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The Bank of Montreal (TSX:BMO) has released its second-quarter 2021 results just as the big Canadian banks are gearing up to post their latest earnings reports for the period.
Keeping up with the recovery it reflected in the first quarter of 2021, BMO posted a net income of C$ 1.3 billion in Q2 FY21, up by C$ 689 million year-over-year (YoY).
Ahead of its earnings report, BMO stocks hit a 52-week high of C$ 125.33 on Tuesday, May 25, before closing at C$ 123.6.
The bank reportedly posted a robust earnings report as it saw fewer provisions than expected and recorded gains in its capital markets unit. Notably, in Q2 2021, BMO’s provision for credit losses (PCL) was C$ 60 million, as compared to C$ 1,118 million in Q2 2020. Lower provision for credit losses indicates an outlook of recovery as COVID-19 vaccinations have picked up pace in the country.
BMO’s quarterly dividend, however, will remain unchanged at C$ 1.06 for the third quarter of 2021 as it is not allowed to expand its dividend under regulator OSFI’s present rules. Its current dividend yield is 3.4 per cent.
Unlike other countries, banks in Canada have managed to recover from the COVID-19 pandemic sooner than predicted. Strong trading activity at the Toronto Stock Exchange (TSX) and new deals also played an important role in the recent quarters.
Market experts have suggested that the Canadian banks are likely to beat estimates and post strong second-quarter 2021 results this year.
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BMO Q2 FY21 Financials – Key Highlights
BMO’s return on equity stood at 10.2 per cent in Q2 2021, reflecting an increase of 5.3 per cent YoY. Its reported earnings per share jumped by C$ 1 to C$ 1.91 and its revenue increased to C$ 6.1 billion in the latest quarter.
BMO’s cash and cash equivalents were C$ 98.6 billion and the value of the total assets was C$ 949.8 billion in Q2 FY21.
Stock Performance of Bank of Montreal (TSX:BMO)
1-year chart of stock performance, volume and moving average exponential of Bank of Montreal (Source: EODHD/Others)
Surpassing the S&P TSX Diversified Bank (Sub Industry) Index, BMO stock surged by 89 per cent in the last year and by about 28 per cent year-to-date (YTD). In the past week, the stock jumped one per cent.
BMO holds a market cap of C$ 79.99 billion, a price-to-earnings ratio of 14.9 and offers a 0.56 per cent return on assets, as per TMX data.
BMO is a bluechip stock considered by many long-term players. If you are planning to invest in bank stocks, it could be the right time to look into your options as their prices are likely to climb further in future
The above constitutes a preliminary view and any interest in stocks should be evaluated further from an investment point of view.
