BMO surprises with $1B profit

Written By Unknown on Selasa, 26 Februari 2013 | 22.39

Bank of Montreal got the banking sector's first-quarter earnings season off to a bang, delivering surprisingly strong revenue and a profit that remained above $1 billion — beating analyst estimates.

Analysts had estimated about $958 million in adjusted profit, the equivalent of $1.48 per share.

Instead, BMO beat that by four cents per share with $1.041 billion of adjusted net income — up $69 million or seven per cent from a year earlier.

The bank's revenue and net income were also well above consensus estimates compiled by Thomson Reuters.

Retail banking strength

Chief executive Bill Downe says all of the bank's major divisions in Canada and the United States — where it operates under the BMO Harris Bank brand — performed well during the three-month period, which ended Jan. 31.

"Looking ahead, we are well-positioned to leverage our North American platform and deliver sustained earnings growth," Downe said in a statement.

The bank also said its quarterly dividend will be going up, rising by two cents to 74 cents per share.

Analysts had expected most of Canada's big banks would hike their dividends and report strong first-quarter earnings. But they were also cautious about how they'll fare in the months ahead, particularly at their Canadian retail operations.

Bank of Montreal is the first of its peers to report first-quarter earnings.

The bank's total revenue for the quarter was down slightly from a year earlier, falling by one per cent to $4.08 billion from $4.12 billion. The consensus estimate had been for revenue to fall further to $3.9 billion.

Net income, before adjustments, also fell — dropping by five per cent to $1.048 billion from $1.109 billion in the first quarter of fiscal 2012. The consensus estimate had been for $923.6 million or $1.45 of net income.

There were signs of weakness elsewhere in the report, however.

Provisions for credit losses increased to $178 million from $141 million. Return on equity dropped to 14.9 per cent from 17.2 per cent and adjusted ROE was 14.8 per cent, down from 15 per cent a year earlier.


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