(MENAFN- ProactiveInvestors) Bank of Montreal (TSE:BMO) Canada’s fourth-largest bank said profit fell in its fiscal first quarter disappointing analysts due to the impact of declining long-term interest rates on its insurance unit and lower investment and corporate banking revenues.
Net income slid to C$1 billion or C$1.46 a share for the three months ended January 31 from C$1.06 billion or C$1.58 a share a year earlier the Toronto Ontario-based bank said in a statement today.
On an adjusted earnings the bank said its earnings slipped to C$1.04 billion or C$1.53 a share down from C$1.08 billion or C$1.61 a share a year ago. That lagged behind the $1.63 average of 14 analyst estimates compiled by Capital IQ.
BMO said the reduced adjusted net income was primarily due to the impact of long-term interest rates on its insurance business.
The bank’s U.S.-listed shares fell as much as 2.1% in New York premarket trades. The stock closed down 1% to $61.47. The stock has lost 16 percent in the past three months.
“Results reflect the impact of an unsettled environment in which we saw significant movements in oil prices long-term interest rates and the Canadian dollar” chief executive officer William Downe said in the statement.
A plunge in crude oil prices coupled with low interest rates and a weakness in domestic consumer lending has pressured earnings setting the stage for what analysts forecast to be the slowest annual profit growth this year since 2009.
Return on equity a measure of profitability retreated to 11.8 percent down form 14.2 percent and well below the bank’s target of 15 per cent.
The disappointments follow a lacklustre fourth quarter when the bank reported net income that was essentially flat over the previous year while earnings on a per-share basis fell 3 percent.
However BMO saw earnings and revenues expand in its core personal and commercial banking segment along with improved profits from its wealth management arm.
Also today BMO declared a quarterly dividend of $0.80 per share on paid-up common shares for the second quarter of fiscal year 2015 unchanged from the previous quarter. The dividend is payable on May 26 to shareholders of record on May 1.
Bank of Montreal is the first Canadian lender to post quarterly results. () and () are scheduled to report tomorrow followed by Canadian Imperial Bank of Commerce (TSE:CM) and Toronto-Dominion Bank (TSE:TD) on February 26. () reports on March 3.
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