The Canadian Press

Bank of Montreal (TSX:BMO) said Tuesday its latest quarterly profit rose 16% from the year-earlier level as revenues increased, provisions for loan losses were reduced and its Canadian operations showed strong profit growth.

BMO, the first of Canada’s big banks to report its fourth-quarter and year-end results for 2009, reported overall net income of $647 million or $1.11 for the quarter ended Oct. 31. That was up from $560 million or $1.06 a year ago.

Total revenue for the quarter increased $176 million or 6.3% to $2.99 billion from $2.81 billion last year.

The revenue was $10 million ahead of analyst estimates which predicted revenue of $2.98 billion, according to Thomson Reuters.

“Our businesses gained strength over the course of 2009 as we have achieved strong revenue growth while keeping a firm grip on expenses,” said Bill Downe, BMO’s president and chief executive officer.

The bank said growth in all operating groups and a reduction in corporate services helped boost its revenue during the fourth quarter of fiscal 2009, which ended Oct. 31.

This was offset however by the weaker U.S. dollar which decreased revenue growth by $20 million from a year ago.

Downe added, however, that tight control over staffing levels and supplier costs helped bolster earnings.

“While we expect credit losses to remain elevated into 2010, we believe that we are well positioned for further growth as the economy improves,” Downe said in a statement.

The bank’s provision for credit losses, which occur when its clients don’t repay loans, decreased to $386 million during the quarter. That was down $79 million from last year. The provision for general losses was unchanged.

BMO added that Canadian personal and commercial banking, its largest business unit, reported a net income of $394 million, which was an increase of 22% from a year ago.

“Our efforts to reach out to customers and help them save money and choose the best products for them are working,” said Downe. “We have narrowed the gap to the industry leader on both personal and commercial loyalty scores relative to a year ago.”

BMO said its commercial banking sector continues to experience strong growth while the bank’s market share for loans to small and medium size businesses increased from the prior year.

BMO announced a first-quarter 2010 dividend of 70 cents per common share, a figure which was unchanged from the previous quarter.

For fiscal 2009, BMO said its net income decreased 9.7% to $1.8 billion.

The bank said its annual net income was lowered by $474 million after-tax due to notable items. These were made up of $355 million in charges related to the capital markets environment, $80 million in severance costs and a $39 million increase in the general allowance for credit losses.

Annual revenue totalled $11.1 billion compared to $10.2 billion in fiscal 2008. Expense control helped boost revenue growth in 2009, but was offset by increased provisions for credit losses and higher income taxes, BMO said.

Also on Tuesday, BMO announced separately it has agreed to buy the Diners Club North American franchise from Citigroup. The deal gives BMO exclusive rights to issue Diners Club cards to corporate and professional clients in the United States and Canada

BMO said the deal will more than double its corporate card business, representing US$7.8 billion in card transactions annually and net receivables of almost US$1 billion.

BMO’s shares closed at $53.55 Monday on the Toronto Stock Exchange.