* Scotiabank Q3 EPS C$1.66 vs forecast C$1.64
* Scotiabank quarterly dividend C$0.79, up C$0.03
* BMO Q3 EPS C$2.05 vs forecast C$2.00
TORONTO, Aug 29 (Reuters) - Canadian lenders Bank of Nova Scotia and Bank of Montreal on Tuesday posted stronger-than-expected quarterly earnings, lifted by robust performances from their domestic businesses.
Canada's bank index has stagnated since the start of the year on concerns that previously red-hot housing markets in Toronto and Vancouver could see sharp declines, exposing lenders to losses on loans.
Despite those worries, four of the country's biggest five banks in recent days have reported profits topping expectations in the third quarter ending on June 30.
Bank of Nova Scotia, Canada's third-biggest lender which is also known as Scotiabank, said quarterly earnings per share increased to C$1.66 ($1.33) from C$1.54 a year earlier. Analysts had on average forecast EPS of C$1.64, according to Thomson Reuters I/B/E/S data.
"The bank delivered strong quarterly earnings, generating double digit growth in our Canadian and international personal and commercial banking businesses," Chief Executive Brian Porter said in a statement.
Bank of Montreal, Canada's fourth-biggest lender, reported EPS of C$2.05, up from C$1.86 a year ago. Analysts had on average expected EPS of C$2.00, according to Thomson Reuters I/B/E/S.
Scotiabank reported net income of C$2.10 billion compared with C$1.96 billion a year ago.
Earnings at its Canadian business rose by 12 percent to C$1.05 billion, benefiting in part from gains on the sale of real estate as well as loan and deposit growth.
The bank's core tier 1 ratio, a key measure of its financial strength, was 11.3 percent, among the highest of major Canadian banks. Porter said this gave the bank "flexibility to grow and invest in our businesses as well as return capital to shareholders."
Scotiabank reported an increase in its quarterly dividend of 3 cents to C$0.79.
RBC analyst Darko Mihelic said he viewed the results as "mildly positive," highlighting the bank's strong capital position and better-than expected dividend increase.
BMO reported net earnings of C$1.4 billion, up 11 percent from the year-earlier quarter.
Net income at its domestic operations was C$614 million, up 9 percent from a year ago. The bank said that reflected increased revenue and lower provisions for bad loans.
Rivals RBC and CIBC reported higher-than-expected quarterly earnings last week.
Toronto-Dominion Bank, Canada's second-biggest lender, is due to publish results on Thursday.
($1 = 1.2462 Canadian dollars) (Reporting by Matt Scuffham, editing by Louise Heavens, Jane Merriman and W Simon)