Bank of Montreal said loan and deposit growth in the U.S. moderated in its latest quarter on slower-than-anticipated business activity.
Still, shares of BMO Financial Group rose 1.6% in premarket trading as the bank raised its dividend and beat revenue expectations.
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Last month, the bank said Chief Executive Bill Downe will retire this fall after a decade of leading one of Canada's largest banks. Mr. Downe will be replaced by the bank's operating chief, Darryl White.
Under Mr. Downe, Bank of Montreal pursued a U.S. expansion focused on the Midwest. This built on the bank's 1984 acquisition of Harris Bank, which made Bank of Montreal the first Canadian bank to make a big bet on U.S. growth.
Bank of Montreal has built a strong deposit franchise in Illinois and Wisconsin, but hasn't expanded as strongly outside those two states. In 2011, it added Milwaukee-based Marshall & Ilsely Corp. Beyond the Midwest, it bought British asset manager F&C Asset Management in 2014 and GE Capital Corp.'s transportation-finance business in 2015.
In the quarter, the bank reported growth from its wealth management and BMO Capital Markets units.
Expenses fell to $3.28 billion Canadian dollars (about $2.43 billion) from C$3.31 billion.
The company increased its quarterly dividend by 2 Canadian cents to 90 cents a share.
The total provision for credit losses was C$259 million, up from C$201 million in the same quarter last year, due to higher provisions in the U.S. and lower credit recoveries.
Bank of Montreal posted a net profit of C$1.25 billion, or C$1.84 a share, for its second quarter. That is up from a profit of C$973 million, or C$1.45 a share, in the year-prior period. Adjusted to exclude certain items, the bank said it earned C$1.92 a share, compared with the C$1.93 a share analysts polled by Thomson Reuters had expected.
Revenue rose 13% to C$5.74 billion. Analysts had expected C$5.22 billion.
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(END) Dow Jones Newswires
May 24, 2017 08:39 ET (12:39 GMT)