BMO profit dips 3% as loan losses and restructuring costs mount
First big bank to report earnings this quarter shows lower profits
The Bank of Montreal's second quarter profit fell to $973 million, down three per cent from a year ago, as it took a restructuring charge and set aside more money for bad loans.
The bank reported $999 million of net income during the same quarter last year.
The earnings amounted to $1.45 per share, down from $1.49 per share a year ago.
BMO's net income included a $132 million restructuring charge related to technological changes — higher than the $106 million restructuring costs it reported during the same quarter last year.
Provisions for credit losses grew to $201 million during the quarter, from $161 million a year ago, largely due to an uptick in resource-related provisions at BMO Capital Markets.
"In the quarter, we were encouraged to see a more positive tone in the market environment for interest rates, currencies and commodities, while economic fundamentals remain healthy," CEO Bill Downe said in a statement.
"Our capital position is strong and we are progressing with the work of further differentiating the bank through our digital platforms while driving efficiency and growing customer loyalty as our first priority."
On an adjusted basis, BMO earned $1.152 billion, or $1.73 per share, up from $1.146 billion, or $1.71 per share, a year ago.
Revenue increased to $5.10 billion, from $4.53 billion during the second quarter of last year.
BMO also announced its quarterly dividend will go up by two cents to 86 cents per share, effective Aug. 26, 2016.