DOW JONES NEWSWIRES

Bank of Montreal (NYSE:BMO) (BMO) reported lower earnings in the fiscal second quarter, noting that its Canadian personal and commercial banking unit had a strong quarter but that results at BMO Capital Markets reflected slower investment- banking activity.

The Canadian chartered bank said net income for the quarter was C$642 million or C$1.25 a share, down from C$671 million or C$1.29 a year earlier.

Cash earnings per share were C$1.26 versus C$1.31.

Analysts polled by Thomson Reuters had expected the Toronto-based bank to earn C$1.19 a share in the latest quarter.

Return on equity was 17.9% versus 20.8%. Loan-loss provisions rose to C$151 million from C$59 million.

Bank of Montreal (NYSE:BMO) said the latest results reflect "good earnings in many of our businesses and the benefit from risk reduction activities in our capital markets business and disciplined credit risk management."

It noted that, as previously announced, it doesn't expect to achieve its annual earnings targets. "We previously indicated that the specific provision for credit losses of C$170 million recorded in the first quarter would be indicative of the quarterly run-rate for the balance of the year. Although specific provisions were lower in the current quarter, we now anticipate that average quarterly specific provisions over the balance of the year will be higher than in the first quarter, given continued deterioration in the credit environment including the U.S. real estate and particularly the residential real estate related sectors," it said.

-Carolyn King; 416-306-2100; AskNewswires@dowjones.com

Order free Annual Report for Bank of Montreal (NYSE:BMO)

Visit http://djnewswires.ar.wilink.com/?link=BMO or call 1-888-301-0513

    (END) Dow Jones Newswires   05-27-08 0949   Copyright (c) 2008 Dow Jones & Company, Inc.