BMO's Q3 2024 Report: The $BMO stock price is bleeding, down 6% as of 10 AM, after uncovering bad loans from its acquisition of Bank of the West, resulting in the highest quarterly write-off in five years.
As BMO continues to clean up after its acquisition of Bank of the West—the largest in Canadian banking history—it is uncovering bad loans on its books.
While income remains in line with the average over the past 4.5 years, PCL, write-offs, and ACL have all increased significantly compared to the historical average.
Key Highlights:
- Write-offs surged 111% Year-over-Year to $643M, the highest over the past 5 years.
- Adjusted earnings missed expectations $2.64/share vs. $2.75 expected, mainly due to higher than expected provisions for credit losses (PCL).
- Net quarterly income rose 19% Year-over-Year to $1.87B.
- PCL increased 84% Year-over-Year to $906M as bad loans made by Bank of the West are being discovered.
BMO became significantly larger since early 2023 when it acquired Bank of the West.
Other Info about $BMO (August 26, 2024 Closing):
- Dividend Yield: 5.2%
- P/E: 14.4
- Market Cap: CAD$87.3B
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