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BMO Financial Group Reports Strong Second Quarter Core Results

Canada based BMO Financial Group reported net income of CA$358 million or CA$0.61 per share for the second quarter of 2009. Canadian personal and commercial banking has reported with net income of CA$350 million, up CA$30 million or 9% from a year ago, and BMO Capital Markets net income grew by CA$62 million or 33% to CA$249 million.

Results included losses of CA$80 million after tax (CA$0.15 per share) in respect of capital markets environment charges, and severance costs of CA$80 million after tax (CA$0.15 per share) primarily related to simplifying our management structure.

Results continued to be affected by global recessionary pressures. Provisions for credit losses in the current quarter totalled CA$372 million, comprised of CA$127 million of specific provisions in Canada and CA$245 million in the United States, with no increase in the general allowance.

Bill Downe, President and Chief Executive Officer of BMO Financial Group, said: “In our wealth management business, we continue to see strong growth in term deposits, but results were affected by reduced levels of managed and administered assets due primarily to the significant declines in equity markets..”

“Our results for the quarter include severance costs related primarily to simplifying our management structure across our businesses and corporate support areas by reducing layers and broadening mandates. As such, the changes are expected to reduce ongoing costs and position our businesses to grow revenue and improve profitability with no reduction in our customer service. We anticipate that once the changes to our structure are completed, annual run-rate savings will exceed the CA$118 million of severance costs,” he further added.