National Bank of Canada today said that rising capital markets and a firmer credit position boosted its third-quarter profit by 3%.

The bank said net income for the quarter ended July 31 was $167 million, or 95¢ per basic share, up from $162 million, or 89¢ per share a year ago.

The bank set aside $31 million for bad loans, compared with a loan loss provision of $45 million in the same quarter last year.

Return on equity was 17.2%, about flat from 17.3% in the year-ago quarter.

Total revenue rose slightly to $858 million from $851 million, driven by low interest rates and strong financial markets.

The bank said all of its operating segments contributed to the quarter’s earnings.

At $95 million, net income for the Personal and Commercial segment in the third quarter of 2004 was up $3 million or 3% from the corresponding quarter of 2003.

Lower credit losses and 6% growth in loan volumes over the year-earlier period had a favourable impact on this segment’s performance.

The Wealth Management segment declared net income of $23 million for the quarter, an increase of 5% over the $22 million posted in the third quarter of 2003.

Net income for the Financial Markets segment was $54 million, up 2% from $53 million a year earlier. Lower trading revenues were offset by higher corporate financing revenues and lower credit losses.