
2.41
|
|
$
|
2.56
|
|
$
|
4.92
|
|
$
|
5.24
|
|
Income taxes related to
the Canadian government's 2022 tax
measures(2)
|
|
|
−
|
|
|
−
|
|
|
0.07
|
|
|
−
|
|
Basic earnings per
share – Adjusted
|
|
$
|
2.41
|
|
$
|
2.56
|
|
$
|
4.99
|
|
$
|
5.24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share
|
|
$
|
2.38
|
|
$
|
2.53
|
|
$
|
4.87
|
|
$
|
5.17
|
|
Income taxes related to
the Canadian government's 2022 tax
measures(2)
|
|
|
−
|
|
|
−
|
|
|
0.07
|
|
|
−
|
|
Diluted earnings per
share – Adjusted
|
|
$
|
2.38
|
|
$
|
2.53
|
|
$
|
4.94
|
|
$
|
5.17
|
|
|
|
(1)
|
For the quarter and
six-month period ended April 30, 2022, certain amounts have been
adjusted to reflect a change in accounting policy related to cloud
computing arrangements. For additional information, see Note 1 to
the audited annual consolidated financial statements for the year
ended October 31, 2022.
|
(2)
|
During the six-month
period ended April 30, 2023, the Bank recorded a $32 million tax
expense with respect to the Canada Recovery Dividend, i.e., a
one-time, 15% tax on the fiscal 2021 and 2020 average taxable
income above $1 billion, as well as an $8 million tax recovery
related to the 1.5% increase in the statutory tax rate, which
includes the impact related to current and deferred taxes for
fiscal 2022. For additional information on these tax measures, see
the Income Taxes section on page 22 in the Report to
Shareholders – Second Quarter 2023, which is
available on the Bank's website at nbc.ca or the SEDAR website at
sedar.com.
|
Highlights
(millions of Canadian
dollars, except per share amounts)
|
|
Quarter ended
April 30
|
|
|
Six months ended
April 30
|
|
|
|
|
2023
|
|
|
|
2022(1)
|
|
|
% Change
|
|
|
2023
|
|
|
|
2022(1)
|
|
% Change
|
|
Operating
results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
|
|
2,479
|
|
|
|
2,439
|
|
|
2
|
|
|
5,061
|
|
|
|
4,905
|
|
3
|
|
Income
before provisions for credit
losses and income
taxes
|
|
|
1,105
|
|
|
|
1,140
|
|
|
(3)
|
|
|
2,284
|
|
|
|
2,326
|
|
(2)
|
|
Net income
|
|
|
847
|
|
|
|
889
|
|
|
(5)
|
|
|
1,728
|
|
|
|
1,819
|
|
(5)
|
|
Return on common
shareholders' equity(2)
|
|
|
17.5
|
%
|
|
|
20.7
|
%
|
|
|
|
|
17.7
|
%
|
|
|
21.3
|
%
|
|
|
Earnings per
share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
2.41
|
|
|
$
|
2.56
|
|
|
(6)
|
|
$
|
4.92
|
|
|
$
|
5.24
|
|
(6)
|
|
|
Diluted
|
|
$
|
2.38
|
|
|
$
|
2.53
|
|
|
(6)
|
|
$
|
4.87
|
|
|
$
|
5.17
|
|
(6)
|
|
Operating results –
Adjusted(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues –
Adjusted(3)
|
|
|
2,611
|
|
|
|
2,491
|
|
|
5
|
|
|
5,323
|
|
|
|
5,021
|
|
6
|
|
Income before
provisions for credit losses
and income taxes
– Adjusted(3)
|
|
|
1,237
|
|
|
|
1,192
|
|
|
4
|
|
|
2,546
|
|
|
|
2,442
|
|
4
|
|
Net income –
Adjusted(3)
|
|
|
847
|
|
|
|
889
|
|
|
(5)
|
|
|
1,752
|
|
|
|
1,819
|
|
(4)
|
|
Return on common
shareholders' equity – Adjusted(4)
|
