Tuesday, August 26, 2008

BMO, Scotiabank both see Q3 earnings retreat

BMO, Scotiabank both see Q3 earnings retreatBMO 3-month TSX chart

BMO Financial Group and the Bank of Nova Scotia on Tuesday both reported third-quarter profits that dipped lower as provisions for bad loans rose.

BMO's profit for the third quarter fell 21 per cent as the bank reported almost a quarter of a billion dollars in charges related to the U.S. housing market.

BMO said it made $521 million, or 98 cents a share, down from $660 million, or $1.28 a share, a year earlier.

The bank said its overall revenues increased by eight per cent year-over-year to $2.75 billion.

BMO's provisions for credit losses in the third quarter totalled $484 million, up 100 per cent from the same quarter a year earlier. The increase included $50 million for general losses and $247 million for two corporate accounts related to the weak U.S. housing market.

"The impact of the deterioration in the U.S. housing market has affected our results and while uncertainty exists, we are confident in the earnings capacity of the core franchise," said Bill Downe, BMO's president and CEO, in a release.

In conjunction with the earnings results, the bank declared a 70-cent dividend on its common shares.

BMO shares were off 64 cents at $43.42 in early afternoon trading on the TSX.

Bank of Nova Scotia earnings down 2 per cent

The Bank of Nova Scotia reported a third-quarter profit of $1.01 billion, off two per cent from the same quarter of the previous fiscal year. On a per-share basis, Scotiabank said its made 98 cents, down from $1.02 year-over-year.

As with BMO, Scotiabank said its revenues grew, climbing to $3.37 billion from $3.3 billion.

The bank's provision for credit losses for the third quarter was $159 million, up from $92 million a year earlier.

Scotiabank said its domestic and international banking business was stronger, but added that the higher credit losses and lower revenues from its capital markets division weighed on results.

On the TSX, Scotiabank stock was down 88 cents to $46.76.



  • Citi beats Street, Merrill mauled
  • HandR Block gets bump from subprime offload
  • Scotiabank says it won’t meet this year’s profit growth target
  • TD profit slips on weaker wholesale banking
  • TMX Group earnings up after merger with Montreal Exchange
  • 0 comments: