The financial information reported in this document is based on the unaudited interim condensed consolidated financial statements for the quarter and six-month period ended April 30, 2024 and is prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), unless otherwise indicated. IFRS represent Canadian generally accepted accounting principles (GAAP). All amounts are presented in Canadian dollars. MONTREAL, May 29, 2024 /CNW/ - For the second quarter of 2024, National Bank is reporting net income of $906 million, up 9% from $832 million in the second quarter of 2023. Second-quarter diluted earnings per share stood at $2.54 compared to $2.34 in the second quarter of 2023. These increases were driven by total revenue growth in all of the business segments, partly offset by higher non-interest expenses and higher provisions for credit losses.  For the six-month period ended April 30, 2024, the Bank's net income totalled $1,828 million, up 7% from $1,708 million in the same period of 2023. First-half diluted earnings per share stood at $5.13 compared to $4.81 in the first half of 2023. These increases were driven by good performance, owing to revenue growth, in all of the business segments, partly offset by higher non-interest expenses, higher provisions for credit losses, and the impact of the Canadian government's 2022 tax measures recorded in the first half of 2023. Excluding the impact of these measures, first-half adjusted net income(1) totalled $1,828 million, up 6% from $1,732 million in first-half 2023, while first-half adjusted diluted earnings per share(1) stood at $5.13, up 5% from $4.88 in first-half 2023.  "National Bank generated strong financial results for the second quarter of 2024, reflecting the disciplined execution of our strategy across business segments and the diversified earnings power of the Bank," said Laurent Ferreira, President and Chief Executive Officer of National Bank of Canada. "In what remains an uncertain macroeconomic environment, we are committed to maintaining our prudent approach to capital, credit, and costs and to generating long-term value for our shareholders." Highlights (millions of Canadian dollars) Quarter ended April 30 Six months ended April 30 2024 2023(2) % Change 2024 2023(2) % Change Net income 906 832 9 1,828 1,708 7 Diluted earnings per share (dollars) $ 2.54 $ 2.34 9 $ 5.13 $ 4.81 7 Income before provisions for credit losses and income taxes 1,278 1,084 18 2,539 2,256 13 Return on common shareholders' equity(3) 16.9 % 17.2 % 17.0 % 17.5 % Dividend payout ratio(3) 43.2 % 40.5 % 43.2 % 40.5 % Operating results – Adjusted(1) Net income – Adjusted 906 832 9 1,828 1,732 6 Diluted earnings per share – Adjusted (dollars) $ 2.54 $ 2.34 9 $ 5.13 $ 4.88 5 Income before provisions for credit losses and income taxes – Adjusted 1,365 1,216 12 2,736 2,518 9 As at April 30,  2024 As at October 31, 2023 CET1 capital ratio under Basel III(4) 13.2 % 13.5 % Leverage ratio under Basel III(4) 4.4 % 4.4 % (1) See the Financial Reporting Method section on pages 3 to 6 for additional information on non-GAAP financial measures. (2) Certain amounts have been adjusted to reflect accounting policy changes arising from the adoption of IFRS 17. For additional information, see Note 2 to the unaudited interim condensed consolidated financial statements in the Report to Shareholders – Second Quarter 2024, which is available on the Bank's website at nbc.ca or the SEDAR+ website at sedarplus.ca. (3) For details on the composition of these measures, see the Glossary section on pages 47 to 50 in the Report to Shareholders – Second Quarter 2024, which is available on the Bank's website at nbc.ca or the SEDAR+ website at sedarplus.ca.  (4) For additional information on capital management measures, see the Financial Reporting Method section on pages 4 to 10 in the Report to Shareholders – Second Quarter 2024, which is available on the Bank's website at nbc.ca or the SEDAR+ website at sedarplus.ca. Personal and Commercial Net income totalled $311 million in the second quarter of 2024 versus $320 million in the second quarter of 2023, a 3% decrease that was mainly due to higher provisions for credit losses. Income before provisions for credit losses and income taxes totalled $519 million in the second quarter of 2024, up 9% from $478 million in the second quarter of 2023. At $1,131 million, second-quarter total revenues rose $64 million or 6% year over year, mainly due to an increase in net interest income (driven by growth in loan and deposit volumes) and to a higher net interest margin. Compared to a year ago, personal lending grew 3% and commercial lending grew 12%. The net interest margin(1) stood at 2.36% in the second quarter of 2024, up