BUSINESS

BMO Earnings Rise: Bank Of Montreal Quarterly Profits Beat Analyst Estimates

05/25/2011 03:46 EDT | Updated 11/16/2011 06:04 EST
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(CBC) -- BMO kicked off bank earnings season Wednesday by reporting better-than-expected second-quarter profits as the steadily improving economy allowed it to set aside less to cover bad loans.

Bank of Montreal said its quarterly profits jumped $55 million to $800 million. Adjusted earnings were $1.35 a share, which topped analysts expectations by four cents a share.

"We are encouraged by the generally improving trend we are seeing with respect to loan losses and our rising return on equity, which reached 16.7 per cent in the quarter on a very strong capital base," CEO Bill Downe said in a statement.

"As we see the signs of a business-led recovery in both Canada and the United States, we believe that banks like ours have a unique institutional responsibility to play in that recovery," he said.

BMO 3-month stock chart

The bank trimmed its provisions for loan losses to $145 million, down 42 per cent from the $249 million it set aside in the same quarter a year ago.

Quarterly revenues rose 5.5 per cent to $3.22 billion.

The bank held its quarterly dividend steady at 70 cents a share, which at the current stock price generates a yield of 4.60 per cent..

BMO shares closed Tuesday at $61.50.