|
|
17.5
|
%
|
|
|
20.7
|
%
|
|
|
|
|
17.9
|
%
|
|
|
21.3
|
%
|
|
|
Operating leverage –
Adjusted(4)
|
|
|
(1.0)
|
%
|
|
|
2.5
|
%
|
|
|
|
|
(1.7)
|
%
|
|
|
3.0
|
%
|
|
|
Efficiency ratio –
Adjusted(4)
|
|
|
52.6
|
%
|
|
|
52.1
|
%
|
|
|
|
|
52.2
|
%
|
|
|
51.4
|
%
|
|
|
Earnings per share –
Adjusted(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
2.41
|
|
|
$
|
2.56
|
|
|
(6)
|
|
$
|
4.99
|
|
|
$
|
5.24
|
|
(5)
|
|
|
Diluted
|
|
$
|
2.38
|
|
|
$
|
2.53
|
|
|
(6)
|
|
$
|
4.94
|
|
|
$
|
5.17
|
|
(4)
|
|
Common share
information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends
declared
|
|
$
|
0.97
|
|
|
$
|
0.87
|
|
|
11
|
|
$
|
1.94
|
|
|
$
|
1.74
|
|
11
|
|
Book
value(2)
|
|
$
|
57.65
|
|
|
$
|
52.28
|
|
|
|
|
$
|
57.65
|
|
|
$
|
52.28
|
|
|
|
Share price
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High
|
|
$
|
103.45
|
|
|
$
|
104.59
|
|
|
|
|
$
|
103.45
|
|
|
$
|
105.44
|
|
|
|
|
Low
|
|
$
|
92.67
|
|
|
$
|
89.33
|
|
|
|
|
$
|
91.02
|
|
|
$
|
89.33
|
|
|
|
|
Close
|
|
$
|
101.03
|
|
|
$
|
89.72
|
|
|
|
|
$
|
101.03
|
|
|
$
|
89.72
|
|
|
|
Number of common shares
(thousands)
|
|
|
337,720
|
|
|
|
336,513
|
|
|
|
|
|
337,720
|
|
|
|
336,513
|
|
|
|
Market
capitalization
|
|
|
34,120
|
|
|
|
30,192
|
|
|
|
|
|
34,120
|
|
|
|
30,192
|
|
|
|
(millions of Canadian
dollars)
|
|
As at
April 30,
2023
|
|
|
As at
October
31,
2022
|
|
% Change
|
|
Balance sheet and
off-balance-sheet
|
|
|
|
|
|
|
|
|
Total assets
|
|
417,684
|
|
|
403,740
|
|
3
|
|
Loans and acceptances,
net of allowances
|
|
215,764
|
|
|
206,744
|
|
4
|
|
Deposits
|
|
281,514
|
|
|
266,394
|
|
6
|
|
Equity attributable to
common shareholders
|
|
19,470
|
|
|
18,594
|
|
5
|
|
Assets under
administration(2)
|
|
673,483
|
|
|
616,165
|
|
9
|
|
Assets under
management(2)
|
|
123,029
|
|
|
112,346
|
|
10
|
|
|
|
|
|
|
|
|
|
|
|
Regulatory ratios
under Basel III(5)
|
|
|
|
|
|
|
|
|
Capital
ratios
|
|
|
|
|
|
|
|
|
|
Common Equity Tier 1
(CET1)
|
|
13.3
|
%
|
|
12.7
|
%
|
|
|
|
Tier 1
|
|
16.0
|
%
|
|
15.4
|
%
|
|
|
|
Total
|
|
16.9
|
%
|
|
16.9
|
%
|
|
|
Leverage
ratio
|
|
4.2
|
%
|
|
4.5
|
%
|
|
|
TLAC
ratio(5)
|
|
29.3
|
%
|
|
27.7
|
%
|
|
|
TLAC leverage
ratio(5)
|
|
7.8
|
%
|
|
8.1
|
%
|
|
|
Liquidity coverage
ratio (LCR)(5)
|
|
155
|
%
|
|
140
|
%
|
|
|
Net stable funding
ratio (NSFR)(5)
|
|
118
|
%
|
|
117
|
%
|
|
|
Other
information
|
|
|
|
|
|
|
|
|
Number of employees –
Worldwide (full-time equivalent)
|
|
28,170
|
|
|
27,103
|
|
4
|
|
Number of branches in
Canada
|
|
374
|
|
|
378
|
|
(1)
|
|
Number of banking
machines in Canada
|
|
940
|
|
|
939
|
|
−
|
|
|
|
(1)
|
For the quarter and
six-month period ended April 30, 2022, certain amounts have been
adjusted to reflect a change in accounting policy related to cloud
computing arrangements. For additional information, see Note 1 to
the audited annual consolidated financial statements for the year
ended October 31, 2022.
