Kicking off the second-quarter reporting season for Canada's big
banks, Bank of Montreal (BMO) posted a 7% improvement in earnings
and beat analyst expectations on the back of lower loan-loss
provisions and ongoing strength in its Canadian personal and
commercial banking operations.
The country's fourth-largest bank in assets earned C$800 million
or C$1.34 a share in its latest quarter, up from C$745 million or
C$1.26 a year earlier.
Adjusted earnings improved to C$1.35 a share from C$1.28, ahead
of the Thomson Reuters mean estimate of C$1.31 a share.
Loan-loss provisions fell to C$145 million from C$249 million a
year earlier.
Return on equity rose to 16.7% from 16.4%. Revenue was up 5.5%
to C$3.22 billion.
Analysts were expecting Canada's big banks to post another
quarter of solid earnings, helped in part by lower loan losses in
the wake of a steadily improving economy.
"As we see the signs of a business-led recovery in both Canada
and the United States, we believe that banks like ours have a
unique institutional responsibility to play in that recovery. Our
consistent approach to lending, in good times and more challenging
times, continues to pay off with ongoing strength in P&C Canada
commercial loans balances and market share, while maintaining our
disciplined approach to risk management," the bank said.
Earnings from BMO's personal and commercial banking operations
rose C$3 million to C$443 million, including a 1.7% improvement in
Canada to C$401 million. Earnings from its private client group and
BMO Capital Markets operations fell 12% and 9.6%, respectively.
BMO owns Chicago-based Harris Bank and agreed in December to buy
Milwaukee, Wis.-based Marshall & Ilsley Corp. (MI) in a US$4.1
billion deal. The bank continues to expect to close the purchase in
its fiscal third quarter.
BMO maintained its quarterly dividend at 70 Canadian cents a
share.
In Toronto Tuesday, Bank of Montreal closed at C$61.50, down
1.1%.
-By Judy McKinnon, Dow Jones Newswires; 416-306-2100;
judy.mckinnon@dowjones.com