National Bank of Canada said Wednesday that it would take a cautious approach to growth as it reported first quarter profits that were down as provisions for credit losses ticked up.

"In a highly uncertain macro environment, we are maintaining a defensive positioning with a disciplined approach to capital, risk and cost management," said chief executive Laurent Ferreira on an earnings call.

National's capital ratio of 12.6 per cent is already higher than most other Canadian banks to give it room to spend for organic growth, but the bank is also setting aside more money for potential loan losses as first quarter provisions totalled $86 million compared with a recovery of $2 million in its first quarter of 2022.

"Underlying credit conditions remained strong in Canada. Nonetheless, given the uncertain macroeconomic outlook and consistent with our disciplined approach, we are building additional reserves," said Ferreira.

The provisions helped push its first quarter profits to $881 million, down from $930 million in the first quarter of 2022. Revenue totalled $2.58 billion, up from $2.47 billion in the same quarter last year.

On an adjusted basis, National Bank says it earned $2.56 per diluted share, down from an adjusted profit of $2.64 per diluted share in the same quarter last year.

Analysts on average had expected a profit of $2.37 per share, according to estimates compiled by financial markets data firm Refinitiv.

The bank beat expectations on trading as have the rest of the banks so far this quarter, while it also got a boost from high net interest income (NII), said Scotiabank analyst Meny Grauman.

"The bottom line here is that while trading was certainly part of the beat, NII was also better than expected even if the strength is hard to understand," he said in a note.

Grauman also noted that the bank's expense growth of 10 per cent from the same quarter last year was soft, but chief financial officer Marie Chantal Gingras said the bank would be cutting back.

"We will be strategic and selective in managing expenses, notably related to new hirings, technology investments and discretionary spending."