BMO - Bank of Montreal fiscal Q1 earnings beat with lift from personal commercial units

Bank of Montreal ( NYSE: BMO ) on Tuesday turned in better-than-expected adjusted EPS for the quarter ended Jan. 31, 2023, as revenue climbed both on Q/Q and Y/Y, helped by its Canadian and U.S. personal and commercial banking operations.

Q1 adjusted EPS of C$3.22 (US$2.37), vs. the C$3.16 consensus, rose from C$3.04 in the prior quarter and down from C$3.89 in the year-ago quarter.

Adjusted revenue, net of CCPB, of C$7.29B (US$5.37B), missing the C$7.35B consensus, increased from C$6.91B in Q4 2022 and from C$7.11B in Q1 2022.

"We had a very good start to the year, with continued strong operating performance in our Canadian and U.S. Personal and Commercial businesses and improving momentum in BMO Capital Markets, benefitting from our strategic investments in talent and technology," said CEO Darryl White.

Total net loans and acceptances of C$559.9B rose from C$564.6B in Q4; customer deposits increased to C$545.1B from C$544.4B in the previous quarter.

Q1 provision for credit losses of C$217M fell from C$226M in the prior quarter and compared with a recovery of C$99M in the year-ago quarter.

Q1 net interest income of C$4.02B rose from C$3.77B in Q4 and was roughly even with Q1 2022.

Noninterest expense dropped to C$4.42B from C$4.78B in the prior quarter and increased from C$3.85B in the year-ago period.

Adjusted return on equity was 13.4% vs. 12.9% in the prior quarter and from 18.8% a year ago.

Canadian Personal & Commercial Banking adjusted net income of C$980M increased from C$917M in Q4 and declined from C$1.00B in Q1 2022.

U.S. P&C adjusted net income was C$699M climbed from in the prior quarter and from C$682M in the year-ago period.

BMO Wealth Management adjusted net income of C$278M vs. C$298M in the prior quarter and C$316M in the year-ago quarter.

BMO Capital Markets adjusted net income of C$510M rose from C$363M in Q4 and declined from C$712M in Q1 2022.

Adjusted results in Q1 2023 excluded: a loss of C$1.46B related to the management of the impact of interest rate changes between the announcement and closing of the Bank of the West acquisition on its fair value and goodwill, compared with revenue of C$413M in the prior year; acquisition and integration costs of C$181M vs. C$10M in the prior year; C$371M of tax expenses related to certain tax measures enacted by the Canadian government; and a $6M legal provision comprising of interest expense and legal fees related to a lawsuit associated with a predecessor bank, M&I Marshall and Ilsley Bank.

Earlier, Bank of Montreal ( BMO ) non-GAAP EPS of C$3.22 beats by C$0.06, revenue of C$6.47B misses by C$870M

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