National Bank of Canada (TSX:NA) expects economic conditions will improve this year in Central Canada as consumers get some breathing room from lower interest rates and fuel prices.

“We estimate that reduced gasoline prices in 2015 at today’s current level will be equivalent to a $5-billion tax cut for Quebec and Ontario consumers,” CEO Louis Vachon said Wednesday after the bank released its first-quarter results.

Vachon said the labour market is improving, especially in Quebec, while a lower Canadian dollar and U.S. economic expansion are beginning to boost exports from the traditional manufacturing provinces.

“Overall, we believe that consumer spending, business investments, exports and a still elevated level of public infrastructure investments should positively impact (the) Quebec and Ontario economies,” Vachon told analysts.

He said the bank has a “manageable” exposure in Canada’s oil patch and rejected some news reports that raised concerns about Quebec’s real estate market.

“What we see is actually the soft landing that a lot of people have predicted for Canada is actually happening in the Quebec real estate market,” Vachon said, adding that prices in Montreal and Quebec City have been flat for three years.

The Montreal-based bank (TSX:NA) beat expectations in the first quarter as its net income attributable to shareholders grew two per cent to $397 million on strong growth in its financial markets segment.

Excluding one-time items, the Montreal-based bank reported Wednesday that it earned $392 million or $1.14 per diluted share, two cents above analyst forecasts. That compared with an adjusted profit of $368 million or $1.09 per share in the prior year.

Revenues for the period ended Jan. 31 were $1.4 billion, up some three per cent from $1.34 billion in the first quarter of 2014.

The bank’s core personal and commercial business generated $175 million in profits on $691 million of revenues as consumer loans, mortgages and consumer lending grew seven per cent.

Wealth management profits grew 12 per cent to $76 million, or $83 million excluding one-time items. Segment revenues were up six per cent to $342 million.

Financial markets profits surged 23 per cent to $178 million as revenues increased 15 per cent to $418 million.

The return on common shareholders’ equity fell two percentage points to 17.8 per cent. Provisions for credit losses was $54 million.

On the Toronto Stock Exchange, National Bank’s shares closed up $1.53 or 3.26 per cent at $48.43 on Wednesday.