Bank of Montreal raises dividend but profit slips
(Reuters) - Bank of Montreal's (BMO.TO: Quote) quarterly profit eased 5.4 percent on lower loan recoveries at its U.S. retail bank, but core profits beat expectations and the company raised its quarterly dividend by 2.8 percent.
The bank, Canada's fourth largest bank and a major player in the U.S. Midwest, said on Tuesday it earned C$1.05 billion ($1.02 billion), or C$1.53 a share, in the fiscal first quarter ended January 31.
That compared with a year-before profit of C$1.11 billion, or C$1.63 a share, when the bank benefited from the unexpected paydown of bad loans acquired when it purchased U.S. lender Marshall & Ilsley in 2011.
But lower loan recoveries and higher benefit costs in the most recent quarter pulled the company's' net results down, offsetting profit increases in wholesale banking and wealth management.
Despite the overall profit decline, the bank boosted its quarterly dividend by 2 Canadian cents to 74 Canadian cents per share, citing its "strong capital position and the success of (its) business strategies."
On an adjusted basis, the bank earned C$1.52 a share, beating expectations of C$1.48 a share, according to Thomson Reuters I/B/E/S.
BMO is the first Canadian lender to report first-quarter 2013 results. The country's banks have been named the world's soundest for five years running by the World Economic Forum.
Profit at BMO Capital Markets, the wholesale banking unit, rose 38 percent to C$310 million, while its wealth management wing saw profit rise 56 percent to C$163 million.
Income at BMO's Canadian retail bank rose 4 percent to C$458 million, as higher loan volume offset narrower interest margins, caused by old loans renewing at current low interest rates. Continued...