Bank of Montreal is reporting increased earnings for the third quarter. It earned net income of $444 million, cash-based earnings per share of $0.88 and a cash-based return on equity of 17.8 per cent for its third quarter ended July 31, 2001.

“Excluding non-recurring items, cash-based earnings per share increased 24 per cent from the third quarter of last year, largely driven by higher earnings in the Investment Banking Group as well as improved results in the Personal and Commercial Client Group,” says Tony Comper, chairman and CEO. “Investment Banking Group results rose strongly, demonstrating the Group’s ability to perform well in a difficult capital market environment.

“The improved earnings in our Personal and Commercial Client Group reflected volume growth in our Canadian and U.S. network. The Private Client Group, which continues to build distribution capability that will ensure future success, shared in the industry-wide decline in client-trading volumes,” says Comper.

Net income for the Investment Banking Group was $163 million in the third quarter, a $28 million or 20% increase over the same period last year, reflecting improved performance in interest-rate-sensitive businesses and in client-driven trading activities.

Personal and Commercial Client Group results, excluding non-recurring items, were $13 million higher than in the third quarter of last year, as the Bank improved revenues from volume growth in Canada and the United States, while maintaining spreads. Revenue increases were partially offset by a 5% increase in expenses from the same period last year, associated with
the Group’s continued investment to support future growth.

In the third quarter, the Private Client Group remained focused on its long-term strategy – expansion of its distribution network, expansion of the U.S. wealth management business and leveraging its relationships across the full range of the Bank’s products and services. The Group’s financial performance was significantly affected by lower client-trading volumes and continuation of deteriorating market conditions and equity values. Net income in the third quarter declined to $29 million, from $44 million in the same
period last year.

Bank of Montreal invites interested investors to the conference call to review the third quarter’s results on Tuesday August 28, 2001 at 2:00 p.m. (EDT). The conference call can be accessed in a listen-only mode on the Internet.