A surge in trading revenue related to tariff-induced market volatility helped National Bank of Canada handily beat analyst expectations in its second quarter.
The bank’s adjusted profits, which excludes items related to its recent acquisition of Canadian Western Bank, amounted to $2.85 per diluted share, up from an adjusted profit of $2.54 per diluted share a year ago.
Analysts on average had expected an adjusted profit of $2.40 per share, according to LSEG Data & Analytics.
The beat came as National reported a 62% jump in its financial markets division. It saw record revenue from elevated market activity after U.S. President Donald Trump announced unexpectedly harsh tariffs in early April.
“These were very good trading conditions,” said Étienne Dubuc, head of financial markets at National Bank, on an earnings call Wednesday.
“These were a couple of the most profitable days in the history of the franchise following the ‘Liberation Day.'”
Other Canadian banks did not see the same boost from the volatility, but Dubuc said the bank’s structured products, market making and issuance all benefited from the bursts of volatility.
“With the volatility positions we had on the book, and the very defensive approach we had prior to to this tariff announcement, that was pretty much ideal positioning.”
The bank also reported revenue increases across its divisions, though those included boosts from its acquisition of Canadian Western Bank.
Revenue for the quarter totalled $3.65 billion, compared with $2.75 billion in the same quarter last year.
Unadjusted profits amounted to $896 million, down slightly from $906 million a year earlier.
Chief executive Laurent Ferreira said the bank was focused on further integrating Canadian Western, as well as navigating the global economic uncertainty. But he said he’s also seeing encouraging signs on the economic front.
“The latest developments regarding global trade negotiations seem to be progressing in the right direction. The effective tariff rate being absorbed by Canada is lower than initially anticipated,” he said on the call.
“Canadian businesses have been quick to initiate USMCA compliance, and as a result, the share of covered products has increased significantly. Despite the uncertainty, Canadian consumers and businesses are demonstrating resilience.”
Given that uncertainty, the bank did also boost its provisions for credit losses in the quarter to $545 million, up from $138 million last year.
But it also increased its dividend by four cents to $1.18 per share starting in the third quarter.
The bank’s wealth management division reported a net income of $232 million for the quarter, a 13% increase from the second quarter of 2024. Total revenues were $791 million, up 16% from the previous year, mainly driven by growth in fee-based revenues, net interest income and the inclusion of CWB revenues.
National Bank had $825.5 billion in assets under administration and $170.5 billion on assets under management as of March 30, 2025, up from $766 billion and $155.9 billion respectively at the same time last year.