The bank said Tuesday it earned $1 billion or $1.46 per share for the quarter ended Jan. 31 compared with a profit of $1.06 billion or $1.58 per share a year ago.
Revenue grew to $5.06 billion, up from $4.48 billion.
On an adjusted basis, BMO said it earned $1.04 billion or $1.53 per share for the quarter, down from $1.08 billion or $1.161 per share a year ago.
Analysts had expected an adjusted profit of $1.63 per share.
BMO said the lower adjusted profit was due to the impact of falling long-term interest rates on its insurance business, which the bank said reduced its adjusted earnings by six cents per share.
"BMO's first-quarter results reflect the impact of an unsettled environment in which we saw significant movements in oil prices, long-term interest rates and the Canadian dollar," CEO Bill Downe said in a statement.
The country's biggest banks are facing a slew of headwinds lately. The recent plunge in the price of oil is expected to hurt investment banking revenues and eventually lead to loan losses. Meanwhile, debt-strapped Canadians have become reluctant to borrow, causing growth in the banks' domestic retail operations to slow.
Barclays analyst John Aiken said BMO enjoyed "exceptionally strong growth" in the U.S., which offset lacklustre growth in its Canadian retail banking branch.
Its Canadian banking arm earned a profit of $502 million, up $17 million from a year ago, due to higher revenue and lower provisions for credit losses.
BMO's U.S. banking business earned $192 million, up $25 million from a year ago.
BMO Capital Markets earned $221 million, down from $276 million a year ago. Meanwhile, its wealth management operations earned $159 million, down from $174 million a year ago due to the change in interest rates.
Aiken said the bank's strong wealth management results were overshadowed by the impact of lower interest rates on the insurance business.
"This will likely be a consistent theme throughout the quarter, with strong traditional wealth management results but potential headwinds from insurance," Aiken said in a note to clients.
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