National Bank of Canada (TSE: NA) 2022 first-quarter profit surged, boosted by gains across all of its divisions as well as the reversal of provisions for credit losses.
Earnings & Revenue
Profit came in at C$932 million (C$2.65 per diluted share) in Q1 2022, up 22% from a profit of C$761 million (C$2.15 per share) in Q1 2021. Diluted EPS beat estimates of C$2.23 per share.
Revenue was C$2.47 billion, up 11% from C$2.22 billion in the prior-year quarter.
National Bank recovered C$2 million of its provisions in credit losses in the first quarter, compared to the C$81 million it had set aside for bad debts in the same quarter last year.
National Bank president and CEO Laurent Ferreira said, ”The Bank is entering fiscal 2022 on a positive note thanks to excellent performance by its business segments, strong regulatory capital, and adequate allowances for credit losses. Solid revenue growth helped the Bank achieve a high return on equity in the first quarter.”
Changes to Leadership Team
The Montreal-based bank announced that Ghislain Parent, who served as chief financial officer and executive vice-president for more than a decade, is moving into a new role as executive vice president — international. He will oversee the bank’s overseas subsidiaries Credigy in the United States and ABA Bank in Cambodia.
Marie Chantal Gingras will take over as chief financial officer and executive vice-president on April 1 after 24 years with the bank, most recently as senior vice-president — financial accounting.
Wall Street’s Take
Following the results, Canaccord Genuity analyst Scott Chan kept a Hold rating on NA and set a C$109 price target. This implies 5.7% upside potential.
The rest of the Street is neutral on NA with a Hold consensus rating based on three Buys, five Holds, and one Sell. The average National Bank of Canada price target of C$110.25 implies 6.9% upside potential to current levels.
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