US banks are crying but Canadian banks are making money

by investor on 25/11/08 at 12:38 pm

Bank of Montreal reported a fourth-quarter profit of $560-million on Tuesday, up 24 per cent from $452-million a year earlier. While a number of its rivals have pre-announced writedowns and other key elements of their fourth-quarter results, BMO is the first to give the market the full picture.

“Taken in context, Bank of Montreal’s earnings were much stronger than we had anticipated,” Dundee Capital Markets analyst John Aiken wrote in a note to clients. One of the bank’s trouble spots was a large increase in provisions for bad loans from the U.S., which analysts had been watching for.
“Evidence of credit deterioration is clear,” RBC Capital Markets analyst Andre-Philippe Hardy said.

But, given that BMO shares had fallen below the bank’s book value per share on Nov. 21, the financial results are “sufficient to provide investors with a measure of relief,” Merrill Lynch analyst Sumit Malhotra wrote in a note to clients.

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