Bank of Montreal reports it had $1.06 billion of net income in the first quarter, up two per cent from a year earlier, as the bank cut its provisions for credit losses by nearly half.

BMO's net income amounted to $1.58 per share, before adjustments, up five per cent from a year earlier and five cents higher than analyst estimates.

Its provisions for credit losses dropped to $99 million, from $178 million a year earlier, largely as a result from improved recoveries from its impaired loan portfolio.

BMO's adjusted net income was $1.08 billion, up $54 million or five per cent from a year ago. Adjusted earnings per share rose seven per cent to $1.61, which was also ahead of analyst estimates.

The bank says that it had improved results from most of its major divisions.

Its main Canadian banking arm for consumers and businesses contributed $484 million of net income, up $37 million or eight per cent from a year earlier.


BMO's profit increased last quarter to just over $1 billion.

"We gained market share in domestic personal lending complemented by double-digit growth in both commercial loans and deposits," said Bank of Montreal chief executive Bill Downe.

Bank of Montreal's wealth management arm increased net income by eight per cent from a year earlier to $175 million.

Meanwhile, its U.S. personal and commercial banking arm saw net income fall by 15 per cent to US$153 million, although the bank says the division's adjusted net income showed an improvement.

"Margins were stable on both sides of the border, and Wealth Management and Capital Markets posted robust revenue growth."

But BMO Capital Markets saw lower net income, which fell seven per cent from a year earlier to $277 million, as the company was affected by higher expenses, lower loan recoveries and a higher tax rate.

BMO Capital's expenses increased $85 million or 16 per cent due to higher employee-related costs, including severance, and higher support costs to adapt to the business and regulatory environment.