Bank of Montreal Q4 profit jumps 38%, beats estimates

Bank of Montreal, along with its subsidiaries is known as BMO Financial Group, (BMO) reported a 38% jump in earnings for the fourth quarter helped by strong performance in its Personal and Commercial banking businesses. The results of the diversified financial services provider exceeded analysts’ expectations.

Net income climbed 38% to C$1.7 billion and earnings soared 42% to C$2.57 per share. The net income included a benefit from the remeasurement of an employee benefits liability in the current quarter. Adjusted net income increased 17% to C$1.53 billion and adjusted earnings grew 19% to C$2.32 per share.

The results reflected strong growth in US Personal and Commercial, good performance in Canadian Personal and Commercial and a lower Corporate Services loss, partially offset by lower income in BMO Capital Markets. Wealth Management results increased year-over-year largely reflecting less elevated reinsurance claims in the current year.

Revenue of C$5.92 billion increased 5% from the prior year or 4% excluding the impact of the stronger US dollar. On a basis that nets insurance claims, commissions and changes in policy benefit liabilities against insurance revenue, revenue increased 9% or 8% excluding the impact of the stronger US dollar.

Royal Bank of Canada Q4 earnings beat as higher interest rate lifts margins

Average earning assets grew by 11%, or 9% excluding the impact of the stronger US dollar, on loan growth, higher securities, higher securities borrowed or purchased under resale agreements and increased cash resources.

The total provision for credit losses decreased by C$27 million from the prior year. The provision for credit losses on impaired loans fell by C$25 million year-over-year, primarily due to lower provisions in the Personal and Commercial businesses and net recoveries in BMO Capital Markets and Corporate Services, compared with provisions in the prior year.

Concurrent with the release of results, BMO announced a first-quarter 2019 dividend of C$1.00 per common share, up 4% from the prior quarter and up 8% from the prior year. The dividend of C$1.00 per common share is equivalent to an annual dividend of C$4.00 per common share. The dividend is payable on February 26, 2019, to shareholders of record on February 1, 2019.

Shares of Bank of Montreal ended Monday’s regular session up 0.51% at $74.88 on the NYSE. The stock has fallen over 6% in the year so far and over 4% in the past year.

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