-Canadian lender Bank of Montreal on Wednesday missed analysts' estimates for quarterly profit, hurt by weakness at its U.S. segment and as it sets aside more funds to cover for potentially souring loans in a high interest rate environment.
The move came as Canadian banks look for opportunities to diversify south of the border, seeking alternative paths for growth as competition intensifies in a saturated market at home in a highly regulated market.BMO said the U.S. segment's adjusted net income fell 24%, hit by lower net interest income, or the difference between what a bank earns on loans and pays out for deposits, due to lower margins.
Bright spots this quarter were the bank's Canadian unit where earnings rose 7% on an adjusted basis and the capital markets segments which reported a 23% rise in net income, driven by higher interest rate trading and higher debt and equity issuance activity.