TORONTO - BMO Financial Group (NYSE:BMO) reported a decline in first-quarter profits and revenue, missing analyst expectations. Following the announcement, BMO's stock fell 2.02%.
The company's adjusted earnings per share (EPS) for the first quarter came in at Cdn$2.56, falling short of the consensus estimate of Cdn$2.98. Revenue for the quarter was also below expectations, at Cdn$7.85 billion compared to the anticipated Cdn$8.33 billion.
The bank's net income for the quarter stood at Cdn$1,292 million, a significant increase from Cdn$133 million in the same quarter the previous year. However, adjusted net income was Cdn$1,893 million, down from Cdn$2,158 million year-over-year (YoY).
The reported EPS of Cdn$1.73 marked a substantial rise from the Cdn$0.14 reported in the first quarter of 2023, while the adjusted EPS of Cdn$2.56 was lower than the Cdn$3.06 from the same period last year.
BMO's Chief Executive Officer, Darryl White, highlighted the bank's strength and resilience in the face of an uncertain economic outlook. "Although the environment has constrained revenue growth in market-sensitive businesses in the near term, with the strength of our personal and commercial businesses and our sharp focus on positioning the bank effectively for long-term success by reducing expenses, optimizing our balance sheet, and growing customer relationships, we are poised to create significant value for our shareholders," said White.
The bank also reported a provision for credit losses of Cdn$627 million, compared with Cdn$217 million in the previous year, and a return on equity (ROE) of 7.2%, down from 0.6% YoY.
BMO's capital position remained robust, with a Common Equity Tier 1 (CET1) Ratio of 12.8%, up from 18.2% in the prior year. The bank also announced a first-quarter 2024 dividend of Cdn$1.51 per common share, consistent with the previous quarter and a 6% increase from the previous year.
The bank's performance reflects the broader challenges faced by the financial industry, including a muted banking environment in the U.S. and the impact of strategic acquisitions. BMO continues to focus on long-term growth and shareholder value, as evidenced by the completion of the Bank of the West integration and the achievement of cost synergies.
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