BMO profits exceed forecast
The Bank of Montreal joined its peers in delivering secondquarter profits that beat expectations as Canada’s Big Five banks earned a collective $10.6 billion — up nearly 11 per cent from a year ago.
Canada’s biggest banks also handily beat analyst estimates for adjusted profits, brushing off concern about the impact of a cooling real estate market amid tighter mortgage lending guidelines.
“The market is in various stages of worry about the outlook for the mortgage market in particular, but the results themselves seem to indicate that a lot of that worry is misplaced,” said Meny Grauman, an analyst with Cormark Securities in Toronto.
BMO was the last of the big- gest banks to report its earnings for the three-month period ended April 30 on Wednesday.
Its second-quarter net profit of $1.25 billion was relatively flat compared with a year ago, but included a $192-million after-tax restructuring charge primarily related to severance costs.
Canada’s fourth-largest lender also raised its quarterly dividend to 96 cents a share, up three cents from 93 cents in its previous quarter.
BMO said it earned $2.20 a share on an adjusted basis for the quarter, up from $1.92 a share a year ago. Analysts on average had expected the bank to earn $2.12 a share, according to Thomson Reuters Eikon.
Like its rivals, BMO benefited from strong earnings on both sides of the border. Its Canadian banking arm saw net income rise 11 per cent to $590 million. And although home sales activity across the country in April hit a monthly low not seen in years, due to factors including a new stress test for uninsured mortgages as of Jan. 1 and higher interest rates, BMO’s total Canadian residential mortgage portfolio grew by 2.2 per cent to $106.4 billion in the latest quarter.