(Reuters) – National Bank of Canada reported a fall in second-quarter profit on Wednesday as a shaky economy and a meltdown in the U.S. banking sector prompted the lender to set aside higher provisions.
The results come after Canada’s top four banks reported lower-than-expected earnings as they had to set aside more money for bad loans and incurred higher expenses related to workforce and other tech investments.
National Bank, like its peers, has also set aside rainy-day funds, signaling fears that the economy is set for challenging times that could see more Canadians defaulting on their loans.
“Our defensive posture with strong capital and liquidity positions and prudent levels of allowances for credit losses will continue to support profitable growth and help us navigate the uncertainty that may lie ahead,” the bank’s CEO Laurent Ferreira said.
Net income on an adjusted basis for the three months ended April 30 came in at C$847 million ($633.4 million) or C$2.38 a share, compared to C$889 million or C$2.53 a year ago.
Provision for credit losses rose to C$85 million from C$3 million a year ago.
($1 = 1.3372 Canadian dollars)
(Reporting by Mehnaz Yasmin in Bengaluru and Nivedita Balu in Toronto; Editing by Pooja Desai and Jan Harvey)
