Bank of Montreal hikes dividend as it reports Q4 net income surge

TORONTO Bank of Montreal hiked its dividend as it reported a fourthquarter profit that jumped 38 per cent compared with a year ago and beat analyst estimates.

BMO was the last of the country’s Big Five banks to post its earnings for its financial fourth quarter and 2018 financial year, with all delivering quarterly profit increases but some falling short of market expectations.

The bank’s latest quarterly results were driven by strong performances from its Canadian and U.S. personal and commercial banking divisions as well as its wealth management business.

Its results from the three months ended Oct. 31 capped off a “successful year” for the bank, said BMO's chief executive Darryl White on Tuesday.

Canada’s fourth-largest lender also said Tuesday it will now pay a quarterly dividend of $1 per share, up four cents from its previous payment.

The increase in payment to shareholders came as BMO reported its net income for the three months ended Oct. 31 rose to $1.7 billion or $2.57 per diluted share, up from to $1.23 billion or $1.81 in 2017.

BMO’s peers reported their latest quarterly and annual earnings last week, drawing mixed reactions from analysts and the market. Canada's two biggest lenders, TorontoDominion Bank and Royal Bank of Canada, beat estimates with quarterly net income of $2.96 billion and $3.25 billion, respectively. Canadian Imperial Bank of Commerce and Bank of Nova Scotia posted net income for the period of $1.27 billion and $2.27 billion, respectively, falling just short of analyst estimates.

Better credit provisions generally drove the bank’s earnings beat, said Scott Chan, an analyst with Canaccord Genuity.

“Our initial reaction is neutral to slightly favourable as BMO delivered strong results in its core P&C business” with both Canadian and U.S. platforms benefiting from solid loan growth, particularly commercial, he said in a note to clients.