BMO Q1 profit rises to $1.5 billion despite ‘challenging revenue environment’

TORONTO — The Bank of Montreal beat expectations with a first-quarter profit of $1.5 billion, up from $973 million during the same period a year earlier.

The profit amounted to $2.28 per share for the three-months ended Jan. 31, up from $1.43 per share during the same period a year earlier when it recorded a one-time charge of $425 million related to U.S. tax changes.

On an adjusted basis, the profit amounted to $1.54 billion for the quarter or $2.32 per diluted share, compared with $1.42 billion or $2.12 during the same period a year earlier.

Analysts had expected a profit of $2.23 per share, according to those surveyed by Thomson Reuters Eikon.

While Canada’s fourth-largest lender saw strong results from its U.S. personal and commercial banking division, and relatively flat earnings from its domestic retail banking arm, BMO saw a drop in profit from its wealth management and capital markets divisions amid “weaker global market conditions.’’

BMO chief executive Darryl White says the bank’s North American personal and commercial banking businesses performed “very well’’ while its market-sensitive businesses were impacted by the “challenging srevenue environment’’ earlier in the quarter.

“BMO’s good performance this quarter reflects the benefits of our diversified and attractive business mix which continues to deliver sustainable growth, with adjusted earnings per share up 10 per cent from last year,’’ White said in a statement.

“We are well-positioned to build on our performance through the year.’’

The profit came as BMO’s Canadian personal and commercial banking earned $647 million, up by a $1 million from a year ago as revenue growth was partially offset by higher expenses and higher provisions for credit losses.

In the U.S., personal and commercial banking earned $444 million, up $134 million or 43 per cent compared with a year ago.

The bank’s wealth management business earned $239 million, down from $266 million a year ago, while its capital markets business earned $255 million, down from $271 million.

BMO’s corporate services division reported a loss of $75 million for the quarter compared with a loss of $520 million a year ago.

The bank’s common equity tier 1 ratio was 11.4 per cent at Jan. 31, up from 11.3 per cent at the end of its fourth quarter.

Total provisions for credit losses were $137 million, down $4 million from a year ago.