NYSE:BMO) is a Canadian multinational investment bank and financial services company. Toronto, Canada – May 26, 2024.” data-id=”2156278577″ data-type=”getty-image” width=”1536px” height=”1024px” > Lumos Ajans/iStock Editorial via Getty Images
Bank of Montreal’s (BMO) stock dipped 2.5% in Tuesday premarket trading after the Canadian bank’s fiscal Q3 earnings fell short of the average analyst estimate as its provision for credit losses climbed.
Q3 adjusted EPS of C$2.64 (US$1.96), lagging the Visible Alpha consensus of C$2.82, rose from C$2.59 in the previous quarter and dropped from C$2.94 in the year-ago period.
Adjusted revenue for the quarter ended July 31, 2024, rose 3% Q/Q to C$8.21B and was essentially flat vs. the year-ago period.
“While the cyclical increase in credit costs has resulted in loan loss provisions above our historical range, performance has been supported by operating momentum across our diversified businesses, including continued revenue growth in Canadian Personal and Commercial Banking and stronger client activity in our market-sensitive businesses,” said CEO Darryl White.
BMO’s (BMO) Q3 adjusted net interest income of C$4.81B rose from C$4.53B in Q2 and slipped from C$4.91B in Q3 2023. Adjusted net interest margin of 1.83% ticked up from 1.82% in the prior quarter and dipped from 1.92% a year ago.
Its provision for credit losses grew to C$906M from C$705M in Q2 and C$492M in Q3 2023.
Gross impaired loans ratio of 0.89% vs. 0.79% in the prior quarter and 0.44% a year ago.
Adjusted noninterest expenses of C$4.70B rose from C$4.63B in Q2 and fell from $4.95B in Q3 2023.
Average gross loans and acceptances of C$669.3B increased from C$657.1B in the prior quarter and C$644.7B a year ago. Average customer deposits of C$688.3B climbed from C$672.2B in Q2 and C$629.2B in Q3 2023.
Canadian Personal & Commercial Banking adjusted net income of C$920M rose 5% Q/Q and 3% Y/Y.
U.S. Personal & Commercial Banking adjusted net income of US$395M (C$539M) dropped 12% Q/Q and 9% Y/Y.
BMO Capital Markets adjusted net income of C$394M fell 16% Q/Q and jumped 31% Y/Y. Global Markets revenue increased 16% Y/Y to C$1.00B, primarily on higher interest rates and equities trading revenue. Investment and Corporate Banking revenue of C$666M rose 2% Q/Q and 11% Y/Y due to higher underwriting and advisory revenue and corporate-banking-related revenue.
BMO Wealth Management adjusted net income of C$364M increased 13% Q/Q and declined 8% Y/Y.
Earlier, BMO Financial non-GAAP EPS of C$2.64, revenue of C$8.19B.
