* Says early indicators suggest Toronto market softening
* U.S. P&C net income down 7 percent to C$260 million
* Adjusted EPS C$1.92 vs C$1.73
* Shares down 3 percent
(Recasts, adds comment from BMO Canada head)
By Matt Scuffham
TORONTO, May 24 BMO Financial Group's
Canadian head said on Wednesday that the country's
fourth-biggest lender was starting to see signs of a softening
in Toronto's housing market.
The province of Ontario last month introduced measures to
cool prices in Toronto, which had risen by a third over the
course of a year, including the introduction of a 5 percent tax
on foreign investors.
Cameron Fowler, BMO's Group Head, Canadian Personal and
Commercial Banking, said the measures were already starting to
have an impact.
"Early indicators are that we will start to see some
softening and, from my own perspective, that is good. Softening
in the Toronto market is a good thing and it looks like that may
be where we're heading," he said.
Shares in Canada's financial services companies
hit a 5-month low earlier this month after credit ratings agency
Moody's downgraded the country's banks on May 10, citing
concerns over record levels of household debt and the country's
hot housing markets.
BMO said alongside its second quarter results that it
expected the Ontario government's measures to "moderate an
overheated housing market in the Greater Toronto region".
Out of Canada's biggest banks, BMO has the lowest exposure
to residential mortgages as a proportion of its total assets.
The bank reported quarterly earnings which were slightly
below expectations, hit by a decline in profit in the United
States and its shares were trading down 2.9 percent at 1521 EDT.
BMO said earnings per share, excluding one-off items, rose
to C$1.92 ($1.42) in the second quarter ended on April 30 from
C$1.73 a year earlier. Analysts on average expected C$1.93,
according to Thomson Reuters I/B/E/S.
Bank of Montreal said that U.S. loan and deposit growth had
moderated, reflecting slower-than-anticipated business activity
in the first quarter of the calendar year.
Net income, before one-off items, at the bank's U.S.
personal & commercial business fell by 7 percent to C$260
million as the bank set aside more funds to cover bad loans.
The bank said its net income rose by 28 percent to C$1.25
billion, benefiting from a strong performance by its wealth
management and capital markets businesses.
Bank of Montreal said its wealth management business had
benefited from the improved performance of global equity markets
during the period while the previous year had been impacted by
an investment write-down.
The bank announced a quarterly dividend of C$0.90, up 5
percent on the previous year.
($1 = 1.3505 Canadian dollars)
(Reporting by Matt Scuffham; Editing by Lisa Von Ahn and Chizu