BMO’s expense clampdown takes center stage

On the basis of these results, we do not plan to make any material changes to our fair value estimates

Eric Compton 4 December, 2019 | 12:30AM

BMO Building with Wires in Foreground

Narrow-moat-rated Bank of Montreal (BMO) reported adjusted fourth-quarter results that were generally in line with CapIQ consensus estimates. Adjusted revenue was up 5% while adjusted expenses were up just 1%. This led to adjusted net income and earnings per share growth of roughly 5% each. Reported results looked worse largely because of a $484 million restructuring charge that the bank took during the quarter. Provisioning came down a bit from the third quarter, dropping roughly 18%. Adjusted return on equity came in at 13.5%, roughly in line with the mid- to upper 13% range we've seen for much of the year. On the basis of these results, we do not plan to make any material changes to our fair value estimates of $103.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Bank of Montreal78.63 CAD0.76

About Author

Eric Compton

Eric Compton  Eric Compton is an equity analyst for Morningstar,

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