BMO hikes dividend by 25%
All of Canada's big banks have raised their dividends this week
BMO Financial Group raised its quarterly dividend 25 per cent and beat expectations as it reported a fourth-quarter profit of nearly $2.2 billion, up from nearly $1.6 billion in the same quarter last year.
The bank said Friday it will now pay a quarterly dividend of $1.33 per share, up from $1.06. It also plans to buy back up to 22.5 million of its shares.
BMO says its profit amounted to $3.23 per share for the quarter ended Oct. 31, up from $2.37 per diluted share in the same quarter last year. Revenue totalled $6.6 billion, up from nearly $6 billion a year ago.
On an adjusted basis, BMO says it earned $3.33 per diluted share, up from an adjusted profit of $2.41 per diluted share in the same quarter last year.
Analysts on average had expected an adjusted profit of $3.21 per share, according to estimates compiled by financial markets data firm Refinitiv.
"We delivered another quarter of strong performance with positive operating leverage in each of our diversified businesses, contributing to strong earnings for fiscal 2021," BMO chief executive Darryl White said in a statement.
"Looking ahead to 2022, we will continue to position BMO for growth with the ensuing economic recovery. We are making targeted investments in technology and talent to drive enhanced customer experiences and deliver market-leading advice to help them make real financial progress."
All six of Canada's big banks have raised their dividends and announced plans to buy back large numbers of their shares this week as they reported their fourth-quarter results.
The increased payments to shareholders follow a decision by the federal banking regulator last month to lift restrictions on dividend increases, share buybacks and executive compensation that were put in place at the start of the pandemic.
In its fourth quarter, BMO posted a $126-million reversal of its provisions for credit losses compared with the $432 million it set aside for bad loans in the same quarter last year.
BMO said its Canadian personal and commercial banking business earned $921 million in the fourth quarter, up from $647 million a year earlier, while its U.S. personal and commercial banking operations earned $512 million, up from $324 million.
The bank's wealth management business earned $369 million, up from $320 million in the same quarter last year, while its capital markets arm earned $536 million, up from $379 million.
BMO said its corporate services group lost $179 million in the fourth quarter, compared with a loss of $86 million in the same quarter last year.