National Bank of Canada is raising its quarterly dividend following a second-quarter profit that more than doubled to $484 million, beating analyst estimates.
The country’s sixth-largest bank said Wednesday that its net income amounted to $1.28 per diluted share, up from 52¢ per share or $210 million in last year’s second quarter.
Its dividend will increase by 2¢ per share or 3.6% to 58¢ per share, starting with the Aug. 1 payment.
“Our strong performance was driven by double-digit growth across all our businesses, effective cost control, growth of our balance sheet while maintaining credit quality and continued progress in our transformation,” CEO Louis Vachon said in a conference call.
Revenue for the period ended April 30 was up 12% to just under $1.6 billion.
In addition to the dividend hike, the bank announced it may also buy back up to 1.8% of its shares from the open market.
Vachon told analysts that the Montreal-based bank will spend the coming year integrating its investment in Cambodia’s ABA Bank and won’t pursue any significant new investments in emerging markets.
Last year’s second-quarter included a $183-million after-tax provision for credit losses for loans to the oil and gas sector that were partially reversed this year.
The head of risk management, William Bonnell, said the bank is confident that its current provisions for loan losses are adequate despite continued volatility in energy prices.