Banking stock under pressure: Bank of Montreal (NYSE: BMO)

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Bank of Montreal (NYSE: BMO) stock fell over 2.7% (as of 9:48 am GMT-5; Source: Google finance) post fourth quarter of FY 19. The company’s net income fell by 30% to $1.19 billion in the fourth quarter, due to a restructuring charge of $357 million related to severance and real estate costs. BMO Capital Markets has reported the adjusted net income of $280 million, compared to $309 million in the prior year. Corporate Services has reported the adjusted net loss was $94 million, compared to an adjusted net loss of $65 million in the prior year.

Net income has increased by 6% to $716 million in the unit, which is the bank’s biggest. Personal and commercial banking net income in the U.S. unit was up 6%. Net interest income increased to C$3.36 billion from $3.02 billion a year ago while noninterest revenue was C$2.72 billion, which fell down from C$2.88 billion a year earlier. BMO’s Common Equity Tier 1 (CET1) Ratio was 11.4% as at October 31, 2019, which was unchanged from the prior quarter. Adjusted ROE was 13.5%, compared with 14.5% in the prior year. Adjusted ROTCE was 15.7%, compared with 17.3% in the prior year.

BMO in the fourth quarter of FY 19 has reported the adjusted earnings per share of C$2.43, while adjusted revenue growth of 5 percent to C$5.75 in the fourth quarter of FY 19

Moreover, Canadian P&C has reported the adjusted net income of $716 million, an increase of 6% from the prior year. U.S. P&C has reported the adjusted net income was $404 million, an increase of 5% from the prior year. BMO Wealth Management has reported the adjusted net income of $301 million, an increase of $72 million or 31% from the prior year.

The bank has raised its dividend as it will now pay a quarterly dividend of $1.06 per share, up three cents from its previous rate.

Meanwhile, during the fourth quarter, the bank has launched a new digital lending solution, the first of its kind from a major Canadian financial institution.

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