from 2.34% in the second quarter of 2023. Second-quarter non-interest expenses stood at $612 million, up 4% from the second quarter of 2023. Second-quarter provisions for credit losses rose $52 million year over year, mainly due to higher provisions for credit losses on impaired loans. At 54.1%, the second-quarter efficiency ratio(1) improved from 55.2% in the second quarter of 2023. Wealth Management Net income totalled $205 million in the second quarter of 2024, a 15% increase from $178 million in the second quarter of 2023. Second-quarter total revenues amounted to $683 million compared to $617 million in second-quarter 2023, a $66 million or 11% increase driven mostly by growth in fee-based revenues. Second-quarter non-interest expenses stood at $400 million versus $372 million in second-quarter 2023, an 8% increase associated with the revenue growth. At 58.6%, the second-quarter efficiency ratio(1) improved from 60.3% in the second quarter of 2023. Financial Markets Net income totalled $322 million in the second quarter of 2024, up 20% from $268 million in the second quarter of 2023. Second-quarter total revenues on a taxable equivalent basis amounted to $766 million, up $94 million or 14% given increases in global markets revenues and in revenues from corporate and investment banking services. Second-quarter non-interest expenses stood at $312 million compared to $283 million in second-quarter 2023, an increase that was partly due to compensation and employee benefits as well as to the segment's technological investments. Second-quarter provisions for credit losses stood at $11 million, down $8 million year over year. At 40.7%, the efficiency ratio(1) on a taxable equivalent basis improved from 42.1% in the second quarter of 2023. U.S. Specialty Finance and International Net income totalled $163 million in the second quarter of 2024, up 27% from $128 million in the second quarter of 2023. Second-quarter total revenues amounted to $350 million, a 23% year-over-year increase driven by revenue growth at both the Credigy and ABA Bank subsidiaries. Second-quarter non-interest expenses stood at $108 million, a 10% year-over-year increase attributable mainly to business growth at ABA Bank. Second-quarter provisions for credit losses were up $11 million year over year, with the increase being attributable to both Credigy and ABA Bank. At 30.9%, the efficiency ratio(1) improved from 34.4% in the second quarter of 2023. Other Net loss stood at $95 million in the second quarter of 2024 versus a $62 million net loss in the second quarter of 2023 due to a lower contribution from Treasury activities and to higher non-interest expenses. Capital Management As at April 30, 2024, the Common Equity Tier 1 (CET1) capital ratio under Basel III(2) stood at 13.2%, down from 13.5% as at October 31, 2023, notably due to a negative impact of implementing the revised market risk and credit valuation adjustment (CVA) risk frameworks. As at April 30, 2024, the Basel III(2) leverage ratio was 4.4%, stable compared to October 31, 2023. Dividends On May 28, 2024, the Board of Directors declared regular dividends on the various series of first preferred shares and a dividend of $1.10 per common share, up 4 cents or 4%, payable on August 1, 2024 to shareholders of record on June 24, 2024. (1) For details on the composition of these measures, see the Glossary section on pages 47 to 50 in the Report to Shareholders – Second Quarter 2024, which is available on the Bank's website at nbc.ca or the SEDAR+ website at sedarplus.ca. (2) For additional information on capital management measures, see the Financial Reporting Method section on pages 4 to 10 in the Report to Shareholders – Second Quarter 2024, which is available on the Bank's website at nbc.ca or the SEDAR+ website at sedarplus.ca.  Financial Reporting Method  The Bank's consolidated financial statements are prepared in accordance with IFRS, as issued by the IASB. The financial statements also comply with section 308(4) of the Bank Act (Canada), which states that, except as otherwise specified by the Office of the Superintendent of Financial Institutions (Canada) (OSFI), the consolidated financial statements are to be prepared in accordance with IFRS, which represent Canadian GAAP. None of the OSFI accounting requirements are exceptions to IFRS. The presentation of segment disclosures is consistent with the presentation adopted by the Bank for the fiscal year beginning November 1, 2023. This presentation reflects the retrospective application of accounting policy changes arising from the adoption of IFRS 17– Insurance Contracts (IFRS 17). For additional information, see Note 2 to the consolidated financial statements. The figures