Bank of Montreal Posts Record Profit From U.S. Business

(Bloomberg) -- Bank of Montreal’s new chief executive officer, Darryl White, says he wants a greater share of earnings coming from the U.S. He’s seeing some progress.

Profit from personal-and-commercial banking in the country rose 2.3 percent in the fiscal fourth quarter to a record $222 million from a year earlier, the Toronto-based bank said Tuesday in a statement. In Canadian currency, however, it fell 2.8 percent on a weaker U.S. dollar.

Bank of Montreal has sought to expand in the U.S. Midwest since acquiring Chicago-based Harris Bank in 1984. Recent growth has come through acquisitions, including the 2015 purchase of a transportation finance business from General Electric Co. and the 2011 takeover of Milwaukee-based Marshall & Ilsley Corp., which doubled U.S. deposits and branches.

U.S. retail banking contributes about 20 percent of Bank of Montreal’s total annual profit, which rose 16 percent to C$5.35 billion ($4.23 billion) for the year ended Oct. 31. White, who became CEO on Nov. 1, has said he expects the share of business from the U.S. to increase.

The lender’s shares slipped 0.2 percent to C$99.43 at 9:42 a.m. in Toronto. The stock has advanced 3 percent this year, the worst performance in the eight-company S&P/TSX Commercial Banks Index.

Here’s a look at key numbers from Bank of Montreal’s fourth-quarter results:

  • Net income fell 8.8 percent to C$1.23 billion, or C$1.81 a share, from C$1.35 billion, or C$2.02, a year earlier on elevated reinsurance claims. Adjusted profit was C$1.94 a share, missing the C$1.98 average estimate by 13 analysts surveyed by Bloomberg.
  • The company raised its quarterly dividend 3.3 percent to 93 cents a share.
  • Revenue climbed 7.1 percent to C$5.66 billion, while noninterest expenses rose 1.4 percent to C$3.37 billion.
  • Profit from U.S. personal-and-commercial banking in Canadian currency fell 2.8 percent to C$280 million.
  • Earnings from Canadian banking rose 6.1 percent to C$624 million.
  • Wealth management and insurance had earnings of C$172 million, down 38 percent from a year earlier, after recording C$112 million in reinsurance claims. 
  • Capital markets profit fell 16 percent to C$326 million, on lower investment- and corporate-banking revenue, higher expenses and provisions.

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