National Bank profit slides as economic gloom weighs on second-quarter earnings

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National Bank of Canada narrowly missed analysts’ profit forecasts amid higher costs, rising reserves for potential loan losses

In the quarter, National Bank set aside $85-million in provisions for credit losses – the funds banks set aside to cover loans that may default. That was lower than analysts anticipated, and included $27-million against loans that are still being repaid, based on models that use economic forecasting to predict future losses.

Total revenue rose to $2.48-billion in the quarter, up from $2.44-billion in the same period a year earlier. But expenses increased 6 per cent to $1.37-billion, which the bank said was driven by increased hiring last year, wage inflation and technology expenses.

 

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