(November 23 – 11:00 ET) – Bank of Montreal is reporting net income of $1.38 billion for the year ended October 31, up just 2.4% from 1998. On a per share basis, earnings were up just 1.3%. Return on equity was down to 14.1% from 15.2% last year.
After strong profit gains announced at TD Bank and Royal Bank, BMO’s results do not impress. Nevertheless it is still in the midst of instituting value-based management and falling under new chief executive, Tony Comper’s technology-heavy vision.
BMO says its earnings growth was offset by a higher, more normal, provision for credit losses and one-time restructuring charges. While its business volumes are up across most lines, margins are thinning. The bank’s Chicago-based, Harris Bank unit, and its investment banking divisions, whose net income improved by 24.9%, are credited with boosting performance.
BMO’s wealth management division saw a 15.2% decrease in earnings. Revenues slipped as a “result of reduced commission revenue from full-service investing and a decline in trading returns and management fees in the retail managed futures and deposit programs”. Yet expenses increased “due to costs incurred to support business growth across the Private Client Group, particularly retail investment products and direct investing”.
The Personal and Commercial Client Group saw net income increase 16.9% from 1998.
-IE Staff
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