The fall was caused by higher provisions for bad loans and rising interest costs.
The central bank's insistence on higher provisions when times were good is muting the effect of higher delinquencies, for now.
In most cases, the declines are a result of restructuring costs and significantly higher provisions for loan losses, especially in investment banking.
Bank of Montreal's first-quarter profit fell 27percentt, hurt by write-downs related to the capital markets and higher provisions for bad loans.
"We'll clearly see slower growth, an increase in overdue loans and a demand for higher provisions," says Alfredo Sáenz, the group's chief executive.
Late Monday, E*Trade disclosed that it was cutting its earnings forecast for 2007 by 30percentt because of higher provisions for loan losses and potential securities impairments related to mortgages.
Aracruz Celulose, Latin America's largest pulp and paper exporter, said that fourth-quarter profit would probably fall 79percentt because of higher provisions for taxes and nonoperating expenses and a decline in international pulp prices.
Deutsche's second-quarter profit of 1.09 billion euros ($1.6 billion), which represented an increase of 68percentt from a year earlier, was tarnished by higher provisions against bad loans to corporate and retail clients.
In contrast with the many banks that have been reporting higher provisions for bad loans along with the sinking economy, HSBC said charges to cover bad debts fell by $716 million, to $1.3 billion for the year.
Citigroup analyst Kimon Kalamboussis said higher provisions had been attributed to corporate clients and individual entrepreneurs.
Credit card operators' losses on receivables have further to go as consumer delinquencies trigger rising credit losses and higher provisions for loss reserves.
