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The Bank of Montreal beat analysts’ expectations in the fiscal fourth quarter, amid marked improvement in credit quality and double-digit earnings growth in its capital markets unit.
BMO said Tuesday it earned $ 1.6 billion in net income during the three months that ended Oct.31, up from $ 1.2 billion a year earlier. On an adjusted basis, the bank posted a profit of $ 2.41 per share. Analysts, on average, had expected $ 1.91.
The bank set aside $ 432 million during the last quarter for loans that could go bad. This was a sharp decline from $ 1.05 billion in the previous quarter.
Compared with the prior year’s fourth quarter, BMO’s capital markets activity was the best as adjusted profit rose 38% to $ 387 million.
Wealth management operations also produced year-over-year growth as adjusted profit in that unit grew 9% to $ 328 million.
In absolute terms, profits from BMO’s Canadian personal and commercial (Non-Life) businesses dwarfed those units to $ 647 million in the fourth quarter. While it was down 9% from the same quarter in 2019, it was more than double the profit from the fiscal third quarter.
It was a similar theme in BMO’s US Non-Life division, where adjusted profit fell 17% year-on-year to $ 253 million, but that also represents a 27% jump from the previous quarter.
“We entered the year in a strong position with good momentum across all of our businesses,” said Darryl White, CEO of BMO, in a statement. “During the challenges brought about by the pandemic, we have been at the forefront of economic recovery, supporting our customers, communities and employees through uncertainty and hardship.”
“Our results for the year are a testament to the resilience and diversification of our businesses and our ability to quickly adapt to the changing environment.”
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