The Daily Chase: Bank earnings season continues as National, BMO hike dividends

Here are five things you need to know this morning.

National Bank beats on earnings, raises payout: Canada’s sixth-largest lender posted quarterly results before markets opened this morning, and the numbers beat on most metrics. National Bank said its adjusted earnings came in at $2.54 per share. That was better than the $2.41 analysts were expecting. Adjusted revenue came in at $2.84 billion for the quarter, better than the $2.74 billion expected. Most units saw profits increase, enough that the bank saw fit to raise its dividend by four cents per share to $1.10. There was one troubling negative number, however, as the bank raised its provisions for credit losses — the amount it sets aside to cover loans it thinks may go bad — to $138 million.

BMO provisions increase too: That trend was in play at Bank of Montreal, too, which also posted quarterly results before markets opened this morning. BMO set aside $705 million to cover such loans in the three months up until the end of April. That was far more than the $585 million analysts were anticipating. More money going into loan-loss provisions was a major reason why the bank’s adjusted earnings came in lower than anticipated during the quarter, at $2.59 a share instead of the $2.77 forecast. All four of Canada’s big banks that have revealed quarterly results so far have shown an uptick in bad loans. RBC and CIBC are up next.

Oil hits US$80 on Middle East tension: The price of a barrel of the North American oil benchmark known as West Texas Intermediate topped US$80 yesterday, as another attack on a ship in the Red Sea ratchets up tensions in the seemingly always-volatile region. A ship was hit by missiles for a second time while sailing through the Red Sea yesterday, sending the price of WTI and European Brent crude higher. The direction of the oil price seems to be pushed and pulled by two factors right now, as tensions in the Middle East push up valuations on perceived scarcity, even as supply from non-OPEC countries continues to be abundant.