Bank of Montreal Profit Tops Estimates on Consumer Loans

Bank of Montreal, Canada’s fourth-largest lender by assets, said third-quarter profit topped analysts’ estimates on record consumer lending and lower provisions for bad loans.

Net income for the period ended July 31 climbed 17 percent to C$1.14 billion ($1.08 billion), or C$1.68 a share, from C$970 million, or C$1.42, a year earlier, the Toronto-based company said today in a statement. Revenue rose 4.4 percent to C$4.05 billion.

Bank of Montreal (BMO), the first Canadian lender to report quarterly results, posted growth across all its major businesses, including record profit in Canadian banking and wealth management. The bank also set aside less money for bad loans.

“Canadian retail businesses were particularly strong in the quarter with both personal and commercial banking Canada and traditional wealth earnings reaching new highs,” Chief Executive Officer William Downe, 61, said in the statement.

Adjusted earnings, which exclude some items, were C$1.68 a share, beating the C$1.53 average estimate of 15 analysts surveyed by Bloomberg.

The bank set aside C$77 million for bad loans, compared with C$237 million a year earlier.

Harris Bank

Canadian consumer-banking profit rose 8.3 percent to C$497 million on higher balances and fees, 10 percent loan growth and lower provisions for credit losses, the company said. Profit from its Chicago-based BMO Harris Bank rose 10 percent to C$153 million on lower provisions and cost-cutting.

Bank of Montreal has increased earnings from its U.S. unit since doubling deposits and branches through the July 2011 takeover of Wisconsin-based lender Marshall & Ilsley. The C$4.1 billion acquisition was Bank of Montreal’s largest in its 195-year history.

Profit at the firm’s private-client group, which includes insurance and mutual funds, doubled to C$218 million from a year earlier on an increase in assets under management.

The BMO Capital Markets investment-banking unit profit rose 12 percent to C$280 million, with increases in trading and fees from advising on stock sales.

The country’s six biggest banks are expected to post average per-share profit growth of 3.3 percent excluding some items, according to Robert Sedran, an analyst with Canadian Imperial Bank of Commerce. Bank of Nova Scotia (BNS), the third-biggest bank, also reports today.

(Bank of Montreal will hold a conference call to discuss quarterly results at 1:30 p.m. Toronto time at +1-888-789-0089 or at www.bmo.com/investorrelations)

To contact the reporter on this story: Doug Alexander in Toronto at dalexander3@bloomberg.net

To contact the editor responsible for this story: David Scanlan at dscanlan@bloomberg.net

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