BMO’s third-quarter profit climbs to $1.25 billion

The Bank of Montreal, the first of Canada’s big banks to report its third-quarter results, saw profits grow by four per cent in what one analyst says could be a signal that concerns over rising loan losses in the oilpatch may be overblown.

Last year, BMO reported net income of $1.19 billion during the comparable three-month period ended July 31.

On a per share basis, BMO’s earnings amounted to $1.86, compared with $1.80 per share during the same period last year.

We had good performance across our operating groups, particularly in personal and commercial banking and BMO Capital Markets,” CEO Bill Downe said in a statement.

“Our performance year to date reflects our focus on the customer and strong operating discipline.”

Downe also hinted that the bank is eyeing acquisition opportunities. After adjustments, BMO had a quarterly profit of $1.30 billion, or $1.94 per share, compared with $1.23 billion, or $1.86 per share, a year ago. Provisions for credit losses climbed to $257 million during the quarter, up from $160 million during the same quarter last year.

Barclays analyst John Aiken said that if BMO’s results are any indication of how other banks have fared, that will likely “take some of the wind out of the sails” of bearish investors ringing the alarm about oilpatch-related loan losses.

“Generally, BMO reported a solid quarter with few areas that we can poke holes in,” Aiken said in a note to clients.

“While energy-related provisions were up sequentially (from the second quarter), BMO is simply playing a bit of catch-up and there did not appear to be any significant deterioration in the domestic consumer portfolio.”

BMO’s earnings will be followed by Royal Bank (TSX:RY) on Wednesday and CIBC (TSX:CM) and TD Bank (TSX:TD) on Thursday. Scotiabank (TSX:BNS) is scheduled to report next Tuesday and National Bank (TSX:NA) wraps up the earnings parade on Aug. 31.