We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Bank of Montreal (BMO) Stock Dips as Q3 Earnings Decline Y/Y
Read MoreHide Full Article
Shares of Bank of Montreal (BMO - Free Report) have lost 3.2% since the announcement of its third-quarter fiscal 2022 (ended Jul 31) results. Adjusted net income of C$2.13 billion ($1.66 billion) declined 7% year over year.
BMO recorded marginally higher revenues in the reported quarter. A rise in loans and deposit balances supported the results. However, an increase in expenses was the undermining factor.
After considering non-recurring items, net income was C$1.37 billion ($1.06 billion), down 40% from the prior-year quarter.
Total revenues (on an adjusted basis), net of insurance claims, commissions and changes in policy benefit liabilities (CCPB), were C$6.63 billion ($5.15 billion), up marginally year over year.
Net interest income grew 19.2% year over year to C$4.20 billion ($3.26 billion). Non-interest income was C$1.90 billion ($1.48 billion), down 52.9%.
Adjusted non-interest expenses increased 2.7% year over year to C$3.76 billion ($2.92 billion).
The adjusted efficiency ratio (net of CCPB) was 56.7%, up from 55.7% as of Jul 31, 2021. A rise in the efficiency ratio indicates a deterioration in profitability.
Provision for credit losses was C$136 million ($105.7 million) in the reported quarter against recovery of credit losses in the prior-year quarter.
Loans & Deposit Balances Rise
As of Jul 31, 2022, total assets were C$1,068.3 billion ($834.5 billion), up 2.6% from the prior-quarter end.
Bank of Montreal’s total net loans were up 4.1% sequentially to C$522.8 billion ($408.4 billion), while total deposits grew 2.2% to C$729.4 billion ($569.8 billion).
Profitability and Capital Ratios Solid
Bank of Montreal’s return on equity (as adjusted) was 13.8% in the fiscal third quarter compared with 17.6% on Jul 31, 2021. Adjusted return on tangible common equity was 15.1%, down from the prior year’s 19.8%.
As of Jul 31, 2022, common equity Tier-I ratio was 15.8%, up from 13.4% a year ago. Tier-I capital ratio was 17.3% compared with the previous year’s 15.1%.
Our Take
Bank of Montreal’s focus and efforts align with its organic and business restructuring strategies, and are anticipated to support revenues in the upcoming period. However, elevated expenses remain concerning.
Bank Of Montreal Price, Consensus and EPS Surprise
The Bank of Nova Scotia (BNS - Free Report) reported third-quarter fiscal 2022 (ended July 31) adjusted net income of C$2.61 billion ($2.04 billion), which rose 2% year over year. Results excluded certain one-time items.
Higher net interest income, driven by rising rates and improving loan demand, mainly supported the results. Moreover, the balance sheet position remained strong in the quarter. However, lower non-interest income and a rise in expenses were the headwinds. Further, an increase in provisions on worsening economic outlook hurt BNS’ financials.
Royal Bank of Canada’s (RY - Free Report) third-quarter fiscal 2022 (ended Jul 31) adjusted net income of C$3.56 billion ($2.78 billion) declined 16.8% from the prior-year quarter.
Results were adversely impacted by a rise in provisions, lower non-interest income on weak capital markets performance and a worsening economic backdrop. Also, RY’s capital ratios deteriorated in the quarter. However, a marginal fall in expenses, a rise in net interest income, and solid loans and deposit balances acted as tailwinds.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Bank of Montreal (BMO) Stock Dips as Q3 Earnings Decline Y/Y
Shares of Bank of Montreal (BMO - Free Report) have lost 3.2% since the announcement of its third-quarter fiscal 2022 (ended Jul 31) results. Adjusted net income of C$2.13 billion ($1.66 billion) declined 7% year over year.
BMO recorded marginally higher revenues in the reported quarter. A rise in loans and deposit balances supported the results. However, an increase in expenses was the undermining factor.
After considering non-recurring items, net income was C$1.37 billion ($1.06 billion), down 40% from the prior-year quarter.
Adjusted Revenues Improve Marginally, Expenses Rise
Total revenues (on an adjusted basis), net of insurance claims, commissions and changes in policy benefit liabilities (CCPB), were C$6.63 billion ($5.15 billion), up marginally year over year.
Net interest income grew 19.2% year over year to C$4.20 billion ($3.26 billion). Non-interest income was C$1.90 billion ($1.48 billion), down 52.9%.
Adjusted non-interest expenses increased 2.7% year over year to C$3.76 billion ($2.92 billion).
The adjusted efficiency ratio (net of CCPB) was 56.7%, up from 55.7% as of Jul 31, 2021. A rise in the efficiency ratio indicates a deterioration in profitability.
Provision for credit losses was C$136 million ($105.7 million) in the reported quarter against recovery of credit losses in the prior-year quarter.
Loans & Deposit Balances Rise
As of Jul 31, 2022, total assets were C$1,068.3 billion ($834.5 billion), up 2.6% from the prior-quarter end.
Bank of Montreal’s total net loans were up 4.1% sequentially to C$522.8 billion ($408.4 billion), while total deposits grew 2.2% to C$729.4 billion ($569.8 billion).
Profitability and Capital Ratios Solid
Bank of Montreal’s return on equity (as adjusted) was 13.8% in the fiscal third quarter compared with 17.6% on Jul 31, 2021. Adjusted return on tangible common equity was 15.1%, down from the prior year’s 19.8%.
As of Jul 31, 2022, common equity Tier-I ratio was 15.8%, up from 13.4% a year ago. Tier-I capital ratio was 17.3% compared with the previous year’s 15.1%.
Our Take
Bank of Montreal’s focus and efforts align with its organic and business restructuring strategies, and are anticipated to support revenues in the upcoming period. However, elevated expenses remain concerning.
Bank Of Montreal Price, Consensus and EPS Surprise
Bank Of Montreal price-consensus-eps-surprise-chart | Bank Of Montreal Quote
BMO currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Canadian Banks
The Bank of Nova Scotia (BNS - Free Report) reported third-quarter fiscal 2022 (ended July 31) adjusted net income of C$2.61 billion ($2.04 billion), which rose 2% year over year. Results excluded certain one-time items.
Higher net interest income, driven by rising rates and improving loan demand, mainly supported the results. Moreover, the balance sheet position remained strong in the quarter. However, lower non-interest income and a rise in expenses were the headwinds. Further, an increase in provisions on worsening economic outlook hurt BNS’ financials.
Royal Bank of Canada’s (RY - Free Report) third-quarter fiscal 2022 (ended Jul 31) adjusted net income of C$3.56 billion ($2.78 billion) declined 16.8% from the prior-year quarter.
Results were adversely impacted by a rise in provisions, lower non-interest income on weak capital markets performance and a worsening economic backdrop. Also, RY’s capital ratios deteriorated in the quarter. However, a marginal fall in expenses, a rise in net interest income, and solid loans and deposit balances acted as tailwinds.