Bank Of Montreal · TSX:BMO
Bank Of Montreal — Q3 2017 Earnings Presentation
26 slides from Bank Of Montreal's earnings presentation, Aug 29, 2017
Slide 1: Investor Presentation Q3 17
Investor Presentation For the Quarter Ended July 31, 2017 August 29, 2017 Q3 17 Financial Results Month xx, 2015 1
Slide 2: Forward looking statements & non-GAAP measures
Forward looking statements & non-GAAP measures Caution Regarding Forward-Looking Statements Bank of Montreal’s public communications often include written or oral forward-looking statements. Statements of this type are included in this document, and may be included in other filings with Canadian sec
Slide 3: Strategic Highlights
Strategic Highlights For the Quarter Ended July 31, 2017 August 29, 2017 Bill Downe Chief Executive Officer Q3 17 Financial Results Month xx, 2015 3
Slide 4: Q3 2017 Financial Highlights
Q3 2017 Financial Highlights Good results driven by strong growth in Canadian P&C and Wealth Management, solid credit performance • Adjusted1 net income of $1.4B, up 6% Y/Y ($1.4B reported, up 11%) • Adjusted1 EPS of $2.03, up 4% Y/Y (reported $2.05, up 10%) • Year-to-date adjusted1 net income of $4
Slide 5: Operating Group Performance
Operating Group Performance Results demonstrate the continued benefits of our differentiated operating model Operating Group • Strong net income growth in Canadian P&C with Adjusted Net Income – LTM1,2 disciplined and consistent loan and deposit growth BMO CM 23% Canadian • Stable net income and cre
Slide 6: Our priorities are clear
Our priorities are clear Our strategic framework outlines the basic principles that sustain our growth Our Strategic Priorities Sustainability Principles The clearly defined statements of purpose that guide the The guidelines we follow as a responsibly managed bank consider bank’s long-term decision
Slide 7: Financial Results
Financial Results For the Quarter Ended July 31, 2017 August 29, 2017 Tom Flynn Chief Financial Officer Q3 17 Financial Results Month xx, 2015 7
Slide 8: Q3 2017 - Financial Highlights
Q3 2017 - Financial Highlights Net income up Y/Y driven by good contribution from Canadian P&C and Wealth and good credit performance • Reported net income of $1.4B, up 11% Y/Y; EPS of $2.05, up 10% Y/Y • Adjusted1 net income of $1.4B, up 6% Y/Y; EPS of $2.03, up 4% Y/Y • Double digit YTD net income
Slide 9: Strong Capital Position
Strong Capital Position Strong capital with CET1 Ratio at 11.2% Common Equity Tier 1 Ratio +28 bps -24 bps 11.3% -13 bps -1 bp 11.2% 2017 Q2 Internal capital Higher RWA Share repurchases Other 2017 Q3 generation (excluding FX) Basis points may not add due to rounding. • Q3’17 CET1 Ratio of 11.2%, do
Slide 10: Canadian Personal & Commercial Banking
Canadian Personal & Commercial Banking NIAT up 9% Y/Y with good balance growth and lower credit provisions • Net income up 9% Y/Y; YTD net income up 17% Y/Y, with a 10% contribution from a gain on sale3 • Revenue up 5% Y/Y reflecting higher balances and higher non-interest revenue • NIM down 1bp Y/Y
Slide 11: U.S. Personal & Commercial Banking
U.S. Personal & Commercial Banking Q/Q NIAT growth with higher NIM, solid commercial loan growth and lower credit provisions • Adjusted1 net income of $289MM, flat Y/Y (reported $278MM, flat Y/Y) Figures that follow are in U.S. dollars • Adjusted1 and reported net income flat Y/Y; adjusted1 net inco
Slide 12: BMO Capital Markets
BMO Capital Markets Good Y/Y I&CB revenue growth and credit performance • Adjusted1 and reported net income down 8% Y/Y; YTD net income up 15% Y/Y • Revenue down 1% Y/Y – Investment and Corporate Banking benefited from good merger and acquisition advisory activity and higher corporate banking-relate
Slide 13: BMO Wealth Management
BMO Wealth Management Good Y/Y net income growth • Adjusted1 net income of $279MM, up 23% Y/Y (reported $264MM, up 32% Y/Y) – Traditional Wealth up 17% Y/Y (reported up 28%) with underlying business growth and improved equity markets – Insurance earnings up 43% Y/Y with modest favourable market move
