National Bank of Canada Stock Plunges Despite Strong Earnings

Despite posting strong earnings in its latest quarter, National Bank of Canada's (TSX:NA) stock price has declined by about 8% over the past month.

The bank reported a net income of CA$1.3 billion and return on equity of 16.8%, with revenue growing to CA$3.8 billion, a 17.3% increase from the same period last year.

The bank's earnings per share (EPS) rose by 26% to CA$3.29, while its cost-to-income ratio improved to 49.8% from 52.4%, indicating increased efficiency.

However, some investors are concerned about the potential risks associated with the bank's recent acquisition, CWB Financial Group. The bank has reported higher observed default rates in the acquired book and a lower than expected allowance for bad loans.