National Bank of Canada’s (NA) fiscal second-quarter profit has declined 5% to $847 million as the lender set aside more money to cover potentially bad loans.
National Bank reported net income for the three months ended April 30 of $847 million or $2.38 per share, down from $889 million or $2.53 a share a year earlier.
Following the collapse of several lenders in the U.S. and Europe, National Bank of Canada said it set aside $85 million in loan loss provisions during fiscal Q2, up more than 2,700% from $3 million a year ago.
Montreal-based National Bank said it also increased its loan loss provisions as the prospect of an economic recession could lead to more Canadians defaulting on their loans.
Canada’s other major lenders have reported lower profits amid higher loan loss provisions in recent weeks.
Banks in Canada have also been grappling with higher costs for labour and the need to make investments in new technologies.
National Bank of Canada’s stock is up 3% over the past 12 months and currently trading at $100.12 per share.