for the 2023 quarters have been adjusted to reflect these accounting policy changes. Non-GAAP and Other Financial Measures The Bank uses a number of financial measures when assessing its results and measuring overall performance. Some of these financial measures are not calculated in accordance with GAAP. Regulation 52-112 Respecting Non-GAAP and Other Financial Measures Disclosure (Regulation 52-112) prescribes disclosure requirements that apply to the following measures used by the Bank: non-GAAP financial measures; non-GAAP ratios; supplementary financial measures; capital management measures. Non-GAAP Financial MeasuresThe Bank uses non-GAAP financial measures that do not have standardized meanings under GAAP and that therefore may not be comparable to similar measures used by other companies. Presenting non-GAAP financial measures helps readers to better understand how management analyzes results, shows the impacts of specified items on the results of the reported periods, and allows readers to better assess results without the specified items if they consider such items not to be reflective of the underlying performance of the Bank's operations. In addition, the Bank uses the taxable equivalent basis to calculate net interest income, non-interest income, and income taxes. This calculation method consists of grossing up certain revenues taxed at lower rates (notably dividends) by the income tax to a level that would make it comparable to revenues from taxable sources in Canada. An equivalent amount is added to income taxes. This adjustment is necessary in order to perform a uniform comparison of the return on different assets, regardless of their tax treatment. However, in light of the proposed legislation with respect to Canadian dividends, the Bank did not either recognize an income tax deduction or use the taxable equivalent basis method to adjust revenues related to affected dividends received after January 1, 2024 (for additional information see the Income Taxes – Proposed Legislation section in the Report to shareholders for the second quarter of 2024, which is available on the Bank's website at nbc.ca or the SEDAR+ website at sedarplus.ca).  The key non-GAAP financial measures used by the Bank to analyze its results are described below, and a quantitative reconciliation of these measures is presented in the tables in the Reconciliation of Non-GAAP Financial Measures section on pages 4 to 6. Note that no specified items have been excluded from results for the quarter and six-month period ended April 30, 2024. In the first six-month period of 2023, a $24 million tax expense related to the Canadian government's 2022 tax measures had been excluded from results given the one-time nature of the item. This amount had included a $32 million tax expense with respect to the Canada Recovery Dividend, i.e., a one-time, 15% tax on the fiscal 2021 and 2020 average taxable income above $1 billion as well as an $8 million tax recovery related to the 1.5% increase in the statutory tax rate, which included the impact related to current and deferred taxes for fiscal 2022. For additional information on non-GAAP financial measures, non-GAAP ratios, supplementary financial measures, and capital management measures, see the Financial Reporting Method section and the Glossary section, on pages 4 to 10 and 47 to 50, respectively, in the Report to shareholders for the second quarter of 2024, which is available on the Bank's website at nbc.ca or the SEDAR+ website at sedarplus.ca. Reconciliation of Non-GAAP Financial Measures Presentation of Results – Adjusted (millions of Canadian dollars) Quarter ended April 30 2024 2023(1) Personal and Commercial Wealth Management Financial Markets USSF&I Other Total Total Operating results Net interest income 870 203 (659) 318 (97) 635 882 Non-interest income 261 480 1,425 32 (83) 2,115 1,564 Total revenues 1,131 683 766 350 (180) 2,750 2,446 Non-interest expenses 612 400 312 108 40 1,472 1,362 Income before provisions for credit losses and income taxes 519 283 454 242 (220) 1,278 1,084 Provisions for credit losses 89 − 11 37 1 138 85 Income before income taxes (recovery) 430 283 443 205 (221) 1,140 999 Income taxes (recovery) 119 78 121 42 (126) 234 167 Net income 311 205 322 163 (95) 906 832 Non-controlling interests − − − − (1) (1) (1) Net income attributable to the Bank's shareholders and   holders of other equity instruments 311 205 322 163 (94) 907 833 Dividends on preferred shares and distributions on limited recourse   capital notes 37 35 Net income attributable to common shareholders 870 798 Items that have an impact on results Net interest income Taxable equivalent(2) − − − − 14 14 76 Impact on net interest income − − −