Skip to main content
The Globe and Mail
Get full access to globeandmail.com
Support quality journalism
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
The Globe and Mail
Support quality journalism
Get full access to globeandmail.com
Globe and Mail website displayed on various devices
Just$1.99
per week
for the first 24 weeks

var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){console.log("scroll");var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))}pencilInit(".js-sub-pencil",!1);

The entrance for National Bank on the corner of York St. and Adelaide St. West in Toronto's Financial district.

Charla Jones/The Globe and Mail

National Bank of Canada continues to churn out solid profits from its core operations, but must iron out wrinkles created by one-time items.

All three of the bank's business lines – personal and commercial banking, wealth management and financial markets – performed better during the fourth quarter than in the same period of 2012, but one-time charges such as severance pay and employee retention bonuses bit into the bottom line.

Canada's sixth-largest lender made $337-million last quarter, down from $343-million a year prior. Excluding one-time items, National Bank made $370-million, or $2.09 per share, up from $343-million in the fourth quarter of 2012 and in line with analyst estimates.

Story continues below advertisement

The bank also hiked its dividend by 6 per cent to 92 cents per share quarterly, a move that was widely expected, and announced plans for a two-for-one stock split, meaning every shareholder will receive an additional common share for each share they already hold.

The stock split will halve the dollar value of National Bank's shares, which had been nearing $100. Before earnings season started Tuesday, Big Six bank stocks had been on a wild run for nearly six months, and National Bank's was one of the top performers, gaining 25 per cent since late June.

The fourth quarter profit capped off an encouraging year. It can be difficult to compare National Bank's total 2013 revenues and profits to those from the year prior because of numerous one-time gains, such as the sale of its Natcan business, and several one-time expenses, such as severance pay, but all three of the bank's core divisions made gains this year.

Most notably, wealth management earnings jumped 26 per cent for the full year and financial markets profits climbed 17 per cent.

In personal and commercial banking, National is dealing with the same issues as its Big Six bank peers. Fourth-quarter net income climbed 15 per cent higher to $177-million on the back of encouraging loan growth, but the bank is making less per loan.

Chief financial officer Ghislain Parent said on a conference call Wednesday that he believes this unit can eke out more growth in 2014. National Bank is highly levered to the Quebec economy, and the province's economic growth is finally expected to pick up some steam next year.

Wealth management continued to please investors, with fourth-quarter profit up 67 per cent from the year prior. Much like Bank of Montreal, which also reported strong wealth-management profits on Tuesday, National's equivalent unit benefited from rising markets, helping to boost its fees that are calculated as a percentage of the value of assets under management.

Story continues below advertisement

Financial markets' earnings of $331-million beat the profit from the same period in 2012. However, this unit's earnings are tough to predict. Fixed-income trading revenues took a hit last quarter, while equity trading revenues rose. In corporate and investment banking, equity underwriting fees took a hit while banking services revenues climbed higher.

Report an error Editorial code of conduct
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies