Bank of Montreal Raises Dividend as Net Income Steady

Bank of Montreal, Canada’s fourth-largest lender by assets, posted quarterly profit that beat analysts’ estimates on gains in wealth management. The bank raised its dividend 2.7 percent to 76 cents a share.

Net income for the period ended Oct. 31 was C$1.09 billion ($1.02 billion), or C$1.62 a share, little changed from C$1.08 billion, or C$1.59, a year earlier, the Toronto-based company said today in a statement. Adjusted earnings, which exclude some items, were C$1.64 a share, the bank said, beating the C$1.57 average estimate of 14 analysts surveyed by Bloomberg.

Bank of Montreal, the first Canadian lender to report quarterly results, almost doubled its wealth-management earnings in the fiscal fourth quarter from a year ago, helped by a gain from an accounting change. Revenue was little changed at C$4.19 billion.

“Earnings did better than expected, and wealth management seems to have lead the charge,” said Ian Nakamoto, director of research with MacDougall, MacDougall & MacTier Inc. in Toronto, which manages about C$4.7 billion including bank shares.

The lender gained 21 percent this year to C$73.53 at yesterday’s close in Toronto, outpacing the 16 percent advance of the eight-company Standard & Poor’s/TSX Composite Commercial Banks Index.

Photographer: Brent Lewin/Bloomberg

Bank of Montreal is the first Canadian lender to report quarterly results. Close

Bank of Montreal is the first Canadian lender to report quarterly results.

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Photographer: Brent Lewin/Bloomberg

Bank of Montreal is the first Canadian lender to report quarterly results.

Trading Declines

Bank of Montreal set aside C$189 million for bad loans in the quarter, down from C$192 million a year earlier.

Canadian consumer-banking profit rose 6.1 percent to C$469 million from a year earlier, while earnings from its Chicago-based BMO Harris Bank fell 24 percent to C$106 million, according to the statement.

Profit at the firm’s private-client group, which includes insurance and mutual funds, soared to C$312 million from C$164 million a year earlier as rising stock markets lifted assets under management. The firm recorded a C$121 million securities gain from an accounting change.

Earnings from the BMO Capital Markets investment-banking unit fell to C$229 million from C$314 million a year earlier. Revenue from trading slid by a third to C$235 million, led by declines in equities, interest-rate derivatives and Canadian-government securities trading.

Share Buybacks

Bank of Montreal (BMO) posted a record full-year profit of C$4.25 billion, or C$6.26 a share, up 1.4 percent from a year earlier, the firm said.

“BMO’s fourth-quarter results mark the finish of a year in which the bank achieved record revenue, net income and earnings per share, while generating the best one-year total shareholder return among the Canadian banks,” Chief Executive Officer William Downe, 61, said in the statement.

The bank said separately today that it plans to buy back as many as 15 million shares or up to 2.3 percent of its stock from Feb. 1, 2014 to Jan. 31, 2015.

The country’s six biggest banks will post average per-share profit growth of 8.3 percent after excluding items, according to Robert Sedran, an analyst with Canadian Imperial Bank of Commerce.

National Bank of Canada, the sixth-largest lender, reports results tomorrow, followed by Royal Bank of Canada, Toronto-Dominion Bank and Canadian Imperial Bank of Commerce on Dec. 5. Bank of Nova Scotia, the third-largest lender, reports the next day.

(Bank of Montreal will hold a conference call to discuss quarterly results at 2 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 editors responsible for this story: David Scanlan at dscanlan@bloomberg.net; Peter Eichenbaum at peichenbaum@bloomberg.net

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