Trading revenue at National Bank increased to $215-million during the three months ended April 30, from $198-million in the same period last year.Charla Jones/The Globe and Mail
Record revenue in fixed-income trading pushed second-quarter results higher at National Bank of Canada's capital markets arm, even as volatility in the markets began to wane.
Trading revenue at National Bank increased to $215-million during the three months ended April 30, from $198-million in the same period last year. The bank posted revenue of $77-million from trading fixed-income securities, a 79-per-cent jump from the $43-million of a year ago. The increase was fuelled by higher client volumes and robust activity in debt capital markets, particularly on the corporate side.
These results follow a strong 2016 for debt underwriting at National Bank, which ranked first in Canada for total government and corporate debt raised by an investment bank.
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In the second quarter, profit for the bank's financial markets segment as a whole increased to $175-million from $149-million a year ago. Total revenue also climbed, to $404-million from $358-million.
But not every group at the investment bank was firing on all cylinders.
Underwriting and advisory fees contracted slightly to $90-million in the second quarter from $94-million a year ago. Likewise, revenue generated by trading equities, as well as commodities and foreign exchange, fell compared to the same period in 2016.
A month into the third quarter, National Bank says it's seeing a boost in equity trading, while fixed-income trading remains robust.
"Trading is fine. What we saw in Q2, we are seeing or expecting about the same," said Denis Girouard, the head of financial markets at National Bank, during a conference call Wednesday with analysts. "Our activity in fixed income is doing very well, and also in the equity derivatives and equity. … We can't complain, but the quarter is still very young."
Overall, the second quarter was a robust period for capital markets across Bay Street.