BMO Financial Group put aside a hefty amount of money again to protect itself from bad loans, but still managed to beat expectations and post a $1.23-billion profit in its latest quarter.

The Toronto-based bank said Tuesday that provisions for credit losses amounted to $1.05 billion in its third quarter, up from $306 million last year and down from $1.11 billion last quarter.

Patrick Cronin, the bank’s chief risk officer, attributed the high provisions to the Covid-19 pandemic, but said he has confidence in the bank’s ability to operate in such an environment.

“There continues to be a high degree of uncertainty around the trajectory of the economic recovery, but we feel with this quarter’s addition to our performing loan allowance, we are well prepared and provisioned,” he told analysts.

“We have been pleased with our credit experience so far during this crisis with credit migration, payment deferral expiry and impaired loan loss provisions well within expectations and utilization rates back to normal levels.”

Cronin’s comments came as the bank earned $1.81 per share for the quarter, down from a profit of $1.56 billion or $2.34 per share a year ago.

Revenue was $7.19 billion, up from $6.67 billion.

On an adjusted basis, BMO says it earned $1.85 per share for the quarter, down from an adjusted profit of $2.38 per share in the same quarter last year.

Analysts on average had expected an adjusted profit of $1.71 per share for the quarter, according to financial markets data firm Refinitiv.

On top of beating expectations, chief executive Darryl White said he has several reasons to be optimistic.

BMO’s wealth management business, for example, saw its net income climb by $91 million or 37% from the previous year to reach $341 million.

Its capital market business reported a $426-million net income, up by $112 million or 36% from the prior year.

The bank is also set to become one of eight U.S. banks to offer mobile-first chequing accounts managed via Google Pay in 2021.

“We have the appropriate defensive positioning for an uncertain environment with our diversified business model, meaningful performing loan coverage and more capital than we had before Covid,” White said.

“At the same time, our operating momentum has been tested and proven to remain among the best-in-class, setting us up well for the eventual economic recovery.”