Bank of Montreal (BMO,BMO.TO), first of the six big Canadian banks to report financial results, reported Tuesday a profit for the first quarter that decreased six percent from last year, despite double-digit revenue growth, reflecting higher provisions for loan losses.
Adjusted earnings per share missed analysts' expectations, while quarterly revenues topped their estimates. The company also announced an unchanged quarterly dividend.
"BMO's first quarter results reflect the impact of an unsettled environment in which we saw significant movements in oil prices, long-term interest rates and the Canadian dollar," President and CEO Bill Downe said in a statement.
BMO noted that it remains well capitalized, with Basel III common equity Tier 1 ratio at a strong 10.1 percent. The company's book value per share also increased by 10 percent from the prior quarter.
The Montreal, Canada-based company reported net income of C$1.0 billion or C$1.46 per share for the first quarter, lower than C$1.06 billion or C$1.58 per share in the prior-year quarter.
Excluding items, adjusted net income for the quarter was C$1.04 billion or C$1.53 per share, compared to C$1.08 billion or C$1.61 per share in the year-ago quarter.
On average, 14 analysts polled by Thomson Reuters expected the company to report earnings of C$1.63 per share for the quarter. Analysts' estimates typically exclude one-time items.
Total revenues for the quarter rose 13 percent to C$5.06 billion from C$4.48 billion in the same quarter last year, and topped nine Wall Street analysts' consensus estimate of C$4.44 billion.
Canadian personal & commercial banking group's net income for the quarter grew 4 percent to C$502 million, with a revenue growth of 3 percent year-over-year.
U.S. personal & commercial banking net income increased 15 percent to C$192 million from last year, and revenue edged up 1 percent, due to higher volume growth, partially offset by lower net interest margin and fee revenue.
Wealth Management net income was C$159 million. Meanwhile, BMO Capital Markets net income declined 20 percent to C$221 million from the prior year.
The provision for credit losses for the first quarter totaled C$163 million, higher than last year's C$99 million, due to lower recoveries on the purchased credit impaired loan portfolio.
"Credit performance continued to be good with higher provisions for credit losses reflecting lower recoveries compared to last year," Downe stated.
Assets under management and administration grew 43 percent from a year ago to C$852 billion, with the acquired F&C business contributing $148 billion to the increase. Excluding F&C, assets under management and administration grew 18 percent, as more new client assets were added coupled with market appreciation.
Separately, the company's board of directors declared an unchanged quarterly dividend of C$0.80 per paid-up common share, payable on May 26 to shareholders of record on May 1, 2015.
"Looking ahead, each of our operating businesses is well positioned to realize on the investments we have made over the past few years," Downe added.
BMO closed Monday's regular trading session at $61.47, down $0.30 on a volume of 1.08 million shares. On the Toronto Stock Exchange, BMO.TO closed at C$77.38, down C$0.28 on a volume of 1.51 million shares.
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