Investors cautiously welcomed National Bank’s quarterly performance on Wednesday, even though earnings per share exceeded expectations.

While the macroeconomic outlook continues to raise questions, the quarterly profits of the largest bank in Quebec fell by 5% to 847 million during the months of February, March and April. Profits had reached 889 million in the same period last year.

Earnings per share for the quarter were $2.38 per share, which compares favorably to the $2.36 per share expected by analysts.

As expected, the bank raised its quarterly dividend by 5% to $1.02 per share.

The bank’s management maintains that the “good performance of all operating segments attributable to revenue growth was offset by higher provisions for credit losses, resulting in part from a deterioration in the 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 – that is, funds set aside to cover loans that may not be repaid – amounted to 85 million, a level well below what experts had expected. The latter predicted 110 million.

“That’s abnormally low,” commented analyst Mike Rizvanovic, of Keefe, Bruyette

For this reason, this expert considers the bank’s results to be of “lower quality” and anticipated some pressure on the stock market.

National Bank shares fell 2.8% on Wednesday to close at $97.32 on the Toronto Stock Exchange.

Mike Rizvanovic pointed out that the fact that the title of the National Bank benefited from a favorable evaluation for a while on the markets foreshadowed a cautious reaction on the part of investors in the current context.

His colleague Meny Grauman, of Scotia, adds that the National Bank and the Royal Bank are the only major Canadian banks benefiting from stock market valuation premiums.

“The relative valuation of National’s stock is an important factor in judging investor reaction to decidedly mixed results,” he says.

Despite some bright spots, including earnings per share, improved loan loss forecasts, and a higher-than-expected equity ratio, Meny Grauman notes several negatives that may have affected investor sentiment.

Those negatives, he says, include some pressure on net margins, and lower-than-expected — and falling — profits both at wholly-owned Asian bank ABA and at Credigy, the U.S. subsidiary. financing of assets belonging to the National Bank.

“Our defensive positioning, with high levels of capital and liquidity and prudent levels of provisions for credit losses, will continue to support our profitable growth and help us through any period of uncertainty,” commented the CEO of the company. bank, Laurent Ferreira while describing the current environment as “difficult”.

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