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National Bank of Canada hikes dividend on strong 4th quarter profits

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National Bank of Canada hiked its dividend as it reported fourth-quarter net income of $566 million, up eight per cent from the previous year, as each of its three main business units improved earnings.

The Montreal-based bank’s profit during the three months ended Oct. 31 amounted to $1.52 per share on a diluted basis and $1.53 per share after adjustments.

Analysts had estimated $1.52 per share of net income and $1.52 per share of adjusted earnings, according to Thomson Reuters Eikon.

Revenue for the three months ended Oct. 31 was $1.87 billion, slightly above analyst estimates.

During the same period of fiscal 2017, National Bank had $525 million of net income or $1.39 per share and $1.76 billion of revenue.

The bank also said its quarterly dividend will rise three cents to 65 cents per common share, payable Feb. 1.

Boosts from personal and commercial divisions

National Bank’s fourth-quarter results were fuelled by a 10 per cent year-over-year increase in net income from its personal and commercial banking division, totalling $257 million.

The bank’s wealth management division posted net income of $124 million during the fourth quarter, up 14 per cent from the same period a year earlier. Its financial markets segment reported net income of $192 million during the quarter, up from $183 million in 2017.

For the full financial 2018 year, the Montreal-based bank reported net income of $2.23 billion, up 10 per cent from the same 12-month period ended Oct. 31 in 2017.

The company’s president and chief executive officer said in a statement “2018 ended with record net income of over $2.2 billion driven by strong performance across all business lines and an improved efficiency ratio.”

National Bank’s latest quarter was in line with expectations as strength in capital markets offset seasonally-elevated expenses, said Robert Sedran, an analyst with CIBC Capital Markets.

“A good result with each of the operating segments showing consistent trends,” he said in a note to clients.

Laurentian income down

Laurentian Bank of Canada did not fare as well. Fourth-quarter net income dropped by 13 per cent from the previous year to $50.8 million, on lower revenues and loan volumes, and missed analyst estimates.

The Montreal-based company’s net income amounted to $1.13 per diluted share during the three months ended Oct. 31, down from $1.42 during the same period a year ago.

Analysts had expected earnings of $1.26 per share, according to Thomson Reuters Eikon.

Laurentian Bank president and CEO Francois Desjardins is seen prior to the shareholders meeting April 10, 2018, in Montreal. While the company reported lower 4th-quarter income Wednesday, Desjardins said that in part reflects changes over the past year that position the bank well, including the sale last year of Verico Financial Group. (Paul Chiasson/Canadian Press)

On an adjusted basis, the Montreal-based bank reported net income of $54.3 million, down 18 per cent from $66.5 million.

Other factors weighing on Laurentian’s results include a $5.9 million gain on the sale of its investment in Verico Financial Group during the same quarter one year ago, as well as an increase in provisions for credit losses or money set aside for bad loans.

For the full 2018 financial year, Laurentian reported net income of $224.6 million, up nine per cent from $206.5 million during 2017.

“Our 2018 results reflect our actions to strengthen the Group’s financial foundation, including maintaining healthy liquidity levels and our investments in people, processes and technology,” said Laurentian’s president and chief executive officer Francois Desjardins in a statement. “This positions us well to deliver our strategic objectives.”

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Real Estate

7 Tips For First-Time Home Buyers In Calgary

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Buying a house for the first time can be overwhelming to say the least. If you’re wondering what neighbourhood to go with, what you can afford, or even how to just get started on the process, let us take some stress off your hands! We’ve teamed up with Hopewell Residential to give you 7 tips to ensure the home you end up with is everything you dreamed of.

Hopewell Residential is a five-time Developer of the Year award winner, so their expertise is second-to-none in Calgary and beyond. Who better to learn home-buying tips from than the homebuilders themselves?

Create a checklist of needs & wants

This is a biggie. When you’re buying your very first home, you’ll want to weigh your needs vs. your wants. Ensuring you have what you love in your first home is a big, big deal.

What should you do? Easy. Set up a list of needs and a list of wants, but be pretty strict with yourself, and make sure you take your lifestyle into consideration. With the increase in remote work over the past year, it’s important to keep in mind that a home office or flex room might just be the key to maximizing at home happiness. Especially if you’re thinking you might be expanding your family later on, spare rooms and extra space is key (but more on that later!).

Or for instance, you might need a home in an area with a high walkability score, but you want to be close to certain amenities. Set yourself up with the right level of compromise and the number of homes that actually fit your ‘perfect’ idea will skyrocket.

