Banks report huge jump in Q4 profits

TORONTO — Canada’s biggest banks earned more than $11 billion in the latest quarter, up 14 per cent from a year ago, closing out a financial year in which these lenders collectively generated some $43 billion in profits, brushing off worries over tightened lending rules and trade uncertainty.

The Bank of Montreal on Tuesday was the last of the country’s Big Five lenders 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.

Despite the mixed market reaction, the banks’ performance during the three months ended Oct. 31 was generally “strong” across the board, with good revenue growth led by commercial lending as mortgage growth moderated under after new guidelines were introduced this year, said Robert Colangelo, the senior vice-president of financial institutions at ratings agency DBRS.

The banks also got an earnings boost from their U.S. or international footprints, he added.

BMO on Tuesday reported a 38 per cent jump in quarterly net income to $1.7 billion or $2.57 per diluted share, up from $1.23 billion or $1.81 in 2017.

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.

On an adjusted basis, BMO earned $1.53 billion or $2.32 per diluted share, compared with $1.31 billion or $1.94 per share a year ago. Analysts on average had expected a profit of $2.29 per share, according to Thomson Reuters Eikon.

Still, BMO’s shares slipped by as much as 3.2 per cent in Toronto on Tuesday to $95.85.

Canada’s two biggest lenders, Toronto-Dominion 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.