Bank of Montreal eyes deals after earnings beat forecasts

Tue Aug 23, 2016 4:12pm EDT
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By Matt Scuffham

TORONTO (Reuters) - Bank of Montreal (BMO.TO: Quote) said on Tuesday it would continue to look for acquisitions after reporting quarterly results which beat analysts' expectations, benefiting from strength in its U.S. commercial banking business.

Canada's fourth-largest lender has expanded in the United States to help counter sluggish growth in its domestic market. The bank recently acquired General Electric Co's (GE.N: Quote) transportation finance business in the U.S. and Canada and agreed to buy advisory firm Greene Holcomb Fisher in June this year.

"We maintain an active dialogue across a wide range of opportunities at all times when our capital is building and when it's in the area where we have the most flexibility. It's so often driven by where opportunity arises," Chief Executive Officer Bill Downe told investors after the bank reported third-quarter results.

The bank's core tier 1 ratio, a key measure of its financial strength, rose to 10.5 percent, up 50 basis points from the second quarter and the increase potentially gives it more firepower for acquisitions.

Downe said it would maintain its discipline around price when assessing deals and cautioned that nothing was imminent.

"If we have the opportunity to expand within footprint or adjacent to footprint in things that are complimentary to our business, we'll pursue it," he said.

Bank of Montreal said earnings per share, excluding one-off items, rose 4 percent to C$1.94 in the third quarter compared with a year ago. Analysts on average forecast earnings of C$1.81, according to Thomson Reuters I/B/E/S.

Shares in the bank were trading at C$86.43 at 1550ET, up 2.4 percent.   Continued...

The logo for the Bank of Montreal is seen at its branch Toronto, March 5, 2013. REUTERS/Mark Blinch