Bank of Montreal Stock Tumbles After Earnings—Here’s Why

Shares of Bank of Montreal or BMO Financial Group (BMO) plunged over 8% in intraday trading Wednesday after the Canadian financial firm posted worse-than-expected results. The money it set aside to cover bad loans rose from the prior quarter and it also reported that its U.S. business weakened.

The bank reported fiscal second-quarter adjusted earnings per share (EPS) of C$2.59 ($1.90), with revenue rising 2.4% from a year ago to C$7.97 billion ($5.84 billion). Net interest income slipped 6.2% to C$4.52 billion ($3.32 billion). All three metrics missed analysts’ estimates compiled by Visible Alpha. 

BMO Loan Loss Provision Increased

BMO’s loan loss provision of C$705 million ($517 million) rose from the first quarter and was above what analysts had anticipated. 

Net income at the U.S. personal and commercial (P&C) banking segment fell 26% to C$543 million ($398 million). BMO said the U.S. results reflected “lower revenue due to a decrease in net interest income, primarily from lower margins, and lower non-interest revenue, lower expenses and a higher provision for credit losses.” Canadian P&C net income rose 6% to C$872 million ($639 million).

BMO Stock Sinks Further Into Negative Territory for 2024

The news sent shares of Bank of Montreal down about 8.6% on the New York Stock Exchange to $87.84 as of 2:50 p.m. ET Wednesday and further into negative territory for the year. Shares have lost about 11% of their value since the start of 2024.