National Bank posts strong home mortgage growth,

MONTREAL — National Bank of Canada has been growing its home mortgages business with the help of more specialists and by working with brokers, but it hasn’t lowered its underwriting standards to achieve the growth, the bank said Friday.

MONTREAL — National Bank of Canada has been growing its home mortgages business with the help of more specialists and by working with brokers, but it hasn’t lowered its underwriting standards to achieve the growth, the bank said Friday.

Canada’s sixth-largest bank said it has increased the number of mortgage development officers doing business with real estate agents and mortgage brokers.

“The good growth we’ve had is not coming from lower underwriting standards,” chief executive Louis Vachon said, a day after National Bank posted a first-quarter profit of $332 million, up from $322 million a year ago.

“It comes from a significant shift that you’ve seen in Ontario for a while and is now developing in Quebec,” Vachon said during a conference call.

Vachon made the comment after an analyst noted the National Bank (TSX:NA) had 13 per cent loan growth in personal lending and mortgages, outpacing the industry.

“We’ve been a little bit more receptive to mortgage brokers than compared to some of our competitors who have, frankly, been a little bit more ambivalent about doing business with mortgage brokers,” Vachon said.

Rejean Levesque, executive vice-president of personal and commercial banking, said while growth was “pretty strong” in mortgages he expects it to slow to the mid-to-single digits in the second and third quarters.

Levesque said that outside Quebec as much as 45 per cent of mortgages come from the brokerage business and the bank is doing a better job of tapping into that.

“We have increased the number of mortgage development officers doing business with real estate agents, but it also came from the broker side of the brokerage business.”

Patricia Curadeau-Grou, responsible for the bank’s risk management, said the bank has added 60 mortgage specialists and doesn’t anticipate any problems going forward with working with mortgage brokers.

“We’re fairly comfortable with the type of business they’re bringing in and we haven’t changed the underwriting criteria.”

Mortgage brokers represent home buyers in getting a competitive interest rate among a variety of financial institutions.

In its financial results released late Thursday, National Bank said its profit amounted to $1.99 per diluted share for the quarter ended Jan. 31 up from $1.86 a year ago. Revenue totalled $1.24 billion, up from $1.16 billion.

Excluding one-time items, the bank said it earned $334 million or $2 per diluted share, up from $322 million or $1.86 per share a year ago.

The average analyst estimate had been for a profit of $1.82 per share on $1.15 billion in revenue, according to those polled by Thomson Reuters.

RBC Capital markets analyst Andre-Philippe Hardy said he continues to expect that shareholders will profit from the bank’s growth through higher dividends.

“We continue to expect the bank’s shareholders to benefit from improvements in relative revenue growth in its domestic retail business relative to the 2007—2010 period and from disciplined capital management, with higher dividends likely,” Hardy wrote in a research note.

Hardy said his 12-month price target is up $2 to $87 based on higher excess capital and the sale of Natcan Investment Management to Fiera Sceptre.

Last week, National Bank signed a deal to sell its asset management business to Fiera Sceptre Inc. (TSX:FSZ) in a $309.5-million agreement that will see it take a large stake in the business.

National Bank will swap Natcan Investment Management Inc. for a 35 per cent stake in Fiera, a Montreal-based independent investment firm.

Shares in National Bank were up 81 cents, or just more than one per cent, at $78.29 in afternoon trading on the Toronto Stock Exchange.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

If you're heading out to the West Country have a plan in case things go wrong, says Clearwater Regional Fire Rescue Services fire chief Steve Debienne.
(Photo from CRFRS Facebook)
West Country visitors should have an emergency plan: regional fire chief

Cellphones can’t be relied on in many back country areas

Rode
Sarcevic leads an impressive list of additions to RDC Kings soccer

In 2019 the RDC Kings soccer program took a major step forward… Continue reading

The Red Deer PCN Women's Fun Run will take on a different look this weekend with rising COVID-19 numbers.
Women’s Fun Run goes ahead this weekend in Red Deer

With new public health measures in place because of rising COVID-19 case… Continue reading

Alberta’s chief medical officer of health Dr. Deena Hinshaw asked Albertans to limit travel throughout the province as COVID-19 cases continue to rise. (Photo by Chris Schwarz/Government of Alberta)
Red Deer nears 900 active COVID-19 cases

Province reports additional 2,211 COVID-19 cases

David Eggen, the NDP’s advanced education critic, said the UCP government has been focused on cutting funding to post-secondary institutions across Alberta. (Contributed photo)
NDP worry new status for Red Deer College doesn’t mean more funding

This week the province announced that RDC will become a polytechnic institute

Alberta Health Services locked the Whistle Stop Cafe in Mirror on Wednesday morning after owner Christopher Scott refused to comply with health orders. (Photo by Paul Cowley/Advocate staff)
UPDATED: AHS shuts down Whistle Stop Cafe for defying health orders

Justice minister promises to get tough with those ignoring public health orders

People line up outside an immunization clinic to get their Oxford-AstraZeneca COVID-19 vaccine in Edmonton, Tuesday, April 20, 2021. THE CANADIAN PRESS/Jason Franson
Family looking for answers: Woman with vaccine side-effects died of blood clot

Family looking for answers: Woman with vaccine side-effects died of blood clot

‘Uniquely reprehensible’: No parole for 35 years for Calgary man in triple murder

‘Uniquely reprehensible’: No parole for 35 years for Calgary man in triple murder

A sign is seen at a walk-in COVID-19 in Montreal on Wednesday, April 21, 2021. THE CANADIAN PRESS/Paul Chiasson
NACI chair says advice not meant to give AstraZeneca recipients vaccine remorse

NACI chair says advice not meant to give AstraZeneca recipients vaccine remorse

People in Peel region line up outside the University of Toronto Mississauga campus for the COVID-19 vaccination clinic in Mississauga, Ont., on Thursday, May 6, 2020. THE CANADIAN PRESS/Tijana Martin
Promising pandemic signs in Ontario, Quebec as urgency shifts to N.S., Alberta

Promising pandemic signs in Ontario, Quebec as urgency shifts to N.S., Alberta

U.S. Secretary of State Antony Blinken waves upon departure from Boryspil International airport outside Kyiv, Ukraine, Thursday, May 6, 2021. U.S. Secretary of State Antony Blinken has met with top Ukrainian officials in Kyiv and reaffirmed Washington's support for the country in the wake of heightened tensions with Russia. (AP Photo/Efrem Lukatsky, Pool)
US says fate of nuclear pact up to Iran as talks resume

US says fate of nuclear pact up to Iran as talks resume

People embrace after a school shooting at Rigby Middle School in Rigby, Idaho on Thursday, May 6, 2021. Authorities say a shooting at the eastern Idaho middle school has injured two students and a custodian, and a male student has been taken into custody. (John Roark /The Idaho Post-Register via AP)
Sheriff: Girl shoots 3 at Idaho school; teacher disarms her

Sheriff: Girl shoots 3 at Idaho school; teacher disarms her

The Cineplex Odeon Theatre at Yonge and Eglinton in Toronto is shown on December 16, 2019.THE CANADIAN PRESS/Aaron Vincent Elkaim
Cineplex hopes for brighter summer blockbuster season as it reports quarterly loss

Cineplex hopes for brighter summer blockbuster season as it reports quarterly loss

FILE - David Oyelowo posing for a portrait in New York on April 8, 2019. Oyelowo makes his directorial debut in “The Water Man," which arrives in theaters Friday. (Photo by Taylor Jewell/Invision/AP, File)
David Oyelowo fulfills new directing passion in ‘Water Man’

David Oyelowo fulfills new directing passion in ‘Water Man’

Most Read