The National Bank of Canada logo is seen outside a branch in Ottawa, Ontario, Canada, February 14, 2019. REUTERS/Chris Wattie/File Photo Acquire License Rights
Dec 1 (Reuters) – National Bank of Canada (NA.TO) reported a rise in fourth-quarter profit on Friday, as a strong performance from its capital markets division helped offset the impact of higher provisions.
The uncertain economic outlook has prompted lenders to build emergency funds to prepare for potential loan defaults.
The Montreal-based bank's provisions for loan losses rose to C$115 million from C$87 million a year ago.
Funding costs for banks have also risen as they pay higher interest rates on deposits to discourage customers from switching to higher-yielding products such as money market funds.
NBC's adjusted net interest income, the difference between banks' income from loans and payouts from deposits, fell about 35.1% to C$825 million.
However, the financial markets segment reported adjusted net income of C$289 million, up 42%, reflecting strength in capital markets and global markets operations.
The bank's adjusted net income rose to C$867 million ($641.13 million), or C$2.44 per share, in the three months ended Oct. 31, from C$738 million, or C$2.08 per share last year.
($1 = 1.3523 Canadian dollars)
Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Shilpi Majumdar
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