Bank of Montreal to rally next year?

28 November 2007

Despite massive drops in profits this year, the Bank of Montreal's chief Bill Downe has predicted that the bank will rally next year.

In 2007 profits dropped by 20 per cent from $2.1 billion to $532 million, but the bank's boss predicted that it would return to the heights of last year's record of $2.7 billion in revenue.

According to Mr Downe, earnings per share are expected to increase by between ten and 15 per cent, even though last year the bank targeted only a five to ten per cent growth.

The new targets reflect "strong earnings momentum and solid growth across all our businesses, while anticipating a weaker credit environment", Mr Downe said.

Bank of Montreal's Chicago subsidiary Harris Bank has played a big part in the confident predictions, with a 51 per cent increase in earnings in the final quarter compared to the same time last year.

In order to achieve its targets, the Bank of Montreal will have to conquer this year's niggling financial problems, which included restructuring costs to the tune of $159 million.

The bank is the first of major Canadian banks to reveal its full year results after the credit crunch. The National Bank of Canada and Toronto-Dominion Bank are expected to follow on November 29th.

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