Bank of Montreal beats profit estimates, raises dividend by 25%

December 3, 2021

TORONTO (Reuters) – Bank of Montreal closed out Canadian banks’ results season with better-than-expected fourth-quarter earnings on Friday, as strong growth across all major businesses drove adjusted earnings up 38% from a year earlier, and lifted its dividend 25%.

Canada’s fourth-largest lender increased its dividend to C$1.33 from C$1.06 in prior quarters, and said it would buy back up to 22.5 million, or 3.5%, of outstanding shares.

While BMO recovered loan-loss provisions of C$126 million ($98.19 million) during the three months ended Oct. 31, it posted strong growth even excluding that impact. Its net interest margin, excluding trading, dipped.

Adjusted pre-tax, pre-provision earnings rose 15% in its Canadian banking business, 17% in the U.S., 29% in its wealth management unit and 28% in capital markets, with revenue across the bank up 10%.

Adjusted non-interest expenses increased 6% from a year earlier, largely driven by higher employee-related costs, the bank said.

Net income excluding one-off items rose to C$2.23 billion ($1.77 billion), or C$3.33 per share, in the three months ended Oct. 31, compared with C$1.61 billion, or C$2.41 per share, a year earlier. Analysts had expected C$3.21 a share, according to IBES data from Refinitiv.

($1 = 1.2832 Canadian dollars)

(Reporting By Mehnaz Yasmin in Bengaluru and Nichola Saminather in Toronto; Editing by Shailesh Kuber and Carmel Crimmins)

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