National Bank of Canada’s first quarterly dividend increase in about three years may placate investor concerns about dividend growth at other Canadian lenders, analysts said. The Montreal-based bank lifted its dividend by 4 cents, or 6.5 percent, to 66 cents a share, according to a statement yesterday after markets closed. It was the first increase in two years for any of Canada’s six main banks.

“With ‘dividend fever’ seemingly once again taking hold of the (National) quote in recent days, the market should be placated” by the increase, said Sumit Malhotra, an analyst at Macquarie Capital Markets in Toronto. The dividend was raised after fourth-quarter profit topped analysts’ estimates. Net income for the period ended Oct. 31 climbed to C$287 million ($280 million), or C$1.66 a share, from C$241 million, or C$1.39, a year earlier. National, the first lender to report fourth-quarter results, was forecast to earn C$1.57 a share, based on a Bloomberg survey of eight analysts.

National Bank’s increase surpassed the Bloomberg Dividend Forecast of 64 cents a share. The forecast is based on company guidance, analysts’ estimates and other factors. Other Canadian lenders may raise their payouts this quarter or next year, after the country’s financial-services regulator in September told banks they no longer need “increased conservatism” in capital management.

“They are probably on the leading edge of one of those banks where it’s going to be a greater allocation to dividend and share buybacks,” said Craig Fehr, an analyst at Edward Jones & Co. in St. Louis. “They don’t have the robust opportunities” that other Canadian banks have, he said.

Stock Declines

National Bank fell 89 cents, or 1.3 percent, to C$67.84 in trading yesterday on the Toronto Stock Exchange. The shares climbed 13 percent this year, compared with the 7 percent increase on the S&P/TSX Banks Index.

Before one-time items, National Bank earned C$1.63 a share, topping the C$1.55-a-share average estimate of 12 analysts surveyed by Bloomberg news. Revenue was little changed at almost C$1.1 billion.

The results include a C$15 million charge for severance pay in the investment-banking unit, where profit fell 29 percent to C$104 million. A “repositioning” of the National Bank Financial unit led to about 35 “departures,” bank spokesman Claude Breton said. He wasn’t more specific.

Speculative Pressure

“Overall, the core earnings were quite favorable and we believe that this should offset much of the speculative pressure placed on National’s stock on Tuesday after it was reported that it had laid off staff within the equity capital markets division,” John Aiken, an analyst at Barclays Capital, wrote in a note to investors.

Personal and commercial banking profit rose 34 percent to C$145 million as loans rose, while wealth-management earnings climbed 19 percent to C$31 million. For the year, National Bank earned a record profit of C$1.03 billion, up 21 percent from C$854 million in fiscal 2009.

Toronto-Dominion Bank and Canadian Imperial Bank of Commerce are scheduled to report results tomorrow, followed by Royal Bank of Canada and Bank of Nova Scotia on Dec. 3. Bank of Montreal and Canadian Western Bank release results Dec. 7 and Laurentian Bank reports Dec. 8.