UPDATE 2-Bank of Montreal misses estimates, charges squeeze profit
* Narrower interest margins also hit bottom line
* Adjusted EPS C$1.46 vs estimate C$1.49
* Shares down 2.5 percent
* Three of four Canadian banks have disappointed in Q2
By Cameron French
May 29 (Reuters) - Bank of Montreal's second-quarter profit fell a steeper-than-expected 5 percent, the bank said on Wednesday, due to narrowing interest margins on its Canadian loans and one-time charges.
After the results, the latest in a generally disappointing quarter for the Canadian banking sector, shares dropped by 2.5 percent at C$62.09. It was the weakest Canadian financial stock in early trading.
Canada's banks have been named the soundest in the world five years running by the World Economic Forum, but have begun to feel the effects of a slowing domestic housing market and rock-bottom interest rates that squeeze profits on their existing loan book.
"There's been a lot of talk ... about a slowing Canadian consumer, and we're seeing that evident in the results reported to date. That is an area of concern for the bank," said Jeff Bradacs, portfolio manager at Manulife Asset Management, which owns BMO shares. Continued...