Bank of Montreal Q4 profit rises 13%, dividend going up, share buyback planned

TORONTO – Bank of Montreal (TSX:BMO) says its fourth-quarter net income rose 13 per cent from last year to $1.214 billion, beating analyst estimates by a wide margin and taking the total for the 2015 financial year to $4.405 billion.

The profit for the three month period equalled $1.83 per BMO common share, or $1.90 on an adjusted basis — up 17 per cent in both cases. Analysts had estimated $1.70 per share of net income and $1.74 per share of adjusted profit.

“These results reflect the benefits of our diversified business mix, with Canadian and U.S. banking and wealth management all contributing to the bank’s growth,” BMO chief executive Bill Downe said in a statement Tuesday.

BMO’s Canadian banking arm contributed $560 million of net income for the three months ended Oct. 31, up seven per cent from last year, while its U.S. banking arm provided $207 million of net income, up 23 per cent.

Its wealth management and capital markets segments also grew. Net income from wealth management was $243 million, up eight per cent from last year, while BMO Capital Markets had $242 million of net income, up 27 per cent.

BMO also reduced its total provision for credit losses by $42 million from a year ago, to $128 million, in part because of lower provisions at its Canadain arm.

The bank says it will raise the dividend on its common shares by two cents to 84 cents, payable on Feb. 26, and buy back up to 15 million shares from the public market starting Feb. 1.

For the full year ended Oct. 31, Bank of Montreal’s Canadian personal anc commercial arm generated net profit of $2.104 billion, up 4.4 per cent, U.S. banking generated US$659 million of net profit, up 10.4 per cent, wealth management generated $850 million, up 8.8 per cent, and BMO Capital slipped 4.2 per cent to $1.03 billion.