BMO hikes dividend to 80 cents despite flat profit of $1.07B

Bank of Montreal has kicked off the industry's fourth-quarter earnings season with a weaker profit than analysts were expecting and plans to increase its dividend in the new year.

The bank said it had $1.07 billion of net income in the fourth quarter of its 2014 financial year, essentially unchanged from a year earlier.

On an adjusted basis, BMO had $1.111 billion of earnings or $1.63 per share — five cents below estimates of $1.68 per share.

The bank also announced that its quarterly dividend will be going up by two cents to 80 cents per per common share with the first-quarter payment on Feb. 26, 2015.

BMO said its main Canadian banking operations showed strong performance, with net income and adjusted earnings up about 14 per cent over the same time last year, but that was partially offset by a decline at its BMO Capital Markets business.