MONTREAL — National Bank beat expectations as a strong performance across its business contributed to record adjusted profits in the quarter.[np_storybar title=”Canadian banks are a bargain — but it won’t last ” link=”https://business.financialpost.com/2013/08/26/high-shorting-is-keep-canadian-bank-stocks-cheap/”%5DA new analysis by Scotia Capital has found that Canadian bank stocks are notably cheap compared to their Australian peers and Canadian life insurance companies. Keep reading. [/np_storybar]The bank reported Wednesday that it earned $419 million or $2.39 per diluted share in net income in the latest period, up from $379 million or $2.14 in the same period last year.Revenue rose 5% to $1.29 billion from $1.22 billion.Excluding one-items, the bank earned a record $391 million or $2.22 per diluted share, up 11% from $353 million or $1.98 per share in the same 2012 period.National Bank (TSX:NA) was expected to earn $2.06 per share in adjusted profits on $1.3 billion in revenues in the third quarter, according to analysts polled by Thomson Reuters.“Our credit quality and financial strength remain excellent, and our Pan-Canadian growth strategy has paid off with strong performance in the wealth management and financial markets segments,” president and CEO Louis Vachon said in releasing the bank’s earnings report“Furthermore, the bank continues to seek out opportunities, as was the case for the acquisition of TD Waterhouse Institutional Services announced on Aug. 1,” he added.Analyst John Aiken of Barclays called the results “very impressive” and enough to get the country’s six-largest bank some respect.“We would characterize National’s results as a very strong quarter,” he wrote in a report.The bank benefited from strong trading revenues, but the results were “arguably better” than what Bank of Montreal (TSX:BMO) and Scotiabank (TSX:BNS) posted on Monday, Aiken said.“Even if one does not give National Bank a full credit for trading, which the market rarely does, the results still came in well ahead of expectations. We note that National is trading at the lowest multiple of the group and should finally get some respect with these earnings.”Quebec’s largest bank maintained its dividend at 87 cents per share, but Aiken said a hike is likely next quarter based on the strength of the bank’s results.National Bank’s personal and commercial segment’s adjusted income rose 2% to $192 million due in part to an $8 million increase in net interest income caused by a growth in personal loans.The bank’s wealth management business earned $52 million, up from $39 million a year earlier. Revenues grew 8% due to higher deposit volumes and increased fee-based revenues resulting from a growth in assets under administration and under management.The financial markets segment earned $158 million, up from $111 million in the same quarter of 2012. Revenues, on a taxable equivalent basis, grew to $382 million from $322 million due to increases in all types of trading activities revenues.National Bank said its Tier 1 capital ratio was 8.6%, up from 7.3% as of Oct. 31, 2012. Return on equity was 21.9%, or 20.3% excluding one-time items.Earlier this month, it signed a deal to pay $250 million for TD Waterhouse Institutional Services, which provides back-office and support solutions for portfolio managers and brokers across the country.The agreement, which is expected to close later this year, is subject to regulatory approvals and other conditions.The bank said the acquisition will help it increase its payout of recurring earnings per share by 12 cents in 2014, and 14 cents the year after.National Bank is the third large Canadian bank to report this week. Scotiabank (TSX:BNS) and Bank of Montreal (TSX:BMO) both reported Tuesday. Royal Bank (TSX:RY), Toronto-Dominion (TSX:TD) and CIBC (TSX:CM) report on Thursday.