National Bank of Canada has reported a net income of C$210m for the second quarter of fiscal 2016, down 48% from C$404m in the year-ago quarter.
According to the bank, the drop in income was driven by a sectoral provision for credit losses recorded for producers and service companies in the oil and gas sector.
Diluted earnings per share were $0.52 compared to $1.13 a year ago.
The bank’s personal and commercial banking arm registered a net loss of C$9m in the second quarter of fiscal 2016 compared to a net income of C$164m in the corresponding quarter of 2015, due to sectoral provision for credit losses recorded for producers and service companies in the oil and gas sector .
Excluding the sectoral provision of C$183m, net of income taxes, the unit’s net income increased 6% year-on-year to C$174m.
The division’s total revenues increased 2% to C$698m in the second quarter compared to the prior corresponding period.
Personal lending increased 6% from the prior year, with the most significant increases recorded in mortgage lending.
The unit’s efficiency ratio stood at 56.6%, compared to 59% in the second quarter of fiscal 2015.
National Bank president and CEO Louis Vachon said: "In the second quarter of 2016, the Bank continued to benefit from good growth in personal and commercial loan and deposit volumes and maintained tight cost control.
"In addition, the Bank took action, by way of a sectoral provision, to address credit uncertainties in its oil and gas producer and service company loan portfolio. The credit quality of the overall loan portfolio, excluding the oil and gas producer and service company loan portfolio, remains within expectations."