|
(2)
|
For details on the
composition of these measures, see the Glossary section on pages 49
to 52 in the Report to Shareholders – Second
Quarter 2023, which is available on the Bank's website at
nbc.ca or the SEDAR website at sedar.com.
|
(3)
|
See the Financial
Reporting Method section on pages 3 to 5 for additional information
on non-GAAP financial measures.
|
(4)
|
For additional
information on non-GAAP ratios, see the Financial Reporting Method
section on pages 4 to 9 in the Report to Shareholders
– Second Quarter 2023, which is available on the
Bank's website at nbc.ca or the SEDAR website at
sedar.com.
|
(5)
|
For additional
information on capital management measures, see the Financial
Reporting Method section on pages 4 to 9 in the Report to
Shareholders – Second Quarter 2023, which is
available on the Bank's website at nbc.ca or the SEDAR website at
sedar.com.
|
Caution Regarding Forward-Looking Statements
Certain statements in this document are forward-looking
statements. All such statements are made in accordance with
applicable securities legislation in Canada and the
United States. Forward-looking statements in this document
may include, but are not limited to, statements with respect to the
economy—particularly the Canadian and U.S. economies—market
changes, the Bank's objectives, outlook and priorities for fiscal
year 2023 and beyond, the strategies or actions that will be taken
to achieve them, expectations for the Bank's financial condition,
the regulatory environment in which it operates, the impacts of—and
the Bank's response to—the COVID-19 pandemic, and certain risks it
faces. These forward-looking statements are typically identified by
verbs or words such as "outlook", "believe", "foresee", "forecast",
"anticipate", "estimate", "project", "expect", "intend" and "plan",
in their future or conditional forms, notably verbs such as "will",
"may", "should", "could" or "would" as well as similar terms and
expressions. Such forward-looking statements are made for the
purpose of assisting the holders of the Bank's securities in
understanding the Bank's financial position and results of
operations as at and for the periods ended on the dates presented,
as well as the Bank's vision, strategic objectives, and financial
performance targets, and may not be appropriate for other purposes.
These forward-looking statements are based on current expectations,
estimates, assumptions and intentions and are subject to
uncertainty and inherent risks, many of which are beyond the Bank's
control.
Assumptions about the performance of the Canadian and U.S.
economies in 2023 and how that performance will affect the Bank's
business are among the main factors considered in setting the
Bank's strategic priorities and objectives, including provisions
for credit losses. In determining its expectations for
economic conditions, both broadly and in the financial services
sector in particular, the Bank primarily considers historical
economic data provided by the governments of Canada, the United
States and certain other countries in which the Bank
conducts business, as well as their agencies.
