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UPDATE 1-Bank of Montreal profit inches higher; dividend raised

Tuesday, 3 Dec 2013 | 8:44 AM ET

* Wealth management drives profit; result tops estimates

* Bank raises dividend by 2.7 percent

* Canada's No. 4 bank is nation's first lender to report results for quarter

TORONTO, Dec 3 (Reuters) - Bank of Montreal said on Tuesday that its quarterly earnings rose 1 percent, topping estimates, after stronger wealth management results offset weaker income from the brokerage and U.S. Harris Bank units.

BMO, Canada's No. 4 bank and the nation's first lender to report results for the period, also raised its quarterly dividend by 2.7 percent to 76 Canadian cents a share.

Net profit rose to $1.09 billion ($1.02 billion), or C$1.62 a share, in the fourth quarter ended Oct. 31 from C$1.08 billion, or C$1.59 a share, a year earlier.

Excluding items such as C$37 million in integration costs from the 2011 purchase of Wisconsin lender Marshall & Illsley, the bank earned C$1.64 a share.

That topped the analysts' average estimate of C$1.58 a share, according to Thomson Reuters I/B/E/S.

Profit from the wealth management division nearly doubled to C$312 million from C$164 million, with strong financial markets and a robust U.S. dollar boosting assets under management by 14 percent.

But earnings at BMO Harris Bank fell 28 percent to US$102 million, which its parent attributed to weaker revenue and higher-than-normal commercial loan loss provisions.

Profit at BMO Capital Markets, the bank's brokerage unit, dropped 27 percent to C$229 million. Securities gains and stock underwriting fees fell, and trading revenue decreased from a strong year-earlier quarter.

BMO's flagship Canadian retail bank earned C$469 million, up 6 percent, as loan growth more than made up for narrowing interest margins. Retail banking has been a strength for Canadian lenders in spite of concerns that a slowing housing market and low interest rates would pinch profit.

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