Canadian lender BMO’s second-quarter profit falls on US business weakness

By Thomson Reuters May 29, 2024 | 5:26 AM

(Reuters) – Canadian lender BMO Financial Group reported a fall in second-quarter adjusted profit on Wednesday, hurt by weakness in its U.S. business.

The bank’s U.S. personal and commercial banking unit took a hit from a fall in net interest income (NII) – the difference between what banks earn on loans and what they pay out on deposits.

The unit’s adjusted net income fell by 24% to C$612 million ($447.9 million) in the quarter.

NII for BMO fell 6% to C$4.52 billion in the quarter.

Lenders have had to offer competitive rates on deposits in a higher-for-longer interest rate environment to prevent depositors from fleeing to higher-yielding alternatives such as money market funds.

The bank’s adjusted net income fell to C$2.03 billion ($1.49 billion), or C$2.59 per share, in the three months ended April 30, from C$2.19 billion, or C$2.89 per share, a year earlier.

($1 = 1.3665 Canadian dollars)

(Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Shailesh Kuber and Tasim Zahid)