QUOTE AND NEWS
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...
SeekingAlpha  Aug 22  Comment 
By Livio Filice: For Canadians it is hard to ignore the significant amount of infrastructure construction that has taken place over the past several years with no sign of a slowdown ahead. Various factors have allowed for the projects to take...
The Hindu Business Line  Aug 21  Comment 
Remembering the distinguished economist NA Mujumdar, who was a trenchant critic of India’s post-1991 policies
OilVoice  Aug 20  Comment 
Legend Oil and Gas Ltd. OTC Markets LOGL announce that Legend and National Bank of Canada quotNBCquot have signed a mutual release and settlement agreement the quotAgreementquot. NBC is
Market Intelligence Center  Aug 13  Comment 
Google Inc (GOOG) is a good candidate for a covered call at the $595.00 level. The Oct. '14 call at that price should fetch a credit of about $10.40, which means the entire position has a net debit of about $552.33. This trade has -0.38% downside...
Bulk Transporter  Aug 6  Comment 
FTR has released preliminary data showing July 2014 North American Class 8 truck net orders at 29,516 units, a tremendous 71% year-over-year increase and the second best July ever. Class 8 orders have now had 18 consecutive months with...
Cloud Computing  Jul 30  Comment 
CGI (TSX: GIB.A)(NYSE: GIB) is pleased to announce the successful "go live" implementation of its CGI Trade360® platform within National Bank of Canada. The Bank wanted to replace its legacy trade applications with a single, integrated and modern...
SeekingAlpha  Jul 21  Comment 
By Livio Filice: Most investors are familiar with Canadian banking giants, such as The Bank of Nova Scotia (NYSE:BNS) and Toronto-Dominion Bank (NYSE:TD), but the National Bank of Canada (OTCMKTS:OTCPK:NTIOF) generally flies under the radar....




 
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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