canoe2.canoe.ca
Tuesday, August 26, 1997
BMo, Scotiabank reports huge profit
increases
TORONTO (CP) - Two of Canada's Big Five domestic banks reported sharp increases in
third-quarter profits today.
Bank of Montreal earned more than $1 billion in profits during the first nine months of its fiscal
year, including $372 million in the quarter ended July 31. That's up 23.7 per cent from the same
1996 period.
At Scotiabank, third-quarter profits jumped by 40 per cent to $384 million, in part from a record
one-time gain of $170 million from the sale of stocks.
Nine-month profit at Scotiabank rose 25 per cent to $981 million, while Bank of Montreal's $1
billion profit for the same period was up 14.9 per cent.
"The North American economy is posting its strongest sustained growth of the decade and that
has added to the solid performance of the bank," Bank of Montreal chairman Matthew Barrett
said in a release.
"Low interest rates and inflation, along with reduced unemployment are fueling consumer spending
on durables, including housing, leading to growth in key areas such as residential mortgages."
At Scotiabank, strong growth in consumer, mortgage and corporate lending, fewer bad loans and
improved international operations also helped increase profits.
"All of our business lines . . . contributed to our strong results," said chairman Peter Godsoe. "This
broad diversification continues to reward both Scotiabank customers and shareholders."
Meanwhile, Hongkong Bank of Canada, one of country's fastest growing banks, reported
third-quarter earnings of $35.4 million, up 10.3 per cent.
Canada's banks have been reporting booming profits for several years, in part because of rapid
lending growth, acquisitions and stellar results from their brokerage subsidiaries, who have cashed
in on the stock market boom. The banks are also growing their business very quickly, especially in
the United States and Latin America.
At Scotiabank, total assets - mostly outstanding loans - grew more than 10 per cent to $181.7
billion.
At Bank of Montreal, assets grew by 23 per cent in the last year to $200.4 billion.
Elsewhere, earnings from outside Canada amounted to more than half of the bank's total
nine-month profit, or $521 million. In fiscal 1996, the bank's foreign income was 47 per cent of
total earnings.
Bank of Montreal owns Chicago-based Harris Bank and has a 16 per cent equity stake in
Mexico's Grupo Financiero Bancomer.
At Vancouver-based Hongkong Bank, the profit increase resulted from strong growth in loans,
corporate finance, asset management and fees from mutual funds and securities trading.
Hongkong Bank of Canada, with $23.6 billion in assets, is the country's largest foreign-owned
bank and has grown rapidly through acquisitions in recent years.
It is a wholly owned subsidiary of HSBC Holdings plc with 117 branches across Canada and two
branches in the United States. The HSBC Group is among the world's largest financial services
groups, with assets of more than $631 billion.
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