UPDATE 3-BMO profit tops estimates on wealth management, domestic loans

Tue Feb 25, 2014 3:54pm EST
 
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* Strong results despite lower profit at U.S. bank unit

* BMO's domestic retail banking steady despite housing market worries

* Shares up slightly; more banks to report this week

By Cameron French

TORONTO, Feb 25 (Reuters) - Bank of Montreal reported higher-than-expected quarterly earnings on Tuesday on strong wealth management and domestic banking profits, and executives said they expect the uneven performance of BMO's U.S. unit to eventually improve.

Profit from BMO's Canadian retail banking operation rose 8 percent to C$484 million ($436.90 million) in the first quarter ended Jan. 31, with loan growth of 10 percent more than offsetting narrower interest margins.

"Growth in the domestic bank was better than my expectations," said Edward Jones analyst Tom Lewandowski.

Canada's No. 4 bank has fought to increase its share of the domestic mortgage market over the past few years, offering low-rate loans that have sometimes spurred price wars with the other banks.

All told, quarterly net profit was C$1.06 billion or C$1.58 a share, up from C$1.04 billion, or C$1.51 a share, a year earlier.   Continued...