QUOTE AND NEWS
Forbes  Apr 2  Comment 
First the good news: Target seems to be finding its way out of the legal tangle it got into as a result of the company’s data breach. Two banks, Trustmark National Bank and Green Bank NA both said they would dismiss their cases “without...
Yahoo  Apr 1  Comment 
Trustmark National Bank, which is based in New York, and Houston-based Green Bank NA said they would dismiss their cases "without prejudice to re-filing," according to filings on Friday and Monday in the federal court in Chicago. The banks had...
StreetInsider.com  Mar 26  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Dividends/HSBC+NA+%28HSBC%29+Annouces+CCAR+2014+Result%3B+Plans+Rejected/9320084.html for the full story.
DailyFinance  Mar 19  Comment 
WOODSTOCK, AL--(Marketwired - March 19, 2014) - ThyssenKrupp Materials NA, Inc. (TKMNA) recently opened a 100,000 square-foot carbon, stainless and aluminum coil processing and distribution service center in Woodstock, Alabama. TKMNA invested more...
SeekingAlpha  Mar 9  Comment 
By Markus Aarnio: National Bank of Canada (OTCPK:NTIOF) provides various financial services to retail, commercial, corporate, and institutional clients primarily in Canada, the United States, and Europe. (click to enlarge) Insider buying...
DailyFinance  Feb 19  Comment 
MONTREAL, QUEBEC -- (Marketwired) -- 02/19/14 -- CGI (TSX: GIB.A)(NYSE: GIB) announced today that its IT services agreement with National Bank of Canada has been extended to 2020. The value of the extension is $100 million. CGI also signed a new...
OilVoice  Jan 17  Comment 
GDF SUEZ Gas NA GSGNA announced that it has named Frank Katulak as its new President and CEO. Katulak has been working in the natural gas and LNG industries for more than 30 years with the last 15
Insurance Journal  Jan 9  Comment 
Zurich North America announced that Taffy Jo Mayers, regional sales director for the Midwest region, has been accepted as a fellow for World Business Chicago’s Plan for Economic Growth and Jobs. The Plan is a framework for future economic growth...
Benzinga  Jan 6  Comment 
In a report published Monday, Morgan Stanley analyst Daniel Brennan downgraded NanoString Technologies (NASDAQ: NSTG), changing its price target from $14.00 to NA. According to the report, since IPO, NSTG's stock is up ~70% vs the S&P 500...




 
TOP CONTRIBUTORS

National Bank of Canada (TSE:NA) is the 6th largest bank and 8th largest financial institution by market cap in Canada.[1] Mainly used by French-speaking Canadians, it is headquartered in Montreal, Quebec, founded in 1859.[2] The bank operates in three business segments: Personal and Commercial, Wealth Management, and Financial Markets. The Personal and Commercial Banking segment provides financial products and services to clients. Wealth Management provides investment solutions, products and specialized services to serve the investment and savings needs of clients. Financial Markets provides corporate, public sector and institutional clients with banking and investment banking services, and gives clients access to the Canadian capital markets.[3]


Business Growth

During 2010, the National Bank of Canada earned revenues of $4.5 billion, a 5% increase from 2009, and its net interest income increased 1% to $2.12 billion. This increase was driven especially by the Personal and Commercial segment due to steady growth in loan and deposit volumes.[4]

The bank has pursued a strategy of maintaining its leadership in fixed income, and continually expanding the market for structured products. The bank led or joint-led 45 deals for 15.2% of all public sector debt issuance, rising in rank to 4th in 2010 from 6th in 2009 in the Thomson Reuters underwriting league tables. In addition, the bank was ranked number 2 in secondary trading of ETFs with a 24% market share.[5]

Trends and Forces

The USD/CAD relationship impacts operating revenue and net income

Fluctuations in the U.S. Dollar (USD) and the Canadian Dollar (CAD) impact the bank’s business operations and its ADR share price. On one hand, a rise in the US Dollar boosts values of its American portfolio of loans, but also reduces the dividend paid on the ADR all else equal. On the other hand, the Canadian economy is largely linked to exports of natural resources.[6] As the CAD depreciates, it boosts domestic revenue for Canadian resources. For instance, if oil trades for $50USD/bl, and the USD/CAD is 1, then a Canadian exporter receives $50CAD/bl for his oil. Now if the CAD depreciates 20% relative to the USD and oil does not move, he would then receive $60CAD/bl for the same oil; thus, improving his return. Therefore, Canada's economic health is dependent on the USD/CAD relationship.

Exposure to lending/credit risks

As loaning is a large part of the bank's operations, it has high exposure to credit risk, and relies on accurately predicting how well its customers will repay their loans. The corporation must maintain proactive credit risk management and constantly weigh ongoing economic factors--should they overestimate its customers' ability to repay loans, the bank's overall performance will suffer.

Competition

The Big Five

Bank Net Income (C$/Yr) Assets (C$) Market Cap (NYSE) Yields (NYSE) Branches Tier 1 Capital Ratio Employees Customers Forbes Global 2000 Rank
RBC[7] 4.555B723,859M37.68B7.2%17419.00%70,00016,000,00055
Bank of Nova Scotia (BNS)[8] 3.140B455,500M24.57B7.5%9.30%69,00012,500,00092
Bank Of Montreal (BMO) [9]1.978B152,687M12.37B9.4%12809.77%37,1008,200,000189
Toronto-Dominion Bank (TD)[10] 3.813B563,214M26.92B6.8%22009.80%52,00010,000,00095
Canadian Imperial Bank of Commerce (CM)[11] -2.060B353,930M1.86B8.3%104810.50%40,45711,000,000159

As the 6th largest bank in Canada, the National Bank of Canada competes with the other top banks in Canada, colloquially named the Big Five.




References

  1. [1]
  2. [2]
  3. [3]
  4. 2010 Annual report Pg. 41
  5. 2010 Annual report Pg. 39
  6. Library of Parliament, "Energy Resources: Boon or Curse For the Canadian Economy" By Philippe Bergevin, 31 March 2008
  7. [4]
  8. [http://www.scotiabank.com/images/en/filesaboutscotia/19551.pdf Bank of Nova Scotia FY 2008 10-K]
  9. [http://www2.bmo.com/content/0,1089,divId-3_langId-1_navCode-3198,00.html Bank of Montreal FY 2008 10-K]
  10. [http://www.td.com/ar2008/pdfs/ar2008.pdf TD FY 2008 10-K]
  11. [http://www.cibc.com/ca/pdf/investor/2008-financial-results.pdf CIBC FY 2008 10-K]
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