Higher provisions for credit losses fuelled a weaker year-over-year performance
Bank of Montreal posted a drop in its profits for 2023’s opening quarter, mainly due to higher provisions for credit losses compared with the previous year amid an uncertain economic climate.
The banking giant set aside $217 million during Q1, with adjusted net income of $2.27 billion ($3.22 per share) falling from $2.58 billion ($3.89 per share) the same time last year.
The beginning of February saw BMO conclude a US$13.8 billion deal to purchase Bank of the West from BNP Paribas, with the acquisition set to be reflected in financial results for the next quarter.
BMO’s Canadian P&C division saw a slight drop (2%) in adjusted net income to $980 million, down $24 million from the previous year, with higher expenses and credit loss provisions cancelling out balance growth and larger net interest margins.
Adjusted net income on the wealth management side fell by $38 million (12%) over Q1 2023, with the Capital Markets division seeing reported net income slip by 29% compared with the same time last year (by $202 million to $510 million).
BMO CEO Darryl White described the start to the year as a “very good” one, underpinned by “continued strong operating performance in our Canadian and US personal and commercial businesses and improving momentum in BMO Capital Markets.”