Statements about the economy, market changes, and the Bank's
objectives, outlook and priorities for fiscal 2023 and thereafter
are based on a number of assumptions and are subject to risk
factors, many of which are beyond the Bank's control and the
impacts of which are difficult to predict. These risk factors
include, among others, the general economic environment and
financial market conditions in Canada, the United
States, and other countries where the Bank operates; the
impact of upheavals in the U.S. banking industry; exchange rate and
interest rate fluctuations; inflation; disruptions in global supply
chains; higher funding costs and greater market volatility; changes
made to fiscal, monetary, and other public policies; changes made
to regulations that affect the Bank's business; geopolitical and
sociopolitical uncertainty; the transition to a low-carbon economy
and the Bank's ability to satisfy stakeholder expectations on
environmental and social issues; significant changes in consumer
behaviour; the housing situation, real estate market, and household
indebtedness in Canada; the Bank's
ability to achieve its long-term strategies and key short-term
priorities; the timely development and launch of new products and
services; the Bank's ability to recruit and retain key personnel;
technological innovation and heightened competition from
established companies and from competitors offering non-traditional
services; changes in the performance and creditworthiness of the
Bank's clients and counterparties; the Bank's exposure to
significant regulatory matters or litigation; changes made to the
accounting policies used by the Bank to report financial
information, including the uncertainty inherent to assumptions and
critical accounting estimates; changes to tax legislation in the
countries where the Bank operates, i.e., primarily Canada and the
United States; changes made to capital and liquidity
guidelines as well as to the presentation and interpretation
thereof; changes to the credit ratings assigned to the Bank;
potential disruptions to key suppliers of goods and services to the
Bank; potential disruptions to the Bank's information technology
systems, including evolving cyberattack risk as well as identity
theft and theft of personal information; the risk of fraudulent
activity; and possible impacts of major events affecting the local
and global economies, including international conflicts, natural
disasters, and public health crises such as the COVID-19 pandemic,
the evolution of which is difficult to predict and could continue
to have repercussions on the Bank.
There is a strong possibility that the Bank's express or implied
predictions, forecasts, projections, expectations or conclusions
will not prove to be accurate, that its assumptions may not be
confirmed and that its vision, strategic objectives and financial
performance targets will not be achieved. The Bank recommends
that readers not place undue reliance on forward-looking
statements, as a number of factors could cause actual results to
differ significantly from the expectations, estimates or intentions
expressed in these forward-looking statements. These risk factors
include credit risk, market risk, liquidity and funding risk,
operational risk, regulatory compliance risk, reputation risk,
strategic risk, environmental and social risk, and certain emerging
risks or risks deemed significant, all of which are described in
greater detail in the Risk Management section beginning on page 65
of the 2022 Annual Report.
The foregoing list of risk factors is not
exhaustive. Additional information about these risk factors is
provided in the Risk Management section of the 2022 Annual
Report and the Risk Management section of the Report to
Shareholders for the Second Quarter of 2023. Investors and
others who rely 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. Except as required by law,
the Bank does not undertake to update any forward-looking
statements, whether written or oral, that may be made from time to
time, by it or on its behalf. The Bank cautions investors that
these forward-looking statements are not guarantees of future
performance and that actual events or results may differ
significantly from these statements due to a number of factors.
Disclosure of the Second Quarter 2023 results
Conference Call
- A conference call for analysts and institutional investors will
be held on Wednesday, May 31, 2023 at
1:00 p.m. EST.
- Access by telephone in listen-only mode: 1-800-806-5484 or
416-340-2217. The access code is 9583004#.
- A recording of the conference call can be heard until
August 31, 2023 by dialing
1-800-408-3053 or 905-694-9451. The access code is 5604431#.
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 Report to Shareholders (which includes the quarterly
consolidated financial statements) is available at all times on
National Bank's website at nbc.ca/investorrelations.
- The Report to Shareholders, the Supplementary
Financial Information, the Supplementary Regulatory Capital
and Pillar 3 Disclosure, and a slide presentation will be
available on the Investor Relations page of National Bank's website
on the morning of the day of the conference call.
SOURCE National Bank of Canada