Bank of Montreal (NYSE:BMO) joined its rival Canadian banks in posting fiscal second-quarter results which whizzed past analysts’ expectations thanks to a robust showing from its personal banking and wealth management businesses.
Lenders in Canada have reaped the benefits of improving profits in their most recent quarters thanks to the Bank of Canada’s three consecutive interest rate raises since July.
“BMO’s results this quarter demonstrate strong performance and momentum in our US and Canadian P&C banking and wealth businesses, which drove adjusted earnings per share of US$2.20, up 15% from a year ago, and very strong adjusted operating leverage of 3.5%,” said Darryl White, chief executive officer for BMO Financial Group, in a statement.
Earnings per share jumped to C$2.20 in the quarter until March 31, which trounced analysts’ estimate of C$2.12 per share. Overall net income rose to C$1.5bn in the quarter while profits from its Canadian retail business climbed 11% to C$591mln. The bank’s net income from its US retail group, meanwhile, advanced 43% to C$359mln.
The bank took an after-tax restructuring charge of C$192mln in the quarter, which primarily stemmed from severance costs. Its return on equity – a key benchmark for profitability – came to 12.6% in the quarter, remaining unchanged from last year.
Bank of Montreal shares were flat at US$77.12 in afternoon trade.