Bank of Montreal branch

Bank of Montreal profit increased 12 per cent in the last quarter. (Darryl Dyck/Canadian Press)

Bank of Montreal raised its dividend Wednesday as it reported an improved second-quarter profit of $1.1 billion, helped by its Canadian personal and commercial banking business.

The bank said it will raise its quarterly payment to shareholders by two cents to 78 cents per common share.

BMO's profit amounted to $1.60 per share for the quarter, up from $962 million or $1.40 per share in the same quarter of 2013.

Adjusted earnings per share were $1.63, up 13 per cent from the same quarter last year, and beating analysts' expectations of $1.53.

BMO said its return on equity was 14.3 per cent compared with 14.2 per cent year-over-year.

Provisions for credit losses was $261 million in the quarter, down from $322 million in the same quarter last year.

"Our largest business, Canadian personal and commercial banking, had net income growth of 14 per cent year over year and operating leverage above two per cent for the third consecutive quarter," CEO Bill Downe said in a news release on Wednesday.

Net income for the personal and commercial banking segment was $480 million, up $59 million year-over-year.

Downe also said the bank's wealth management and BMO Capital Markets segments both posted double-digit revenue and earnings growth. The bank's wealth management net income was $194 million, an increase of $54 million or 38 per cent from the same quarter a year ago.

In the United States, BMO's personal and commercial banking segment had lower net income of US$140 million, down $8 million or six per cent from the second quarter a year ago, impacted by fewer new mortgages.

BMO is the fifth of the big banks to report its quarterly earnings and all have beaten expectations on adjusted earnings per share.

National Bank reported its results after the markets closed on Tuesday and had a second-quarter net income of $362 million, down 13 per cent from a year ago. On an adjusted basis, earnings were $1.05 a share, a penny higher than analyst estimates. However, revenue of $1.28 billion missed expectations of $1.34 billion. National Bank also raised its quarterly dividend.