Slide 14: Corporate Services
Corporate Services • Adjusted1 net loss of $102MM compared to a net loss of $101MM in the prior year. Reported net loss of $61MM compared to a net loss of $111MM in the prior year • Current quarter reported results include a decrease in the collective allowance of $54MM after-tax3 • Adjusted1 net lo
Slide 15: Risk Review
Risk Review For the Quarter Ended July 31, 2017 August 29, 2017 Surjit Rajpal Chief Risk Officer Q3 17 Financial Results Month xx, 2015 15
Slide 16: Provision for Credit Losses (PCL)
Provision for Credit Losses (PCL) PCL By Operating Group Q3 17 Q2 17 Q3 16 • Q3’17 Specific PCL ratio at 22 bps, down 6 ($MM) bps Q/Q primarily due to a decrease in Consumer – Canadian P&C 102 104 106 Capital Markets and US P&C losses Commercial – Canadian P&C 23 24 46 • Year-to-date Specific PCL ra
Slide 17: Gross Impaired Loans (GIL) and Formations
Gross Impaired Loans (GIL) and Formations Formations Gross Impaired Loans • GIL ratio 56 bps, down 7 bps Q/Q By Industry ($MM, as at Q3 17) Canada & Canada & U.S. Total U.S. Total Other Other1 Consumer 164 76 240 371 525 896 Agriculture 6 20 26 59 209 268 Oil & Gas 0 3 3 90 109 199 Service Industrie
Slide 18: Canadian Residential Mortgages
Canadian Residential Mortgages • Total Canadian residential mortgage portfolio at $105.8B, representing 28% of total loans ─ 52% of the portfolio is insured; Loan-to-value (LTV)1 on the uninsured portfolio is 52% ─ 69% of the portfolio has an effective remaining amortization of 25 years or less ─ Le
Slide 19: Loan Portfolio Overview
Loan Portfolio Overview Gross Loans & Acceptances Canada & By Industry U.S. Total % of Total • Loans are well diversified by Other1 ($B, as at Q3 17) geography and industry Residential Mortgages 105.8 8.2 114.0 30% Consumer Instalment and Other 51.8 9.7 61.5 17% Personal Cards 7.6 0.5 8.1 2% Total C
Slide 20: Appendix
Appendix Financial Results Month xx, 2015 20
Slide 21: Canadian Personal and Commercial Banking - Balances
Canadian Personal and Commercial Banking - Balances Average Loans & Acceptances ($B) Average Deposits ($B) 214.1 216.9 207.2 98.3 99.2 95.0 151.4 154.1 142.9 44.1 44.7 44.9 96.7 98.3 91.5 8.7 8.6 8.9 59.4 62.5 63.9 51.4 54.7 55.8 Q3'16 Q2'17 Q3'17 Q3'16 Q2'17 Q3'17 Commercial Loans & Acceptances Cre
Slide 22: U.S. Personal & Commercial Banking – Balances
U.S. Personal & Commercial Banking – Balances Average Loans & Acceptances (US$B) Average Deposits (US$B) 76.8* 75.9* 75.2* 5.3 5.3 5.2 10.0 9.7 9.6 Personal 67.2 65.4 65.4 Loans 5.0 5.0 5.0 5.7 3.3 3.2 2.2 1.9 1.9 26.3 23.1 23.3 Commercial 48.6 50.0 51.0 Loans 40.9 42.3 42.1 Q3'16 Q2'17 Q3'17 Q3'16
Slide 23: Oil and Gas and Alberta Consumer Portfolios
Oil and Gas and Alberta Consumer Portfolios Oil and Gas Balances – By Sector Oil and Gas – Corporate/Commercial ($B, as at Q3 17) • Oil and Gas loans of $7.5B and $9.1B in undrawn exposure1, of which more than half $0.6 is investment grade 8% • Portfolio represents 2% of total bank loans Consumer Ex
Slide 24: Trading-related Net Revenues versus Value at Risk
Trading-related Net Revenues versus Value at Risk Risk Review August 29, 2017 24
Slide 25: Adjusting Items
Adjusting Items Adjusting1 items – Pre-tax ($MM) Q3 17 Q2 17 Q3 16 Amortization of acquisition-related intangible assets2 (35) (43) (40) Acquisition integration costs2 (20) (21) (27) Decrease in the collective allowance for credit losses3 76 - - Adjusting items included in reported pre-tax income 21
Slide 26: Investor Relations
Investor Relations Contact Information bmo.com/investorrelations E-mail: investor.relations@bmo.com JILL HOMENUK CHRISTINE VIAU Head, Investor Relations Director, Investor Relations 416.867.4770 416.867.6956 jill.homenuk@bmo.com christine.viau@bmo.com Financial Results Month xx, 2015 26