Bank of Montreal Earnings Better Than Expected

The Bank of Montreal’s (BMO) latest earnings report came out higher than analyst expectations. The reports for the third quarter ending July 31, showed Earnings Per Share (EPS) of C$1.86, which is 3 percent higher than the same time last year. After excluding one-off items, the amount rose to C$1.94 against an average forecast of C$1.81. The adjusted EPS came off 4 percent higher than the same time last year. Bank of Montreal is Canada’s fourth largest bank. The bank saw major growth in its operations in the US. BMO’s personal and commercial US banking business had a 24 percent increase in net income to C$277 million. This helped the bank actualise a 4 percent increase in its total net income to C$1.25 billion over the same period last year. Adjusted for one-off items, income grew to C$1.3 billion, a 5 percent rise.

Another over performing sector was the BMO Capital Markets unit, which had a net income of C$321 million, an 18 percent improvement from the same time last year. BMO also put aside funds to cover loans losses of C$257 million, an almost C$100 million increase. Canadian banks were hit hard by loans losses following defaults by companies in the oil and gas sector. Analysts from Barclays and RBC stated their pleasure with the performance of the bank and the very encouraging reports regarding its loans funding. Though not out of the woods yet, the bank has made significant improvements and the EPS exceeded expectations significantly and has provided much reason for optimism. BMO’s core tier 1 ratio was up 50 basis points from quarter 2, now standing at 10.5 percent. This index measures the bank’s financial strength.