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‘Don’t give up’: Ottawa Valley realtors share statistics, tips for homebuyers in ‘extreme’ sellers market

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The real estate market in the Ottawa Valley can be summed up this way: people from far and wide are in a buying frenzy, but there’s hardly anything to buy at the “store,” and the limited inventory is overpriced.

This “stampede” — as one realtor described it — will affect rural towns as residents grapple with finding affordable housing and agonize over their inability to purchase homes in their price range.

“We are seeing a lack of inventory in all price ranges,” said Laura Keller, a real estate agent from Carleton Place.

Helen Vincent, a Renfrew realtor, said she’s never seen a market like this in her 36 years of practice. “We postpone offers for four to five days in order to get all the buyers,” she said.

Multiple offers — between seven and 10 — became the norm, with cash offers and no conditions, as buyers faced bidding wars. “In Ottawa, they have up to 50 (offers),” she added.

“It’s very stressful. You’re going to get nine (people) ticked off, and one happy. So many people are disappointed,” Vincent said.

Terry Stavenow, an Arnprior realtor for 40 years, said that “the pent-up need took over with inventory going low. It made a stampede on everything that was available.“

“Brand new housing — it’s very much gone. Several building developers are rushing to get inventory. They usually don’t do construction in the winter months,” said Stavenow.

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10 Tips For First-Time Home Buyers

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Buying a home for the first time is exciting and a commitment to the future. It’s often challenging, too, and the process requires a lot of steps, many of which can be tricky to navigate as a first-time home buyer.

What are some things you should keep in mind as a first-time home buyer?

First-Time Home Buyer Tips

Here are 10 tips to keep in mind as you begin your journey toward homeownership.

1. Have Your Finances in Order

It’s wise to begin saving as early as possible once you’ve made the decision to purchase a house. You’ll need to consider the down payment, closing costs (which often range from 2% to 5% of the down payment), as well as move-in expenses.

You also need to understand the other costs of homeownership, such as mortgage insurance. property taxes, utilities, homeowner’s insurance, and more.

2. How Much Can You Afford?

Knowing how much you can realistically afford in a home is another important financial consideration. Look for the home of your dreams that fits your budget.

One way to avoid future financial stress is to set a price range for your home that fits your budget, and then staying within that range. Going through the preapproval process will help you understand what price range is realistic for your budget.

3. Make Sure Your Credit is Good

Another thing to keep in mind as a first-time home buyer is your credit score because it determines whether you qualify for a mortgage and affects the interest rate that lenders offer. 

You can check your credit score from the three credit bureaus – Experian, Equifax, and TransUnion.

This is another good reason for getting preapproved before you start your search. Learn more about the preapproval process and your credit score.

4. Choose The Right Real Estate Agent

A good real estate agent guides you through the process every step of the way. He or she will help you find a home that fits your needs, help you through the financial processes, and help ease any first-time buyer anxiety you may have.

Interview several agents and request references.

5. Research Mortgage Options

A variety of mortgages are available, including conventional mortgages – which are guaranteed by the government – FHA loans, USDA loans, and VA loans (for veterans).

You’ll also have options regarding the mortgage term. A 30-year fixed-rate mortgage is popular among many homebuyers and has an interest rate that doesn’t change over the course of the loan. A 15-year loan usually has a lower interest rate but monthly payments are larger.

6. Talk to Multiple Lenders

It’s worth your time to talk to several lenders and banks before you accept a mortgage offer. The more you shop around, the better deal you’re liable to get – and it may save you thousands of dollars.

7. Get Preapproved First

Getting a mortgage preapproval (in the form of a letter) before you begin hunting for homes is something else to put on your checklist. A lender’s preapproval letter states exactly how much loan money you can get.

Learn more about the preapproval process and how preapproval provides you with a significant competitive advantage in our article How Preapproval Gives You Home Buying Power.

8. Pick the Right House and Neighborhood

Make sure to weigh the pros and cons of the different types of homes based on your budget, lifestyle, etc. Would a condominium or townhome fit your needs better than a house? What type of neighborhood appeals to you?

9. List Your Needs and Must-Haves

The home you purchase should have as many of the features you prefer as possible. List your needs in order of priority; some things may be non-negotiable to you personally.

10. Hire an Inspector

Hiring an inspector is another crucial step in the home buying process. An inspector will tell you about existing or potential problems with the home, and also what’s in good order. You can learn more about home inspections and how to find a home inspector through the American Society of Home Inspectors website.

Buying a home for the first time is a challenge, but it’s one you can handle with the right planning and preparation.

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