BMO posts net income of C$1.62bn for the quarter to end October compared with C$4.48bn for the year ago quarter. The earnings are impacted by a sharp rise in provision for credit losses. They rise from C$226m in the year ago quarter to C$446m.

For the full fiscal, BMO posts net income of C$4.38bn compared with C$13.5bn in fiscal 2022. Provision for credit losses rise from C$313m to C$2.18bn.

BMO completed the acquisition of Bank of the West from BNP Paribas in February. The acquisition strengthens BMO’s position in the Western and Midwestern regions of the US. BMO completed the conversion of Bank of the West customer accounts and systems to the BMO operating platforms in September. The acquisition has been reflected in its results. In addition, BMO completed the acquisition of the Air Miles Reward Program business of LoyaltyOne in June.

Integration costs rise

In the fourth quarter, BMO had after-tax acquisition and integration costs of C$433m, up from C$145m a year earlier. On the other hand, BMO now forecasts pre-tax cost savings of C$800m from the acquisition, up from its prior estimate of C$670m.

“Our results this year reflect the fundamental strength and diversification of our businesses,” said Darryl White, CEO, BMO.

“Driven by record revenue and ongoing momentum in Canadian Personal and Commercial Banking and the contribution of Bank of the West, we delivered strong performance in a challenging economic backdrop. This year, we made significant progress against our strategic priorities to continue to grow and strengthen our bank. We completed three notable acquisitions, advancing our Digital First capabilities and delivering interconnected One Client experiences. With the successful conversion of Bank of the West, BMO is the most integrated north-south bank on the continent.”

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By GlobalData

Canadian Personal & Commercial

The unit reports net income of C$962m, up 5% from the year ago quarter. The results reflect a 13% increase in revenue, due to higher net interest income driven by higher balance growth and margins, and higher non-interest revenue. This is partially offset by higher expenses and a higher provision for credit losses. US personal and commercial reported net income is flat in the fourth quarter at C$661m. The impact of the stronger US dollar increased net income by 1%.

Wealth management net income drops by 12%

Fourth quarter wealth management reported net income is down by 12% to C$262m. The inclusion of Bank of the West and higher revenue from growth in client assets was more than offset by higher underlying expenses. Insurance net income was C$50m, down 36% from the prior year. This is primarily due to unfavourable market movements in the current year relative to favourable market movements in the prior year.

BMO capital markets reported net income rises by 37% y-o-y to C$489m.

Results reflect revenue growth of 19%, with higher revenue in both Global Markets and Investment and Corporate Banking. This is partially offset by higher expenses and a higher provision for credit losses, compared with a recovery in the prior year.