BMO Financial Group raised its dividend as it reported a profit of $2.3 billion in the fourth quarter, boosted in part by a reduction in provisions for bad loans as it works to adjust its U.S. banking operations.

The bank has been trying to improve its U.S. loan book after credit performance deteriorated last year, and says it has made notable improvements.

The bank’s provisions for impaired loans in its U.S. division were down to $209 million in the quarter, from $446 million last year.

Along with loan optimization, the bank has hired over 100 commercial bankers and private advisers in the U.S. over the past year to help drive future loan growth.

In the quarter, the bank also announced the sale of 138 branches in the U.S. where it saw lower growth potential, along with plans to open 150 new branches over the next five years where it sees better prospects.

The focus on the U.S. follows on BMO’s 2023 acquisition of Bank of the West for US$16.3 billion that dramatically increased its footprint in the country.

The bank reported an adjusted return on equity for the year of 11.3%, up from 9.8% last year, but still well off its target of at least 15%.

The bank’s turnaround efforts in the U.S. helped that division earn $807 million, up from $281 million in the same quarter last year.

Its Canadian personal and commercial banking business earned $752 million, up from $750 million a year ago, as provisions rose there.

Like other banks, BMO benefited from higher capital markets activity to see earnings jump to $521 million, up from $251 million in the same quarter last year.

Overall, revenue for the quarter totalled $9.34 billion, up from $8.96 billion last year, while the bank’s provision for credit losses totalled $755 million, down from $1.52 billion a year ago.

On an adjusted basis, BMO says it earned $3.28 per diluted share, up from an adjusted profit of $1.90 per diluted share in the same quarter last year.

Analysts on average had expected an adjusted profit of $3.03 per share, according to estimates compiled by LSEG Data & Analytics.

BMO raised its dividend, saying it will now pay a quarterly dividend of $1.67 per share, an increase of four cents per share.