WRAPUP 1-BMO, National profits top expectations; dividends raised
By John Tilak
TORONTO May 27 (Reuters) - Canadian lenders Bank of Montreal and National Bank of Canada reported higher-than-expected quarterly profits and raised their dividends following growth in their wealth management and personal and commercial banking units.
The results on Wednesday came amid concerns that a slowdown in oil prices and sluggishness in the Canadian economy might hurt banks. With growth in the domestic business harder to come by, some have been expanding their wealth management businesses and looking for U.S. acquisitions.
The financial sector has been among the weakest performers in the Canadian equities market this year.
Shares of BMO, Canada's fourth-largest bank, fell 0.5 percent to C$77.52, while sixth-ranked National climbed 1.1 percent to C$49.90.
"These results were on balance pretty good, but I wouldn't say they are particularly robust," Edward Jones analyst James Shanahan said. "There is still some evidence of weakness within the earnings with these companies."
He cited pressure on net interest margins and exposure to rising credit costs. "I would expect loan growth to be modest here throughout the year," he added.
Net income at BMO's wealth management unit jumped 24 percent in the second quarter ended April 30, with assets under management and administration climbing 36 percent. Further support came from the U.S. personal and commercial banking business, where earnings rose 31 percent.
BMO said net income for the quarter was C$999 million ($800.93 million), or C$1.49 per share, compared with C$1.08 billion, or C$1.60 per share, a year earlier. Continued...