Bank of Montreal 4Q Profit, Revenue Down as Costs, Provisions Drag

By Adriano Marchese

Bank of Montreal reported lower profit and revenue in its fiscal fourth quarter, weighed down by costs, provision for credit losses, and the inclusion of Bank of the West results in the current period.

For the three months ended Oct. 31, the Canadian financial institution posted net income of 1.62 billion Canadian dollars ($1.19 billion), or C$2.06 a share, down from C$4.48 billion, or C$6.51 a share, in the comparable quarter a year ago.

Bank of Montreal booked a number of charges in the period, including C$433 million in acquisition and integration costs for Bank of the West, amortization of acquisition-related intangible assets, as well as costs associated with a lawsuit with a predecessor bank, M&I Marshall and Ilsley Bank.

Adjusted earnings, which strips out these one-off costs and items, fell to C2.81 a share, shy of analyst forecasts of C$2.87 a share, according to FactSet.

Revenue also declined, reaching C$8.36 billion from C$10.57 billion. Analysts had expected a bigger drop in revenue in the period, pegging the figure at C$8.26 billion.

Among its main segments, Canadian personal and commercial reported a 5% decline in net income to C$962 million, while south of the border, U.S. personal and commercial net income rose by C$1 million to C$661 million, largely due to the stronger U.S. dollar.

BMO Capital Markets reported a notable increase in net income, rising 37% to C$489 million.

Provision for credit losses, which are provisions that the bank sets aside to cover bad or uncollected debt, virtually doubled. Bank of Montreal's total for the period rose to C$446 million from C$226 million.

Common equity tier 1 ratio, a measurement of a bank's core capital compared with its riskier assets such as loans and mortgages, was 12.5% compared with 16.7%.

Write to Adriano Marchese at adriano.marchese@wsj.com

(END) Dow Jones Newswires

December 01, 2023 06:40 ET (11:40 GMT)

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