Bank of Montreal said today its third-quarter profit rose 30% on strong credit performance.

Net income for the quarter was $654 million, or $1.24 per share, up from $504 million, or 95¢, in the year-before period.

The profit increase was driven by a $200-million improvement in credit performance, volume-based revenue growth and cost containment.

“Our net income continues to grow strongly,” CEO Tony Comper said in a news release.

“We have increased earnings for the ninth consecutive quarter and, although improving credit performance was a significant contributor to results, our strengths were broadly based. Both the personal and commercial and investment banking client groups contributed their highest quarterly earnings ever, while the private client group’s net income remained strong, despite some recent softening in equity markets.”

The bank said it now expects its fiscal 2004 earnings per share to exceed the 10% to 15% previously forecast.

BMO raised its quarterly dividend by 10% from40¢ to 44¢ from 40¢.

Earlier today, the bank said it will boost its dividends and redeem a series of class-B preferred shares on Sept. 30 in a move that will cost about $408 million.