Positive operating leverage and pre-tax growth drive results
BMO Financial Group reported strong second-quarter financial results, with a significant increase in net income compared to the same period last year.
The bank revealed net income of $1.866 billion ($2.36 per share) on a reported basis, and adjusted net income of $2.033 billion ($2.59 per share) for the quarter ended April 30.
Compared to the same quarter last year, BMO's adjusted net income decreased from $2.186 billion while adjusted earnings per share declined from $2.89.
CEO Darryl White attributed the strong performance to robust growth in Canadian personal and commercial banking, as well as a rebound in the bank's capital markets and wealth management businesses.
"We've delivered on our commitments with expenses down, compared with last year and last quarter," White said in the company’s earnings report.
BMO's earnings were driven by a combination of factors, including higher net interest income, lower provision for credit losses and expenses compared to the previous year and quarter.
Provisions for credit losses were $705 million in the quarter, down from $1.023 billion a year earlier on a reported basis. Adjusted for certain items, provisions were up $318 million from last year.
White highlighted BMO's balance sheet strength, evident in a 13.1% Common Equity Tier 1 capital ratio, solid customer deposit growth, and "appropriate provisioning for the credit environment."
BMO declared a quarterly dividend of $1.55 per common share, up 5% from the prior year and a 3% increase from the previous quarter.
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Looking ahead, White said it is focused on long-term growth, citing momentum in its US segment and execution of its "proven" US growth strategy focused on a "One Client approach."
The bank is also investing in technologies to improve customer experience.
“We're building on a powerful platform that delivers competitive and differentiated products, advice and digital tools across our North American footprint,” said White.
“This quarter, BMO was ranked among Fast Company's list of the World's Most Innovative Companies of 2024, the only Canadian and US bank recognized out of more than 600 winning organizations – a recognition of the tangible outcomes of our investment in the innovative technologies that make banking easier for our customers.”
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