(Reuters) - Bank of Montreal's (BMO.TO) quarterly profit rose 41 percent, topping estimates, as wholesale banking income doubled and loan-loss provisions plunged.
The company, Canada's fourth-largest bank and also a major presence in the U.S. Midwest, earned C$1.1 billion ($1.11 billion), or C$1.59 a share in the fourth quarter ended Oct 31. That compared with a year-before profit of C$768 million, or C$1.11 a share.
On an adjusted basis, the bank earned C$1.65 a share. Analysts had expected a profit of C$1.43 a share, according to Thomson Reuters I/B/E/S.
Wholesale banking income, which covers trading and investment banking, more than doubled to C$293 million as trading revenues improved from a weak quarter a year earlier.
Adjusted provisions for credit losses were C$113 million, down from C$281 million a year earlier, due to lower-than-expected losses on impaired loans acquired when BMO acquired Wisconsin lender Marshall and Illsley (M&I) last year.
BMO paid $4.1 billion for M&I, which it combined with its Chicago-based Harris Bank. BMO has set a goal of annual profit of more than $1 billion from its U.S. retail and wealth business by 2015.
Profit for the U.S. bank fell 16 percent to C$130 million, due to a reduction in certain loan portfolios and regulatory changes.
Income from BMO's flagship Canadian retail bank was unchanged at C$439 million, as higher loan volumes and fees were offset by narrower interest margins.
Canadian banks are bracing for an expected slowdown on consumer lending growth, as a cooling housing market combined with concerns about record Canadian debtloads prompts more caution among borrowers.
Reporting By Cameron French; Editing by Gerald E. McCormick and Nick Zieminski