Bank of Montreal (BMO) and Bank of Nova Scotia (BNS) have each reported fourth-quarter 2024 financial results that beat analysts’ consensus forecasts.
The Canadian banks said their quarterly profits were driven higher by growth in their respective capital markets and wealth management business units.
Bank of Montreal reported earnings per share of $3.04, topping the consensus estimate of $2.41.
Scotiabank said it earned $1.76 per share in Q4 2024, besting estimates of $1.65. The lender recorded an impairment charge of $1.36 billion due to the sale of some Latin American assets.
The two banks, which are Canada’s third and fourth largest, said that declining interest rates have increased demand for mergers and acquisitions (M&A) in recent months.
Each bank also said that wealth management is booming due to a rise in the number of high-net-worth individuals and increasing investments across Canada.
Both Bank of Montreal and Scotiabank set aside large sums of money to cover potentially bad loans as trade tensions ratchet up between Canada and the U.S.
Scotiabank set aside $1.16 billion, which was more than the $1.12 billion expected by analysts, while BMO made provisions for credit losses of $1.01 billion, lower than the $1.14 billion that was anticipated.
Each bank, which were the first of Canada’s big six lenders to report financial results, is expanding outside the Canadian marketplace.
Bank of Montreal has expanded on the U.S. West Coast through its acquisition of Bank of the West. Scotiabank recently bought a 15% stake in U.S. regional lender KeyCorp (KEY).
The stock of Bank of Montreal has risen 12% in the past year to trade at $142.35 a share. Scotiabank’s stock has increased 13% over the last 12 months to trade at $72.23 per share.
