BMO posts a 'great rebound' quarter to beat analysts' expectations

The Bank of Montreal topped analysts’ expectations in the first quarter after a series of misses as it reported higher profits from its business in the United States as well as its wealth management and capital markets segments.

BMO’s net income for the three-month period ending Jan. 31 was $2.1 billion, up from $1.29 billion during the same period a year ago, resulting in net earnings per share of $2.83.

It earned $2.28 billion on an adjusted basis, compared to $1.89 billion a year ago, resulting in adjusted earnings per share of $3.04 compared to analysts’ expectations of $2.41 per share.

“We delivered strong first-quarter performance with broad-based revenue growth,” chief executive Darryl White said in a statement.

BMO failed to meet analysts’ expectations in the last quarter due to higher-than-expected provisions for credit losses (PCL) — the amount of money banks keep aside to tackle potentially bad loans. Its PCLs back then increased to $1.5 billion, up from $446 million a year earlier, but the bank’s chief risk officer said BMO’s credit deterioration had reached a high point.

The bank reported first-quarter PCLs of $1.01 billion, up from $627 million a year ago, but down from $1.5 billion in the fourth quarter.

White said the decline in PCLs from the previous quarter was expected.

“With the strength of our deep geographic and business diversification, we are well-positioned to compete and grow in this dynamic operating environment,” he said.

Gabriel Dechaine, an analyst at National Bank of Canada, called BMO’s results a “great rebound” quarter in a note on Tuesday.

Canada’s biggest banks are releasing their first-quarter earnings results this week just days before U.S. President Donald Trump is expected to impose