Bank of Montreal is reporting an improved profit for the first quarter ended January 31.

Quarterly profit at the bank rose by 34%, based on a small increase in revenue and big reductions in credit losses.

Net income was $532 million, or $1.02 a share, , compared with $399 million, or 77 cents a share, a year earlier.

Revenue was $2.36 billion, compared with $2.28 billion.

The provision for credit losses fell to $15 million from $150 million, “due to favourable credit performance in the first quarter and improving U.S. economic conditions.”

The bank cut costs by $12 million, and $18 million of the increased profit was due to accounting and tax changes.

“Although net interest margin is under pressure due to low interest rates and the competitive environment, we are continuing to benefit from better credit performance and our focus on improving productivity,” Tony Comper, chairman and CEO, said in a news release.

The bank announced a 5¢ in the dividend, to 40¢ a share.

BMO was the first of the Canadian banks to report results for fiscal 2004. Other banks will report later this week or next week.