National Bank of Canada today posted a 29% drop in profit for the second quarter ended April 30 as it booked $73 million in losses related to asset-backed commercial paper (ABCP).

The Montreal-based bank said it earned $165 million, or $1 a share in the quarter, down from a year-ago profit of $233 million, or $1.40 a share.

Excluding one-time items, mainly the $49 million after-tax hit on ABCP hedges, the bank said it earned $229 million or $1.41 per share.

Return on equity slumped to 14.3%, the bank said.

“We continued to see progress in personal and commercial banking with growth in both personal loans and business loans and deposits,” stated CEO Louis Vachon in a release.

“The personal and commercial segment thus maintained its profitability despite the expected rise in credit losses resulting from adverse economic conditions. However, the market uncertainty that prevailed during the quarter counterbalanced that performance,” Vachon added.

Net income in personal and commercial was $113 million in the February-April quarter, up by $1 million from a year earlier as revenue edged up 2% to $534 million.

Earnings from wealth management slipped by $1 million to $44 million as revenue fell 8.6% to $213 million due to “a slowdown in securities brokerage activities, which stems from more difficult market conditions during the quarter,” the bank said.

Financial-markets profit fell by $9 million to $80 million as the segment’s revenue tumbled 14% to $279 million.