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Bank of Montreal sees YOY decline in fiscal Q1 profit

Bank of Montreal on Feb. 27 reported fiscal first-quarter 2018 net income of C$973 million, or C$1.43 per share, compared to C$1.49 billion, or C$2.22 per share, in the year-ago quarter.

The S&P Capital IQ consensus normalized EPS estimate was C$2.06 for the recent quarter.

The Canadian lender's net income in the recent quarter included a C$425 million charge due to the revaluation of the U.S. net deferred tax asset as a result of the enactment of the tax reform law.

Net income for the company's Canadian personal and commercial banking segment was C$647 million, down by C$97 million or 13% year over year. On the other hand, net income for the U.S. personal and commercial banking segment was C$310 million, up C$61 million or 24% from a year ago. BMO Wealth Management reported net income of C$266 million, lower than the year-ago quarter's C$269 million. BMO Capital Markets reported net income of C$271 million, down from $367 million in the previous year due to lower revenue from the trading products business.

Bank of Montreal's total provision for credit losses was C$141 million for the recent quarter, down by C$26 million from the prior year. The company reported revenue of C$5.68 billion for the recent quarter, compared to C$5.41 billion a year ago.

In a separate news release, the company said that it intends to purchase, for cancellation, up to 20 million of its common shares under a normal course issuer bid through the facilities of the Toronto Stock Exchange. The normal course issuer bid, which is subject to the approval of the Office of the Superintendent of Financial Institutions Canada and the TSX, is expected to commence on or around May 30 and will end on or around May 29, 2019.

The common shares that may be repurchased represent approximately 3.1% of the 'public float' of common shares as at Jan. 31. There were 645,528,245 Bank of Montreal common shares issued and outstanding at Jan. 31, and the public float was 645,186,534 common shares.

BMO's current normal course issuer bid for the purchase of up to 22 million common shares commenced May 1, 2017, and will expire on April 30. As of Feb. 1, BMO has purchased and canceled 8 million of its common shares under the current bid, at a volume weighted average price of approximately C$91.71 per share.