BMO Gets Boost From Trading Results Unlikely to Be Repeated Soon

Bank of Montreal’s better-than-expected results were driven partly by record earnings in its capital-markets division amid a surge in trading of fixed income, commodities and currencies in its fiscal third quarter -- a surge unlikely to be repeated soon.

“FICC in particular was very strong,” Chief Financial Officer Tom Flynn said Tuesday in a phone interview. “We really benefited from strong client flows, attractive bid-offer spreads and high level of financing activity from our clients.”

BMO Capital Markets’ profit totaled C$426 million ($323 million) in the three months through July, fueled by the trading jump as well as higher investment-banking fees. Trading revenue surged 81% to C$757 million from a year earlier, led by interest rates and commodities products. Underwriting and advisory fees rose 10% to C$287 million.

Flynn said it will probably be a while before Bank of Montreal has another such “special quarter” for capital markets.

“We feel good about the ability to grow our capital markets as a general matter over time, but we don’t expect that we’ll repeat this quarter’s performance in the next few quarters,” he said. “Things will normalize a little bit off of an extraordinarily good environment.”

©2020 Bloomberg L.P.

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