The bank's businesses saw strong revenue growth across the board
Propelled by substantial revenue growth in most of its businesses, National Bank reported net income of $776 million in the fourth quarter, much higher than the $492 million seen during Q4 2020.
Fourth-quarter diluted earnings per share grew from $1.36 to $2.19 during that period. On top of surging revenues, the Q4 annual increases were driven by “reversals of allowances for credit losses on non-impaired loans owing to improvements in the macroeconomic outlook and in credit conditions as well as by a reduction in provisions for credit losses on impaired loans compared to the fourth quarter of 2020,” National Bank said.
Income before provisions for credit losses and income taxes grew by 29% annually to reach $953 million in the fourth quarter.
For the year ending October 31, National Bank’s net income totalled $3.177 billion versus $2.083 billion in fiscal 2020. Diluted earnings per share spiked from $5.70 to $8.96 as of fiscal 2021.
“These increases were due to a significant year-over-year decrease in provisions for credit losses on non-impaired loans, as macroeconomic and credit conditions improved from those in fiscal 2020, as well as to a significant reduction in provisions for credit losses on impaired loans,” National Bank said. “Also contributing to the growth in net income and diluted earnings per share was the excellent performance turned in by all the bank’s business segments, notably achieved through revenue growth.”
As of fiscal 2021, income before provisions for credit losses and income taxes grew by 20% year over year to reach $4.074 billion, mainly driven by revenue growth across all of the bank’s businesses.
“The bank delivered outstanding results in fiscal 2021. We generated superior organic growth and an industry-leading return on equity while maintaining strong capital levels and prudent allowances for credit losses,” said Laurent Ferreira, president and CEO of National Bank of Canada.
“The bank’s sustained performance reinforces our commitment to continue pursuing fitting strategies in terms of business mix, capital allocation, and risk management. We enter the new year on strong footing, well-positioned to generate solid growth across our business segments and deliver superior returns to our shareholders.”