Bank of Montreal shares fall after disappointing earnings in US unit

 
City A.M. Reporter
QUARTERLY earnings at Bank of Montreal rose one per cent due to stronger wealth management profit, Canada’s No 4 bank said yesterday, but its shares fell on the back of a sluggish performance at its US Harris Bank unit.

Shares of BMO, the first Canadian bank to report fiscal fourth-quarter results, were down 3.7 per cent at mid-morning, making BMO the weakest performer among financial stocks on the Toronto Stock Exchange’s benchmark index.

Excluding items such as C$37m in integration costs from the 2011 purchase of Wisconsin lender Marshall & Illsley, adjusted profit was C$1.1bn, or C$1.64 a share.

Earnings at BMO Harris Bank fell 28 per cent to $102m, which its parent attributed to weaker revenue and higher-than-normal commercial loan-loss provisions.

Wealth management profit nearly doubled to C$312m from C$164m, helped by the C$121m securities gain. Analysts said the division’s results were strong even excluding the gain as assets under management rose by 14 per cent.

On a net basis, profit rose to $1.09bn, or C$1.62 a share, in the fourth quarter, ended 31 October, from C$1.08bn, or C$1.59 a share, a year earlier.

The bank raised its quarterly dividend by 2.7 per cent to 76 Canadian cents a share, as expected, and also renewed a normal course issuer bid that will allow it to buy back up to 2.3 per cent of its public float over the next year.

The bank raised its quarterly dividend by 2.7 per cent to 76 Canadian cents a share, as expected, and also renewed a normal course issuer bid that will allow it to buy back up to 2.3 per cent of its public float over the next year.

Profit at BMO Capital Markets, the bank’s brokerage unit, dropped 27 per cent to C$229m.