BMO's loan book hurts results

Bank budgets more cash for credit losses, and expects to do so for a while

- IAN BICKIS

Trouble in BMO Financial Group’s loan book has once again weighed on its quarterly results, prompting analyst worries about the bank becoming an outlier in this credit cycle.

The bank on Tuesday reported provision for credit losses amounted to $906 million for its third quarter, up from $492 million a year earlier, as it reported adjusted earnings that were down from last year.

Chief executive Darryl White said the scale of the loan loss provisions did not meet the bank’s expectations and that it expects those provisions to stay elevated in the near term.

“The combination of prolonged high interest rates, economic uncertainty and changing consumer preferences had an acute impact,” said White.

The bank emphasized that while some segments like trucking and commercial loans have been under pressure, overall, the uptick in potential losses aren’t concentrated geographically or by sector.