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BMO posts lower profit as capital markets slump

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Bank of Montreal posted a lower fourth-quarter profit on Thursday, as revenue from its capital markets business tumbled and the lender increased provisions for credit losses to brace for potential defaults in the face of a tepid economy.

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Net income, excluding one-off items, fell to $2.14 billion, or $3.04 a share, in the three-month period ended Oct. 31, from $2.23 billion, or $3.33 a share, last year.

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Analysts had estimated the company to report a profit of $3.07 per share, according to data from Refinitiv IBES.

The Canadian lender had set aside provisions of $226 million in the reported quarter, compared with a release of $126 million last year.

Still, BMO recorded a 30 per cent surge in profit from its U.S. personal and commercial business. Peers Royal Bank of Canada and National Bank of Canada posted a 5 per cent and 13 per cent jump, respectively, in their personal and commercial businesses on Wednesday.

Last month, BMO had also booked a charge of $1.12 billion after a U.S. jury found its local unit liable for more than $550 million in damages in relation to a Ponzi scheme operated by a Minnesota businessman.

© Thomson Reuters 2022

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