National Bank Announces a Sectoral Provision for Credit Losses on the Oil and Gas Producers and Services Loan Portfolio in the Second Quarter 2016

MONTREAL, May 5, 2016 /CNW Telbec/ - National Bank announces that it expects to record specific provisions of $12 million ($17 million before taxes) as well as a sectoral provision for credit losses of $183 million ($250 million before taxes) on its oil and gas producers and services loan portfolio in the second quarter 2016. The sectoral provision will reduce earnings per share by approximately 54 cents and common equity tier 1 ratio (CET1) by approximately 16 basis points in the second quarter 2016. The Bank expects its CET1 ratio to stand at approximately 9.7% at the end of that same quarter.

In addition, the Bank will revise downward its annual credit loss guidance set previously this year at 25 to 35 basis points, back to a range of 20 to 30 basis points of the total loans and BA's. The credit performance of the overall loan portfolio, excluding the oil and gas producers and services loan portfolio, remains within expectations.

The Bank will release its second quarter 2016 results on June 1st, 2016 and a conference call for analysts and institutional investors will be held at 1 PM EDT on June 1st, 2016.

Caution Regarding Forward-Looking Statements
Certain statements in this press release are forward-looking statements made in accordance with current securities legislation in Canada and the United States. They include, among others, statements about the expected level and effects of the provisions that are anticipated. These forward-looking statements are typically identified by future or conditional verbs or words such as "outlook," "believe," "anticipate," "estimate," "project," "expect," "intend," "plan," and similar terms and expressions.

By their very nature, such forward-looking statements require assumptions to be made and involve inherent risks and uncertainties, both general and specific. Assumptions about the performance of the Canadian and U.S. economies in 2016 and how that will affect the Bank's business are among the main factors considered in setting the Bank's strategic priorities and objectives and in determining its financial targets, including provisions for credit losses. In determining its expectations for economic growth, both broadly and in the financial services sector in particular, the Bank primarily considers historical economic data provided by the Canadian and U.S. governments and their agencies.

There is a strong possibility that express or implied projections contained in these forward-looking statements will not materialize or will not be accurate. The Bank recommends that readers not place undue reliance on these statements, as a number of factors, many of which are beyond the Bank's control, could cause actual future results, conditions, actions or events to differ significantly from the targets, expectations, estimates or intentions expressed in the forward-looking statements. These factors include credit risk, market risk, liquidity and funding risk, operational risk, regulatory compliance risk, reputation risk, strategic risk and environmental risk (all of which are described in more detail in the Risk Management section beginning on page 55 of the 2015 Annual Report), general economic environment and financial market conditions in Canada, the United States and certain other countries in which the Bank conducts business, including the volatility and level of various commodity prices, the occurrence of natural catastrophes, regulatory changes affecting the Bank's business, capital and liquidity; changes in the accounting policies the Bank uses to report its financial condition, including uncertainties associated with assumptions and critical accounting estimates; tax laws in the countries in which the Bank operates, primarily Canada and the United States (including the U.S. Foreign Account Tax Compliance Act (FATCA)); changes to capital and liquidity guidelines and to the manner in which they are to be presented and interpreted; changes to the credit ratings assigned to the Bank; and potential disruptions to the Bank's information technology systems, including evolving cyber attack risk.

The foregoing list of risk factors is not exhaustive. Additional information about these factors can be found in the Risk Management section of the 2015 Annual Report. Investors and others who rely on the Bank's forward-looking statements should carefully consider the above factors as well as the uncertainties they represent and the risk they entail. Except as required by law, the Bank does not undertake to update any forward-looking statements, whether written or oral, that may be made from time to time, by it or on its behalf.

The forward-looking information contained in this press release is presented for the purpose of interpreting the information contained herein and may not be appropriate for other purposes.

About National Bank of Canada
With $219 billion in assets as at January 31, 2016, National Bank of Canada, together with its subsidiaries, forms one of Canada's leading integrated financial groups. The Bank has close to 20,000 employees and is widely recognized as a top employer. The Bank's securities are listed on the Toronto Stock Exchange (TSX: NA). Follow the Bank's activities at or via social media such as Facebook, LinkedIn and Twitter


SOURCE National Bank of Canada

For further information: (The telephone numbers provided below are for the exclusive use of journalists, other media representatives and shareholders.): Claude Breton, Vice-President, Public Affairs, National Bank of Canada, Tel.: 514-394-8644; Linda Boulanger, Vice-President, Investors Relations, National Bank of Canada, Tel.: 514-394-0296


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