BMO, Scotiabank report revenue bump in 3rd quarter

The Bank of Montreal has reported improved net earnings and revenue for the third quarter that beat analysts' expectations while Scotiabank has increased its quarterly dividend by two cents to 62 cents per share even as the bank reported a decline in third-quarter net income and a slight rise in revenue.

The two banks were the first to report their third-quarter earnings Tuesday. The Royal Bank, Toronto-Dominion Bank and CIBC were expected to report their results on Thursday.

BMO, which left its dividend unchanged, said net income was $1.137 billion, or $1.68 cents per share, up from $970 million, or $1.42 per share, in the same period a year ago.

Revenue rose to $4.05 billion from $3.88 billion.

Adjusted net income was $1.136 billion, or $1.68 cents per share, versus $1.013 billion, or $1.49 cents per share, a year ago.

Analysts surveyed by Thomson Reuters were expecting $1.52 in adjusted earnings per share and revenue of $3.96 billion.

'Disciplined growth strategy'

Provisions for credit losses fell to $77 million from $237 million a year ago, with adjusted provisions for credit losses declining to $13 million from $116 million.

BMO has been focusing on cost controls to help weather the recent wave of sluggish consumer lending, and president and CEO Bill Downe said the third-quarter results "reflect the benefits of our disciplined growth strategy."

"Canadian retail businesses were particularly strong in the quarter with both personal and commercial banking … and traditional wealth earnings reaching new highs," he said.

"Looking forward, we see opportunities for growth in each of our businesses in an improving North American economy led by the United States, and this gives us confidence we're well positioned heading into 2014.

The bank has more than 46,000 employees across its North American operations, which include retail banking, wealth management and investment banking, as well as the Chicago-based Harris Bank subsidiary.

BMO shares added 27 cents to $66.05.

Scotia Plaza sale boosts Scotiabank earnings

Scotiabank, meanwhile, said net income in the quarter was $1.768 billion, or $1.37 per diluted share, compared with net income of $2.051 billion, or $1.69 per diluted share, in the same period a year earlier.

Revenue rose to $5.52 billion from $5.51 billion, and the bank raised its quarterly divided by two cents to 62 cents per share.

Canada's most international bank noted that last year's results benefited from an after-tax gain of $614 million on the sale of Scotia Plaza in Toronto, equivalent to 53 cents per share.

The most recent quarter included a net benefit of seven cents per share related to non-recurring items in international banking, including a gain on the sale of a subsidiary by an associated corporation.

Scotiabank says that adjusting for both these items, diluted earnings per share grew 12 per cent.

Scotiabank stock fell 98 cents or 1.67 per cent to $57.71.

National Bank analyst Peter Routledge said the results were close to what he expected, but international operations fell short of expectations.

"It wasn't like it was a disaster," he said. "It was a good quarter, but a lot less good than we had hoped."