(Adds tax expense, other details)
March 1 (Reuters) - National Bank of Canada reported a 5% decline in quarterly profit on Wednesday, as the
lender set aside bigger rainy-day funds to deal with economic
uncertainty, which outweighed gains stemming from higher
interest rates.
Profit for the three months ended Jan. 31 was C$881 million
($647.94 million) or C$2.49 per share, compared with C$930
million or C$2.64 per share a year earlier.
Surging inflation has squeezed consumers' financial
strength, prompting banks to increase provisions in case of
delays or defaults in loan repayments by borrowers.
The bank reported C$86 million in provisions for credit
losses (PCLs) for the quarter. In the same quarter last year, it
had released C$2 million of those provisions.
In January, the Bank of Canada hiked its key interest rate
to the highest level in 15 years, but said it would hold off on
further increases as long as prices eased as expected.
Still, uncertainty persists as the central bank has not
ruled out further hikes, stating that the economy is still
overheated.
National Bank also reported a C$32 million tax expense tied
to the Canada Recovery Dividend, a one-time tax imposed on some
of the country's biggest financial firms.
Separately, the lender said its former Chief Financial
Officer Ghislain Parent, who is currently the executive vice
president of its international operations, will retire in
October.
($1 = 1.3594 Canadian dollars)
(Reporting by Niket Nishant in Bengaluru; editing by Uttaresh
Venkateshwaran)
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