BMO Financial quarterly profit rises on capital markets strength

Canadian bank BMO Financial reported a rise in third-quarter profit on Tuesday, as volatility in the financial markets helped boost performance in its capital markets business.

Macroeconomic uncertainty fueled by the conflict in the Middle East kept financial markets volatile in the reported quarter while an easing of trade worries also lifted sentiment.

Choppy markets tend to benefit trading desks at large banks as investors constantly rejig portfolios to hedge against risks.

BMO Financial's capital markets unit reported an adjusted net income of C$649 million in the reported quarter, a jump of 45% over the year-ago period.

The bank kicks off third-quarter earnings for Canadian lenders, with Bank of Nova Scotia set to report results later in the day.

BMO Financial reported an adjusted profit of C$2.86 billion ($2.06 billion), or C$3.96 per share, in the three months ended July 31, compared with C$2.4 billion, or C$3.23 per share, a year earlier.

($1 = 1.3857 Canadian dollars)