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Bellatrix Exploration Ltd. TSX NYSE BXE announces that its syndicate of lenders led by National Bank Financial as Sole Lead Arranger and Book Runner and National Bank of Canada as Administrative
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Insurance Journal  Oct 8  Comment 
Commercial property and casualty insurer Zurich North America, named Marcus Cooper is now the commercial markets regional leader for the South. He is based at Zurich’s North America headquarters in Schaumburg, Ill. Cooper is responsible for...
Forbes  Oct 6  Comment 
On 10/8/14, National Bank of Canada's Non-Cumulative Fixed Rate First Preferred Shares Series 16 (Toronto: NA-PRL) will trade ex-dividend, for its quarterly dividend of $0.3031, payable on 11/17/14. As a percentage of NA.PRL's recent share price...
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DailyFinance  Sep 26  Comment 
TORONTO, ONTARIO -- (Marketwired) -- 09/26/14 -- Dundee Corporation ("Dundee") (TSX:DC.A) is pleased to announce that it has secured a $300 million, three-year revolving term credit facility with a syndicate of Canadian Schedule I Chartered Banks,...
Automotive World  Sep 2  Comment 
Automotive World speaks to Meritor on the drivers as well as the obstacles for greater 6x2 uptake in North America. The post Canadian regulations threaten 6×2′s NA traction appeared first on Automotive World.
SeekingAlpha  Aug 31  Comment 
By WestEnd511: National Bank of Canada (OTCPK:NTIOF) reported a solid Q3 in which adjusted EPS of $1.30 was 9% ahead of consensus, driven by wealth management (+36% y/y) and wholesale (+21%) while Canadian P&C lagged the other segment with +6% y/y...
Forbes  Aug 29  Comment 
The worst recession since the Great Depression ended in June 2009, but the recovery has been slow and halting—all the more reason to take comfort in recently released data showing second-quarter business jet deliveries in North America, mainly...
Benzinga  Aug 27  Comment 
National Bank of Canada (OTC: NTIOF) reported better-than-expected third-quarter profit. The Montreal-based bank's quarterly net income surged to C$441 million ($404.59 million), or C$1.24 per share, versus a year-ago profit of C$402 million, or...




 
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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