BMO earned $776 million, or $1.30 a share, in the fiscal first quarter ended Jan. 31. That compared with a profit of $657 million, or $1.12 a share, in the year-before period.
On a cash basis, the bank earned $1.32 a share, it said.
Analysts polled by Thomson Reuters I/B/E/S had expected, on average, a profit of $1.31 a share.
Profit was driven by increased lending at wider margins, and stronger trading and underwriting fees at its investment bank unit.
Unexpectedly strong loan growth and investment banking revenue led to better-than-expected results from rivals Canadian Imperial Bank of Commerce and National Bank of Canada last week.
Analysts have predicted that retail loan growth would slow this year as borrowers try to reduce debt levels in anticipation of higher interest rates. Business loan growth is expected to be more robust, partially making up for the shortfall.
Profit at BMO's midwest U.S. bank slid 17% due to impaired loans.
BMO has operated the Chicago-based Harris bank for years, and last fall it agreed to buy troubled Wisconsin lender Marshall & Ilsley Corp for around $4.1 billion US.
BMO's revenue rose 10.6% to $3.3 billion, while provisions for loan losses fell 25.6% to C $248 million.
A steady decline in loan losses since the financial crisis has helped boost bank profits over the past year.
BMO's shares, which have slightly outperformed Toronto-listed financial stocks with a 7.8% rise so far this year, closed at C$61.96 Monday.(Reporting by Cameron French, editing by Dave Zimmerman)
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