Bank of Montreal reported slightly weaker net income for the first quarter ended January 31.

BMO managed a $372 million profit in the quarter, down from $416 million in the first quarter of last year. Excluding non- recurring items in the first quarter of last year, net income was down $31 million. However, because of the favourable effect of last year’s share buyback programs, returns to shareholders improved as diluted earnings per share increased by 1¢.

“Results reflect a solid quarter and a good start to the year,” said Tony Comper, chairman and CEO. “Loan losses were up compared to the first quarter of 2001, but are expected to decrease for the full year. Taking this into account, financial performance is on the upswing.”

Personal and Commercial Client Group performance improved from the first quarter of last year due to solid volume growth in Canada and continued strong growth in the U.S. It was up 10%. Investment banking net income rose just 2% from last year due to reduced expenses and continued momentum in interest rate-sensitive businesses, however uncertain economic conditions continue to affect its fee-based businesses. Private Client Group net income was up 14% year over year, even though challenging market conditions continue to affect trading volumes.

The bank’s outlook for fiscal 2002 continues to anticipate cash earnings per share for the first six months to approximate comparable amounts for the first six months of 2001, excluding non-recurring items. The outlook also continues to anticipate that cash earnings per share growth in the second six months will improve from the first half of the year. The outlook for the year now anticipates that the provision for credit losses will remain at the high end of the 40 to 50 basis point target range.

It says that, the Canadian and U.S. economies are expected to gradually strengthen over the balance of this year following a short and shallow downturn in 2001. Interest rates in Canada and the United States are expected to remain relatively stable in the first half of the year, but may increase in the second half. BMO says that it is likely that capital markets activity will increase with a strengthening economy.