National Bank of Canada (NA) Q3 2024 earnings summary

Executive summary

• Q3 2024 net income was $1,033 million, up 24% year-over-year, with diluted EPS of $2.89 reported and $2.68 adjusted, reflecting strong performance across all business segments.

• Return on equity reached 18.4% reported and 17.0% adjusted, with a CET1 capital ratio of 13.5%, up 23 bps sequentially.

• Revenue growth was seen in all segments, partially offset by higher non-interest expenses, provisions for credit losses, and income taxes.

• Progressed on the planned acquisition of Canadian Western Bank (CWB) for approximately $5 billion, with regulatory approval process underway and related specified items impacting Q3 results.

• Year-to-date net income reached $2,861 million, up 13% year-over-year, with nine-month diluted EPS at $8.03.

Financial highlights

• Q3 total revenues were $2,996 million, up 20% year-over-year; adjusted revenues were $2,982 million, up 17%.

• Pre-tax pre-provision earnings (PTPP) grew 34% reported and 24% adjusted year-over-year, reaching $1,455 million.

• Provisions for credit losses in Q3 2024 were $149 million (25 bps), up from $111 million in Q3 2023, with impaired PCL at $122 million (21 bps).

• Total loans reached $240 billion, up 9% year-over-year, and total deposits were $247 billion, up 6% year-over-year.

• Efficiency ratio improved to 51.4% from 56.4% year-over-year.

Outlook and guidance

• Management expects continued growth opportunities, supported by a diversified earnings mix and disciplined execution.

• Impaired PCL expected to return to pre-pandemic range of 15–25 bps for FY 2024, with year-end near the middle of the range.

• The CWB acquisition is expected to accelerate national growth, with closing anticipated in 2025 subject to regulatory approvals and active capital/interest rate risk management.

• Macroeconomic forecasts: Canadian GDP growth of 0.7% in 2024 and unemployment at 6.4%, with further interest rate cuts expected.

• Well-positioned for the final quarter of 2024, with a strong balance sheet and diversified business model.