Bank of Montreal · Q1 2004 earnings

Briefing

BMO Financial Group reported Q1 2004 net income of C$532M (+34% YoY) and diluted EPS of C$1.00, with the dividend raised 14% to C$0.40 per quarter.

For the first quarter ended January 31, 2004, BMO Financial Group earned net income of C$532 million, up 34% year over year. Diluted EPS was C$1.00 (+33%) and cash EPS was C$1.03 (+30%). ROE was 18.3% and cash ROE 19.0%. Revenue on a taxable-equivalent basis grew 4% while expenses fell 1%, improving the cash productivity ratio to 63.9%. Net provision for credit losses was C$15 million, reflecting C$55 million of specific provisions and a C$40 million reduction in the general allowance. The bank increased its quarterly common dividend by C$0.05 (14%) to C$0.40 and now expects full-year provision for credit losses of C$300 million or less versus a prior C$500 million target.

• Net income of C$532M (+34% YoY) with diluted EPS of C$1.00 (+33%) and cash EPS of C$1.03 (+30%).
• Net provision for credit losses of C$15M vs C$150M of specific provisions a year ago on improved credit quality.
• Revenue growth of 4% (teb) and expense reduction of 1%; cash productivity ratio improved to 63.9% from 67.9%.
• Tier 1 capital ratio strengthened to 9.65% from 9.05%.
• Quarterly dividend increased 14% to C$0.40; 2004 PCL outlook cut to C$300M or less.

Headline financials

Revenue & EPS history

Management now anticipates annual provision for credit losses of C$300 million or less for fiscal 2004, excluding further general-allowance releases, compared with the prior target of C$500 million or less.