Summary Quarterly Earnings Trends (Cont'd.)
BMO's quarterly earnings trends were reviewed in detail on pages 96 and 97 of BMO's 2012 annual MD&A. Readers are encouraged to refer to that review for a more complete discussion of trends and factors affecting past quarterly results including the modest impact of seasonal variations in results. Table 14 outlines summary results for the fourth quarter of fiscal 2011 through the third quarter of fiscal 2013.
Periodically, certain business lines and units within the business lines are transferred between client operating groups to more closely align BMO's organizational structure with its strategic priorities. Comparative figures have been restated to conform to the current presentation. In the first quarter of fiscal 2013, we commenced charging provisions for credit losses to the bank's operating groups based on actual credit losses incurred. Previously we had charged the groups with credit losses based on an expected loss provisioning methodology. Prior period results have been restated accordingly.
We have remained focused on embracing a culture that places the customer at the centre of everything we do. Economic conditions were at times challenging for some of our businesses in late 2011 and 2012, but conditions have improved overall and quarterly adjusted results have generally trended higher over the past two years.
P&C Canada third quarter results continued to benefit from strong volume growth in both the personal and commercial segments, improving provisions for credit losses and this quarter, stable net interest margins with higher fee income. The net income trend in previous quarters has been relatively consistent. Revenue and net income were lower in the second quarter of each year due to three fewer days. In previous quarters, net interest margin was declining due to lower deposit spreads in the low-rate environment, and changes in mix including loan growth exceeding deposit growth. Expense increases have been modest, reflecting continued investment in the business.
PCG produced strong results for the quarter. Recent quarterly results in PCG traditional wealth businesses have grown on a relatively consistent basis, driven by growth in client assets and benefits from a continued focus on productivity. Quarterly results in Insurance have been subject to variability, resulting primarily from changes in long-term interest rates.
BMO Capital Markets results are influenced by market factors that can contribute to variability in results. In 2012, results were good in the first three quarters, but the fourth quarter results were significantly stronger, driven by a recovery of prior periods' income taxes and higher revenue due to an improved market environment. This trend has continued in 2013 with good results in each quarter.
P&C U.S. results have benefited from the M&I acquisition as well as increases in commercial loan balances, which had seen minimal growth since the economic downturn that started in 2007. P&C U.S. had very strong results in the first quarter of 2013 and has been relatively stable in the second and third quarters with good core commercial and industrial loan growth and lower expenses compared to the prior year's results. Net interest margin has been declining primarily due to lower deposit spreads given the low-rate environment and loan spreads due to competitive pricing, and growth in lower spread assets.
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