BMO's Q4 Revenue And Profit Drop, Increases Dividend By 3%

Bank of Montreal BMO reported a fourth-quarter FY23 revenue decrease of 22.3% year-over-year to C$8.36 billion. 

Adjusted revenue, net of CCPB, was $8.22 billion, an increase of 19% Y/Y.

Adjusted EPS was C$2.81 vs. C$3.04 in 4Q22. BMO's net income fell to C$1.617 billion.

Provision for credit losses for Q4 was C$446 million, compared to C$226 million a year ago. Return on equity (ROE) was 8.6% for the quarter, compared with 27.6% a year ago, and adjusted ROE was 11.7%, compared with 12.9%.

Common Equity Tier 1 ratio decreased to 12.5% from 16.7% in 4Q22.

Canadian P&C reported net income was C$962 million and adjusted net income was C$966 million, both increased 5% Y/Y.

U.S. P&C's net income was C$661 million, up by $1 million YoY, and its adjusted net income was C$740 million (+12% Y/Y).

BMO Wealth Management's net income was C$262 million, and adjusted net income was C$263 million, both decreased by 12% Y/Y.

BMO Capital Market's net income was C$489 million (+37% Y/Y), and its adjusted net income was C$492 million (+36% Y/Y), reflecting revenue growth of 19%, with higher revenue in both Global Markets and Investment and Corporate Banking.

Corporate Services' net loss was C$(757) million, compared with a reported net income of C$2.25 billion in the prior year, and adjusted net loss was C$(311) million, vs. a net loss of C$(104) million a year ago.

Dividend: BMO declared a dividend of C$1.51, a 4 cent, or 3% increase from the prior quarter and up 6% from the preceding year. The dividend is payable on February 27, 2024, to shareholders of record on January 30, 2024.  

"Looking to 2024, we have proactively positioned the bank for future growth and are confident that our dynamic expense and capital management actions and ongoing targeted investments will drive consistent and differentiated performance," commented Darryl White, Chief Executive Officer.

Price Action: BMO shares are trading higher by 1.75% at $83.73 on Friday.