Bank of Montreal on Tuesday reported a decline in third-quarter profit as the Canadian lender set aside more rainy-day funds to cover potential losses from loan defaults.

The bank reported adjusted net income of C$2.04 billion ($1.50 billion), or C$2.78 per share, in the three months ended July 31, compared with C$2.13 billion, or C$3.09 apiece, a year earlier.

($1 = 1.3609 Canadian dollars)

(Reporting by Pritam Biswas in Bengaluru; Editing by Shweta Agarwal)