BMO Financial Group set another record in fiscal 2006, as profit rose by 11% to $2.66 billion.

The bank raised its quarterly dividend by 33% to 65¢ a share as Tony Comper also announced today that he would retire in March 2007 as president and CEO.

For the fourth quarter ended October 31, the bank announced net income of $696 million, up $32 million or 4.8%, with a return on equity of 19.4%.

Cash earnings per share, a measure that can make comparisons easier between reporting periods, and which analysts focus on, were $1.37, a rise of 5¢, or 3.8%.

Provisions for credit losses decreased to $16 million in the fourth quarter from $57 million in the same period a year ago.

The bank’s net interest margin, a key measure of lending profitability, decreased by 7 basis points to 1.51% from the fourth quarter of 2005 and was down 5 basis points from the third quarter of 2006.

The bank was hit hard in the U.S. market in the fourth quarter, where the income of the Personal and Commercial Banking division fell by $11 million to $23 million due to a weaker U.S. dollar, the cost of integrating acquisitions and expensive technology improvements in its branches.

Income of the bank’s Private Client Group rose by 12% to $12 million, excluding gains on asset sales in 2005, due to higher mutual fund fees and interest revenues.

The bank expects moderate growth in the Canadian economy in 2007. The Canadian housing market is expected to slow as past increases in interest rates dampen sales and construction. But business investment is expected to remain strong, due to continued healthy gains in corporate profits.

The U.S. economy is also expected to grow moderately in 2007, boosted by a drop in energy prices. Mortgage rates will keep a damper on the housing market, but business loans are expected to grow.