Marc Bruxelle
Bank of Montreal (NYSE:BMO) fiscal Q3 adjusted earnings, including severance costs and legal provisions, dropped from the previous quarter and the year-ago quarter. Excluding those items, earnings still fell shy of the Wall Street consensus.
“Record revenue in Canadian Personal and Commercial Banking and contribution from Bank of the West drove good pre-provision, pre-tax growth this quarter, and our capital and liquidity position remains strong,” said CEO Darryl White.
Adjusted EPS for the quarter ended July 31, 2023 fell to C$2.78 (US$2.04) from C$2.93 in fiscal Q2 and C$3.09 in Q3 2022.
Adjusted results in the current quarter included $162M of severance costs associated with accelerating operating efficiencies, as well as legal provisions of C$83M recorded in BMO Capital markets. The combined impact reduced EPS by C$0.34. Excluding those costs, Q3 adjusted EPS would have been C$3.12. Consensus estimate is C$3.14.
Adjusted revenue, net of CCPB, was C$8.07B (US$5.93B), compared with C$7.86B in the previous quarter and C$6.63B in the year-ago period.
Total net loans and acceptances of C$640B fell from C$645B in Q2; customer deposits increased to C$630B from C$628B in the previous quarter.
Q3 provision for credit losses of C$492M fell from C$1.02B in Q2 (which included C$517M on the purchased Bank of the West performing loan portfolio) and rose from C$136M in Q3 2022.
Q3 net interest income rose to C$4.91B from C$4.81B in the previous quarter and C$4.20B in the year-ago period.
Adjusted return on equity was 11.7% vs. 12.6% in Q2 and 13.8% in Q3 2022.
Canadian Personal & Commercial Banking adjusted net income of C$923M rose from C$864M in Q2 and fell from C$965M in Q2 2022.
U.S. P&C adjusted net income was C$653M vs. C$866M in the prior quarter and C$569M in the year-ago period.
BMO Wealth Management adjusted net income of C$304M vs. C$285M in the previous quarter and C$325M a year ago.
BMO Capital Markets adjusted net income of C$316M vs. C$388M in Q2 and C$266M in Q3 2022.
Conference call at 7:15 AM ET.