National Bank’s profitability for the months of February, March and April declined, but nevertheless turned out to be better than expected despite the deterioration in the macroeconomic outlook.

Quarterly profits for Quebec’s largest bank fell 5% to $847 million from $889 million a year ago.

Earnings per share for the second quarter of fiscal year 2023 thus amount to $2.38 per share. Analysts were expecting $2.36 per share.

The bank’s quarterly dividend is also raised by 5% to $1.02 per share. This decision pushes the dividend yield to more than 4%.

The bank’s management noted that “good performance across all business segments driven by revenue growth was offset by higher provisions for credit losses, resulting in part from a deteriorating macroeconomic outlook, as well as than by the impact on the tax expense of the Government of Canada’s 2022 tax measures”.

Provisions for credit losses for the quarter were $85 million, well below analysts’ forecasts. The latter predicted 110 million.

“It’s abnormally low,” notes analyst Mike Rizvanovic, of the firm Keefe, Bruyette

For this reason, this expert considers the bank’s results to be of “lower quality”. He therefore expects the National Bank’s stock to underperform that of its peers on Wednesday since it has benefited from a favorable valuation for a while now on the markets.

National Bank is the last of the six major Canadian banks to release its financial results this spring.