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  5. NA: Hi, Could you please comment on NA earnings. [National Bank of Canada]
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Q: Hi, Could you please comment on NA earnings. Thank you
Asked by francis on June 05, 2023
5i Research Answer:

EPS and revenue were close to estimates. But, NA has turned more cautious on its outlook amid an uncertain economy, expecting a mid-single-digit pretax, pre-provision profit gain and negative operating leverage in fiscal 2023. The latter may remain negative in 3Q but return to positive in 4Q. The bank's concerns about the economy are reflected in slowing commercial and retail loan growth, particularly in mortgages. Net interest income growth may slow due to pressure on margin in 2H.  The bank lowered its 2023 impaired-loan-provision ratio range by 5 bps to 15-25 bps -- below the pre-pandemic level. NBC attributes the smaller provisions to Quebec, less US exposure and a smaller credit card portfolio. Despite the caution, NA raised its dividend, and the valuation of the stock is low enough to likely reflect many of these issues already.