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A Bank of Montreal or BMO location in Toronto, is seen in this file photo.Deborah Baic/The Globe and Mail

Third quarter profit growth at Bank of Montreal outpaced expectations, driven higher by strong results from its Canadian retail and wealth management businesses.

Toronto-based BMO is the fourth large Canadian lender to post stronger-than-expected profit this earnings season, helped along by strong returns from its core domestic operations.

BMO earned $1.39-billion, or $2.05 per share, for the quarter that ended July 31. That was up from $1.25-billion, or $1.86 a share, earned a year earlier.

Adjusted to exclude certain items, BMO said profit climbed 6 per cent and it earned $2.03 a share. Analysts polled by Bloomberg were expecting adjusted profit of $2.00 per share.

"All of our businesses are well-positioned for continued success in the current environment and over the long term," BMO's chief executive officer Bill Downe said in a news release.

BMO held its quarterly dividend steady at 90 cents per share.

Provisions for credit losses, or money the bank sets aside to cover soured loans, fell sharply to $134-million from $257-million a year earlier. The bank attributed the steep drop to a $76-million pre-tax decrease in the collective allowance – a sum set aside to cover losses that can't yet be tied to specific credit assets.

Profit from BMO's core Canadian banking operations rose 9 per cent from a year ago, to $614-million, thanks in part to higher balances and lower loan losses. In the U.S. personal and commercial segment, which operates as BMO Harris Bank, profit of $278-million was flat compared with the same quarter last year.

In the wealth management division, profit shot up 32 per cent to $264-million on the strength of better results from both traditional wealth management and the insurance business.

But capital markets profit fell by 8 per cent to $292-million, due to lower revenue and higher expenses.

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 28/03/24 4:15pm EDT.

SymbolName% changeLast
BMO-N
Bank of Montreal
+1.35%97.68
BMO-T
Bank of Montreal
+1.13%132.25
CM-N
Canadian Imperial Bank of Commerce
+1.3%50.72
CM-T
Canadian Imperial Bank of Commerce
+1.13%68.67
NA-T
National Bank of Canada
-0.45%114.06

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