By Ketki Saxena
Investing.com -- BMO (TSX:BMO) Financial Group and Scotiabank (TSX:BNS), two of Canada's leading banking institutions, have reported their third-quarter financial results for the period ending July 31, 2023, highlighting increased provisions for credit losses.
BMO reported a slight increase in its third-quarter profit compared to the same quarter last year. The bank's net income was $1.45 billion or $1.97 per diluted share, up from $1.37 billion or $1.95 per diluted share a year earlier. Revenue totalled $7.93 billion, marking an increase from $6.10 billion in the same quarter last year. However, BMO's provision for credit losses totalled $492 million, a significant rise from $136 million in its third quarter last year.
On an adjusted basis, BMO earned $2.78 per diluted share, down from an adjusted profit of $3.09 per diluted share a year earlier. Analysts on average had expected an adjusted profit of $3.13 per share, based on estimates compiled by financial markets data firm Refinitiv.
Meanwhile, Scotiabank's third-quarter profit fell compared with a year ago as its provision for credit losses nearly doubled. The bank's net income amounted to $2.21 billion or $1.72 per diluted share for the quarter ended July 31, down from $2.59 billion or $2.09 per diluted share a year earlier.
Scotiabank's revenue for the quarter totalled $8.09 billion, slightly up from $7.80 billion during the same period last year. Its provision for credit losses totalled $819 million in its latest quarter, nearly doubling from $412 million in the same quarter last year.
On an adjusted basis, Scotiabank earned $1.73 per diluted share, down from an adjusted profit of $2.10 per diluted share a year ago. Analysts had expected an adjusted profit of $1.74 per share, according to estimates compiled by Refinitiv.
The increased provisions for credit losses at both banks reflect a growing concern about potential defaults amid economic uncertainties.