BMO raises dividend, even as profits slump and loan loss provisions increase

BMO Financial Group raised its dividend as it reported its fourth-quarter profit fell compared with a year ago.

The bank said Friday it will now pay a quarterly dividend of $1.51 per share, up from $1.47 per share.

The increased payment to shareholders came as BMO said its net income amounted to nearly $1.62 billion or $2.06 per diluted share for the quarter ended Oct. 31, down from $4.48 billion or $6.51 per diluted share a year earlier.

On an adjusted basis, BMO says it earned $2.81 per diluted share in its latest quarter, down from an adjusted profit of $3.04 per diluted share a year ago.

Revenue was $8.36 billion, down from $10.57 billion in the same quarter last year.

Higher loan loss provisions

BMO's total provision for credit losses for the quarter rose to $446 million, up from $226 million a year earlier.

"Looking to 2024, we have proactively positioned the bank for future growth and are confident that our dynamic expense and capital management actions and ongoing targeted investments will drive consistent and differentiated performance," BMO chief executive Darryl White said in a statement.

BMO said its Canadian personal and commercial banking operations earned $962 million in its latest quarter, up from $917 million a year earlier, helped by an increase in revenue, due to higher net interest income and higher non-interest revenue, partially offset by higher expenses and a higher provision for credit losses.

The bank's U.S. personal and commercial banking business earned $661 million, up from $660 million in the same quarter last year.

BMO's wealth management business earned $262 million, down from $298 million a year earlier, while the bank's capital markets arm earned $489 million, up from $357 million in its fourth quarter of 2022.

The bank's corporate services group reported a loss of $757 million in its latest quarter compared with a profit of $2.25 billion a year earlier.