Decent Second Quarter for Bank of Montreal, Although Expenses Set to Rise a Bit Faster

Narrow-moat-rated Bank of Montreal reported decent fiscal second-quarter earnings. Adjusted earnings per share were CAD 3.23, essentially in line with the CapIQ consensus and representing year-over-year growth of 3%. Provisioning remained quite low, at a net cost of only CAD 50 million while the PCL ratio was only 4 basis points. We would expect these numbers to start normalizing higher eventually, but predicting the timing of such a normalization in credit remains difficult.