Canadian Banks BMO and Scotiabank Face Profit Declines Due to Rising Loan Provisions and Costs
Bank of Montreal (BMO) and Bank of Nova Scotia (Scotiabank) missed analysts' estimates for quarterly profit as they set aside more funds to cover bad loans. The Bank of Canada's interest rate hikes have slowed the housing market and increased consumer debt, leading to higher provisions for potential loan losses. BMO's earnings were also affected by severance costs and legal provisions, while Scotiabank highlighted the impact of recessionary conditions on its international business. Both banks experienced a decline in income, but Scotiabank showed improvement in its capital position and expense management. The aggressive rate hikes have allowed banks to charge higher rates and boost net interest income.