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The head office of the National Bank of Canada, in Montreal, on April 21, 2017.Ryan Remiorz/The Canadian Press

National Bank of Canada reported higher third-quarter profit as increased lending to consumers and businesses helped drive up revenue, bolstered by a reversal in loan loss provisions.

The Montreal-based bank is the fourth major lender to surpass analysts’ estimates for the quarter that ended July 31, and appears to be benefitting from a recovering Quebec economy.

For the three months that ended July 31, National Bank earned $839-million, or $2.36 per share, compared with $602-million, or $1.66 per share, in the same quarter last year.

On average, analysts expected earnings per share of $2.13, according to Refinitiv.

National Bank recovered $43-million in provisions for credit losses – the funds banks set aside to cover loans that may default. That was largely because the bank expects fewer losses than it did early in the pandemic as economic forecasts have improved.

As lockdown measures from the COVID-19 pandemic start to lift, the bank’s clients are borrowing more as commercial loan balances increased 14 per cent and personal loans were up 10 per cent.

Other major banks that have reported third-quarter results had large increases in mortgage loans, but more modest growth in personal and commercial lending.

Profit from personal and commercial banking was $330-million, compared with $233-million a year earlier, as revenue increased 10 per cent and loan loss provisions declined.

A busy quarter for investment and corporate banking helped push financial markets profits 21-per-cent higher to $227-million. And wealth management profits rose 30 per cent year-over-year to $165-million, as the bank collected more fees on clients’ investments.

Profit from the bank’s U.S. specialty finance and international division, which includes subsidiaries Credigy Ltd. and Cambodia-based ABA Bank, rose 85 per cent to $161-million. The increase was partly because of declining loan loss provisions at Credigy.

The bank kept its quarterly dividend unchanged at 71 cents per share in keeping with temporary restrictions imposed by Canada’s banking regulator.

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