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Fernando Morales/The Globe and Mail

National Bank of Canada kicked off 2014 in fine form, driven by strong earnings from capital markets and wealth management.

The Montreal-based lender made $384-million from its core operations. After accounting for one-time items, the bank made $405-million, or $1.15 a share, during the first quarter, handily beating analyst expectations of $1.05 a share.

Although the bank's personal and commercial banking growth cooled, its capital markets unit recorded its second-best quarterly showing in two years, while wealth management also soared.

National Bank's capital markets profit, which amounted to $144-million, was driven by a 28-per-cent spike in trading revenues. Although fixed-income trading was rather weak, equities roared back to life, with revenues from this type of trading spiking to $88-million, up from $50-million during the same period in 2013.

Hot equity markets also aided National Bank's wealth management arm by boosting the value of assets under management. Banks typically earn fees as a percentage of these asset values, so they earn more as markets rise.

National Bank's acquisition of TD Waterhouse Institutional Services, which provides back office support to independent advisers, added an extra $6-million in earnings to the unit's $76-million profit.

However, earnings from personal and commercial banking, which comprises the lion's share of the bank's profits, proved that this area is cooling in Canada. The unit's $168-million profit amounted to only a 3-per-cent rise over the previous year, and barely any growth over the fourth quarter.

After stripping out one-time items, such as a $33-million after-tax gain on restructured notes, National Bank's quarterly core profit was a record for the bank.

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