National Bank of Canada topped expectations as it reported its first-quarter profit rose more than 20 per cent compared with a year ago, boosted by growth across its business.

Profits were up eight per cent year-over-year in the personal and commercial banking business, up 20 per cent in the wealth management business, up 37 per cent in the financial markets business, and up 60 per cent in the U.S. specialty finance and international business, the Montreal-based bank said in its quarterly report on Wednesday.

National Bank's share price rose nearly five per cent on Wednesday to close at .

"With more people working from home, coupled with historically low interest rates, we continue to see significant pent-up demand in the housing market," said chief executive Louis Vachon on a conference call with analysts.

"Furthermore, consumers are spending less saving more and investing more. Finally, markets are very strong, stimulated by monetary policies and new technological and financial innovations. Looking at our own province, we remain optimistic about the economic recovery."

Provisions for credit losses totalled $81 million, down from $89 million a year earlier. But Vachon said in a statement that the bank is still maintaining "significant reserves for credit losses."

The bank's quarterly report noted that while a number of its COVID-19 relief programs wrapped up at the end of 2020, there are still special loans with government guarantees.

A presentation by the bank said that only about 3.5 per cent of its total gross loans were in the industries most impacted by the COVID-19 pandemic, including car dealerships and auto manufacturing, stores, hotels, restaurants, air transportation and commercial real estate.

The presentation also said that National Bank has cut its outstanding loans in the oil and gas production and services sectors over the years.

Martin Gagnon, who heads the bank's wealth management team, said there has been a big increase in the number of U.S. shares traded versus Canadian shares being traded, which brings in foreign exchange revenue.

"There is an element to it that is related to the frenzy that everybody saw," said Gagnon. "But there's also an element coming from portfolio managers ...We like the profile that we have. Especially at (National Bank Direct Brokerage), it's not only coming from a GameStop trading. We've gained a number of accounts."

National Bank was the fourth major Canadian lender this week to report better-than-expected profit growth during the latest quarter, alongside BMO, RBC, and Scotiabank.

Overall, National earned net income of $761 million or $2.15 per diluted share for the quarter ended Jan. 31, up from $610 million or $1.67 per diluted share a year ago.

Excluding specified items, the bank says it earned $2.15 per diluted share, up from $1.70 per diluted share a year ago. Analysts on average had expected an adjusted profit of $1.71 per share, according to financial data firm Refinitiv.

Maria-Gabriella Khoury, senior vice president covering North American financial institutions at DBRS Morningstar, said that National Bank was among the strongest of the Big Six Canadian banks to report quarterly results so far.

"The results were very strong across all its segments, both in Canada and abroad," said Khoury in an interview. "Mortgages seemed resilient, particularly in Quebec ...The Quebec mortgage market has been stable and trending upward, and steadily growing -- not seeing the big price volatility that Toronto and Vancouver see."

The Office of the Superintendent of Financial Institutions in December reiterated that Canadian banks and insurers should not increase regular dividends, buy back shares or raise executive compensation. But Vachon said on Tuesday that National Bank will look at increasing dividends and share buybacks once restrictions are lifted.