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BLOOMBERG
Bank of Montreal posted a surprise drop in fiscal second-quarter profit as it set aside a larger provision for loan losses than analysts had expected and trading revenue fell.
The bank’s provision for credit losses of C$1.02 billion ($755 million) included an initial C$517 million on the performing loan portfolio of Bank of the West, the bank said in a statement. It’s the first time Bank of Montreal has reported results that include the San Francisco-based lender, which it bought from BNP Paribas SA for $16.3 billion.
Excluding some items, profit was C$2.93 a share, missing the C$3.21 average estimate of analysts in a Bloomberg survey.
The Bank of the West deal, which closed on February 1, expanded the bank’s US footprint to 32 states and makes its US personal and commercial banking division, with C$2.6 billion in revenue during the quarter, slightly larger than its Canadian one. Bank of Montreal’s capital-markets division had C$1.59 billion in revenue, in line with analysts’ projections. Global markets revenue was down 15% from the first quarter — trading revenue declined across all categories — but investment and corporate banking rose.