- BMO set C$1 billion goal from BMO Harris Bank, wealth in 2011
- Toronto-based bank saw record profit in the U.S. this year
Bank of Montreal surpassed its goal of earning C$1 billion ($748 million) in annual profit from U.S. banking and wealth management -- four years after Chief Executive Officer William Downe set the target.
“Back in 2011 we set an ambitious goal to generate more than C$1 billion after tax in earnings in the medium term in our personal, commercial and wealth businesses in the U.S.," Downe, 63, said Tuesday in a conference call with investors. "For the first time this year, we exceeded this goal."
Bank of Montreal, which owns Chicago-based BMO Harris Bank, set the three- to five-year target at its March 2011 annual investors meeting in Vancouver. Adjusted earnings for the U.S. businesses reached C$1.03 billion for the year ended Oct. 31, more than five times the C$184 million it recorded in fiscal 2010, according to financial disclosures.
The lender posted record adjusted annual profit of C$880 million from BMO Harris, up 25 percent from a year earlier, while earnings from U.S. wealth management almost doubled to C$150 million. Lower provisions and higher growth in commercial and industrial loans benefited U.S. banking, while a stronger greenback relative to the Canadian dollar helped boost results.
In July 2011, Bank of Montreal acquired Milwaukee-based Marshall & Ilsley Corp. for C$4.1 billion, which doubled deposits and branches in the country. Bank of Montreal has had a presence in the U.S. Midwest since buying Harris Bank for C$718 million in 1984.
"It’s very satisfying for the people who work in the business," Downe said in a telephone interview. “They did what they had to do, they did the integration quickly and they’ve done a great job in building business."
Downe said he expects profit growth to continue in the U.S. “The bank is really extremely well positioned in order to participate in what think is going to be a continuing recovery, and most importantly on the consumer side," he said.