Profits just about double at BMO and Scotia as big banks reveal quarterly earnings | CBC News
Bank of Montreal and the Bank of Nova Scotia kicked off the quarterly earnings seasons for Canada’s five biggest lenders with a bang on Tuesday, revealing sharply higher profits and far less money set aside for bad loans.
BMO earned just over $2.2 billion in the three months up until the end of July, 85 per cent more than it did in the same period a year ago.
“With the economic recovery continuing to take hold, and as communities adapt to the most recent pandemic developments, we are committed to helping our clients make real financial progress and supporting their growth ambitions,” CEO Daryl White said in a release.
A year ago, Bank of Montreal had set aside more than $1 billion to potentially write off loans that the bank thought may go bad, a metric known as “provisions for credit losses.”
In the early days of the pandemic, Canada’s big five banks — RBC, TD, Scotia, BMO and CIBC — set aside more than $5 billion in such provisions to potentially write off loans that they worried might go bust because of the pandemic.
But a year later, it’s a much different story. BMO managed to completely reverse that potential red ink and release $70M worth of loans it had written off and put them back on the positive side of its ledger.
Profits were up in just about every part of BMO’s business, from the core Canadian retail banking unit to its U.S. division, along with wealth management and its trading unit.
Scotiabank profits rise, too
It was a similar story at Bank of Nova Scotia, which reported a quarterly profit of just over $2.5 billion. This time last year, Scotia’s profit was a little more than half that, at $1.3 billion.
Just like BMO, Scotiabank saw a big decline in its loan loss provisions, with the bank’s figure falling from $2.1 billion last year to just $380 million this year.
“We delivered another quarter of strong results, with contributions from all our operating segments, reflecting the benefits of a well-diversified business model,” CEO Brian Porter said. “While the economic recovery is unfolding at different rates across our footprint, I’m very proud of the Scotiabank team’s ongoing resilience and continued commitment to our customers.”
Canada’s three other major lenders will reveal their quarterly numbers in the coming days, with Royal Bank reporting on Wednesday and CIBC and TD following up on Thursday.
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