​BMO misses Q3 expectations as capital markets earnings sink 53% - BNN Bloomberg

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Bank of Montreal closed out earnings season for the Big Six with a profit miss as the lender set aside more funds for loans that could sour and saw earnings in its capital markets division tumble.

BMO said its net income in the three-month period that ended July 31 fell 40 per cent to $1.37 billion from $2.28 billion a year earlier. The sharp decline was due in part to costs associated with BMO's planned US$16.3-billion takeover of Bank of the West, including a $694-million hit caused by the change in interest rates since the deal was announced in December, the bank said in its release Tuesday.On an adjusted basis, BMO said it earned $3.09 per share in its latest quarter.

“Aside from a challenging quarter in capital markets, which drove the bank's modest [earnings] miss versus consensus, at first look a solid third-quarter result with all other operating segments performing well. While the headline [earnings] miss could drive some share price underperformance today, we continue to favor BMO's medium-term outlook relative to peers,” stated Mike Rizvanovic, an analyst at Keefe, Bruyette & Woods, in a note to clients Tuesday.

 

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