BMO quarterly profit up 16%

Bank of Montreal earned $647 million in the fourth quarter, up by $87 million or 16 per cent from a year ago.

BMO, the first of Canada's major banks to report earnings this week, beat analyst expectations with the profit jump.Earnings per share hit $1.11 during the final quarter of the bank's financial year ended Oct. 31.

Revenue was up 6.3 per cent to $2.99 billion from $2.81 billion last year. At the same time, BMOwas able to trim 2.2 per cent from its expenses, CEO Bill Downe said.

"Our businesses gained strength over the course of 2009 as we have achieved strong revenue growth while keeping a firm grip on expenses," he said.

The bank'scredit loss provisions came in at $386 million, down $79 million from a year ago.

"While we expect credit losses to remain elevated into 2010, we believe that we are well positioned for further growth as the economy improves," Downe said.

In a widely expected move, the bank left its quarterly dividend unchanged at 70 centsper common share.

The bank's core Canadian personal and commercial banking unit was an internalleader, with profit of $394 million, an increase of 22 per cent from a year ago.

Separately, the bank announced plans to buy the Diners Club credit card franchise from Citigroup.

BMO declined to say what it paid for the business,but the transaction will immediately more than double its overall corporate card operation,the bank said, adding $7.8 billion US worth of transactions annually.

BMO is the largest MasterCard issuer in Canada, and Diners Club cards will continue to be issued under the MasterCard acceptance brand, the bank said.

The deal is expected to close before March 31, 2010.