BMO misses expectations as higher loan-loss provisions dent U.S. operations
Bank of Montreal missed estimates as it once again put aside more money than analysts expected for potentially bad loans, with the provisions dragging down its United States operations.
The Toronto-based firm earned $2.64 per share on an adjusted basis in the fiscal third quarter, it said in a statement Tuesday, falling short of the $2.75 average estimate of analysts in a Bloomberg survey. Provisions for credit losses totalled $906 million for the three months through the end of July, more than the $745 million analysts had forecast.
Bank of Montreal’s credit performance has been worse than many of its peers in Canada and the U.S. even as consumers and businesses on both sides of the border have increasingly struggled to pay their bills amid an extended period of high interest rates. Tuesday’s miss comes after analysts had already adjusted their expectations for the bank following several previous quarters of higher-than-expected provisions.
The lender, Canada’s third-largest bank by market capitalization, acquired regional player San Francisco-based Bank of the West last year, significantly extending its U.S. footprint, as well as its exposure to potential credit losses in the market.
Its U.S. personal and commercial banking unit posted adjusted earnings of $539 million, down 7 per cent from the prior year, as higher credit loss provisions and a decrease in non-interest revenue were not enough to counter lower expenses.
Bloomberg.com
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