BMO profit up 14% in modest quarter for banks

Bank of Montreal said its fourth-quarter profit jumped 14 per cent, capping a modest quarter for the country's biggest banks, whichposted mixed results.

The country's fourth-biggest bank by assets said Tuesday it earned $739 million, or $1.24 a share, for the quarter, up from $647 million, or $1.11 a share, in the same period a year ago. Revenue increased eight per cent to $3.23 billion.

Analysts were expecting, on average, $1.23 a share and revenue of $3.08 billion.

Provisions for credit losses in the quarter were $253 million, down $133 million from a year earlier, while return on equity rose to 15.1 per cent, from 14 per cent a year ago.

Still, the bank kept it dividend unchanged at 70 cents a share.

For the year, the bank said it earned $2.81 billion, or $4.75 a share.

Barclays Capital analyst John Aiken said the bank's provisions forbad loans were a disappointment for the quarter, but not a major concern.

"While BMO did suffer similar expense growth as its peers, it was lower than the group, and the bank was able to offset it with strong revenue growth," Aiken wrote in a note to clients.

"Capital markets and private client had stand-out quarters, and although retail banking on both sides of the border [were steady], they did both report modest sequential declines in earnings."

Mixed results

Canada's five biggest banks earned a combined $4.45 billion profit in the fourth quarter marginally higher than in the same period last year as weakness in corporate financing and trading revenues outshone strength in consumer banking.

While profits were above the $4.44 billion in the fourth quarter last year, the overall results were further evidence that it will be some time before the banks return to the blockbuster profit growth they enjoyed before the recession.

One of the more stellar performers was National Bank of Canada which raised its dividend, though it is considered the sixth biggest bank in the country and is considerably smaller than its major brethren.

Royal Bank of Canada was widely considered the most significant underperformer, as it disappointed investors with its quarterly report and missed analyst expectations by a wide margin. TD Bank also fell short of average estimates.