Bank of Montreal Q4 profit jumps 19%

Bank of Montreal overcame higher provisions for loan losses to post a sharply higher fourth-quarter profit as its various units posted stronger results.

BMO (TSX:BMO) said it made $657 million ($1.27 a share) in Q4, compared to the $551 million ($1.06 a share) it made a year earlier.

That easily beat the consensus estimate of $1.10 a share forecast by 12 analysts surveyed by Thomson Financial.

Return on equity jumped to 19.8 per cent from 17.8 per cent.

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Earnings grew 14 per cent at the bank's personal and commercial banking unit and more than doubled at its private client group. Investment banking profits also rose 18 per cent.

The bottom line was also boosted by some one-time gains, including the sale in October of Harrisdirect for an $18 million after-tax gain, as well as an after-tax gain of $32 million from the sale of shares in the Toronto Stock Exchange.

"Each of our client operating groups enjoyed solid increases in net income, with business volumes up year-over-year," said BMO chief executive Tony Comper in a statement on Tuesday.

$2.4 billion profit in fiscal 2005

For the fiscal year as a whole, BMO reported a record net profit of $2.4 billion ($4.64 a share), up 4.1 per cent from the $2.3 billion it made last year.

Each of its operating groups reported record net income.

Looking ahead, BMO said it expects the 2006 credit environment to be stable, but warned of "potential weakness" in the later part of the year.

The bank has forecast its 2006 provision for credit losses to be $400 million or less. That's an increase over the current year's $179 million provision.

BMO shares gained $2 to close at $63.45 on the TSX.