The bank’s provision for credit losses amounted to $1.05 billion.

BMO Financial Group’s second-quarter profit rose from a year ago even as its Canadian banking and capital markets divisions saw income drop due to tariff-related uncertainty.

The bank on Wednesday reported net income of $1.96 billion, up from $1.87 billion in the same quarter last year, with the biggest boost coming from lower losses in its corporate segment after a spike in acquisition costs a year ago.

It also announced an eight-cent, or 5%, increase in its quarterly dividend to $1.63 per common share.

But overall, the bank’s earnings reflect hesitant consumers and businesses given the unpredictable trade policies of U.S. President Donald Trump.

“The economic backdrop in North America continues to be challenged by the uncertain environment,” said chief executive Darryl White.

“Business activity and loan demand in both countries is reflecting the impact from trade uncertainty, and businesses are being cautious around the deployment of capital.”

The uncertainty has led to an increase from last year in the amount of money BMO has set aside for potentially bad loans, with provisions of $1.05 billion in the quarter, up from $705 million a year ago.

The bank’s provisions, however, are down from two quarters ago, including in the impaired provisions category — where it isn’t confident it will be repaid — which were $765 million, down from $1.11 billion two quarters ago.

The drop from the recent peak came as businesses are showing signs of optimism that the trade issues could be resolved, said Nadim Hirji, BMO’s head of commercial banking.

The bank says profit amounted to $2.50 per diluted share for the quarter ended April 30, up from $2.36 per diluted share a year earlier.

Revenue totalled $8.68 billion, up from $7.97 billion in the same quarter last year.

On an adjusted basis, BMO says it earned $2.62 per share in its latest quarter, up from an adjusted profit of $2.59 per share a year ago.

Analysts on average had expected BMO to earn an adjusted profit of $2.53 per share, according to LSEG Data & Analytics.