Bank Of Montreal · TSX:BMO
Bank Of Montreal — Q1 2013 Earnings Presentation
31 slides from Bank Of Montreal's earnings presentation, Feb 26, 2013
Slide 1: Investor Presentation Q1 13
Investor Presentation For the Quarter Ended – January 31, 2013 Q1 13 February 26th 2013
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 – January 31, 2013 Q1 13 February 26th 2013 Bill Downe President & Chief Executive Officer
Slide 4: Q1 2013 Financial Results
Q1 2013 Financial Results Strong Adjusted Net Income over $1B for the third consecutive quarter Reported net income of $1.05B or $1.53 per share Strong adjusted1 results with net income of $1.04B, up 7% Y/Y EPS of $1.52, up 7% Revenue increased 3% to $3.9B ROE of 14.8% Strong capital pos
Slide 5: Operating Group Performance
Operating Group Performance Good operating group performance while advancing our strategic agenda Adjusted1 Net Income C$ millions unless otherwise indicated P & C Banking P & C Banking Private Client BMO Canada U.S. Group Capital Markets (US$) Y/Y 4% 13% 54% 38% Growth 443 461 310 197 224 174 169 1
Slide 6: Strategic Priorities
Strategic Priorities A Clear Vision: to be the bank that defines great customer experience 1 Achieve industry-leading customer loyalty by delivering on our brand promise 2 Enhance productivity to drive performance and shareholder value 3 Leverage our consolidated North American platform to deliver q
Slide 7: Financial Results
Financial Results For the Quarter Ended – January 31, 2013 Q1 13 February 26th 2013 Tom Flynn Executive Vice President & Chief Financial Officer
Slide 8: Q1 2013 - Financial Highlights
Q1 2013 - Financial Highlights Strong Adjusted Net Income of $1.04B, EPS up 7% Adjusted1 Adjusted EPS of $1.52, up 7% Y/Y (C$MM) Q1 13 Q4 12 Q1 12 Adjusted net income up 7% Y/Y driven by performance in Net Income 1,041 1,125 972 groups EPS ($) 1.52 1.65 1.42 P&C Canada income up 4% ROE (%)2 14
Slide 9: Revenue
Revenue Revenue driven by good performance in BMO CM and PCG Q1 adjusted revenue up 3% Y/Y NII down 4% Y/Y reflecting lower P&C NIM and higher than Total Bank Adjusted Revenue (C$MM) usual revenue a year ago from a strategic investment in PCG NIR up 13% driven by BMO CM and PCG 3,920 Strong
Slide 10: Non-Interest Expense
Non-Interest Expense Focused on disciplined expense management Total Bank Adjusted Non-Interest Expense (C$MM) Y/Y adjusted expenses up 4% Higher employee costs and increased 2,378 2,436 2,464 performance-based compensation given improved performance, particularly in BMO CM 772 Salaries 737 748
Slide 11: Capital & Risk Weighted Assets
Capital & Risk Weighted Assets Capital position is strong Q4 12 (2) Basel III Q1 13(1) (pro forma) Common Shareholders’ Equity ($B) Common Equity Tier 1 Ratio (CET1) (%) 9.4 8.7 Tier 1 Capital Ratio (%) 11.1 10.5 Total Capital Ratio (%) 13.4 12.9 25.5 26.2 26.6 RWA ($B) 211 222 24.2 24.5 Transitiona
Slide 12: Personal & Commercial Banking Canada
Personal & Commercial Banking Canada Strong loan growth and continued focus on actively managing productivity Adjusted net income up 4% Y/Y and 3% Q/Q As Reported ($MM) Q1 13 Q4 12 Q1 12 Strong loan growth up 9% Y/Y and 2% Q/Q. Deposit Revenue 1,563 1,558 1,563 growth up 4% Y/Y and 2% Q/Q PCL (A
Slide 13: Personal & Commercial Banking - U.S.
Personal & Commercial Banking - U.S. Good net income growth and positive loan growth Q/Q (Amounts in US$MM) As Reported Q1 13 Q4 12 Q1 12 (US$MM) Adjusted net income up 13% Y/Y and 25% Q/Q Revenue 755 750 778 Loan growth up 2% Q/Q. Strong commercial loan growth with core C&I balances up 18% Y/Y
Slide 14: BMO Capital Markets
BMO Capital Markets Very strong results Y/Y reflect good execution and a more favourable environment Net income up 38% Y/Y; down 2% Q/Q As Reported ($MM) Q1 13 Q4 12 Q1 12 Revenue increased Y/Y driven by higher Trading Products Revenue 538 585 514 mergers and acquisitions and debt underwriting I
Slide 15: Private Client Group
Private Client Group Good financial performance on higher revenues and focused productivity As Reported ($MM) Q1 13 Q4 12 Q1 12 Adjusted net income up 54% Y/Y, flat Q/Q Revenue 779 785 697 Excluding Insurance adjusted net income up 8% Y/Y and 14% Q/Q, due to increased revenue driven by PCL (Actu
Slide 16: Corporate Services
Corporate Services Adjusted results down Y/Y and Q/Q Adjusted1 ($MM) Q1 13 Q4 12 Q1 12 Adjusted Net income lower by $114MM Y/Y Revenue (teb) (137) (66) (79) Adjusted revenues decreased $58MM due to lower security gains, higher teb group offset in the current quarter and a PCL (recovery) (51) (11
Slide 17: Risk Review
Risk Review For the Quarter Ended – January 31, 2013 Q1 13 February 26th 2013 Surjit Rajpal Executive Vice President & Chief Risk Officer
Slide 18: Loan Portfolio Overview
Loan Portfolio Overview Canadian and US portfolios are well diversified by industry Gross Loans & Acceptances Canada & % of Consumer portfolio represents the majority By Industry US Total Other1 Total of loans (C$ B) Consumer loans are 86% in Canada Residential Mortgages 78.6 7.2 85.8 33% and 14
Slide 19: Provision for Credit Losses (PCL)
Provision for Credit Losses (PCL) Lower provisions Q/Q PCL1 Q1’13 Q4’12 Q1’12 By Operating Group (C$ MM) Adjusted and Total PCL down Q/Q by 15% Consumer – P&C Canada 109 123 127 and 7% respectively. Decrease due to: Commercial – P&C Canada 19 23 28 Decline in new reservations Total P&C Canada 12
Slide 20: Gross Impaired Loans (GIL) and Formations
Gross Impaired Loans (GIL) and Formations Impaired Loans and Formations are down Q/Q Formations Gross Impaired Loans Total Bank Formations (excluding purchased By Industry performing portfolio) are $355MM (Q4’12: (C$ MM) Canada & Canada US Total Other2 US Total $428MM) Consumer 155 83 238 367 399
Slide 21: Canadian Residential Mortgages
Canadian Residential Mortgages Geographic distribution Residential Mortgages by % of Total Canadian portfolio $78.6B (Q4’12: $76.7B) Region Insured Uninsured Total Total (C$B) ~63% of the portfolio is insured (Q4’12: ~64%) Atlantic 3.4 1.3 4.7 6% Quebec 7.5 4.1 11.6 15% Average LTV1 of portfol
Slide 22: Trading Revenue vs. VaR
Trading Revenue vs. VaR November 1, 2012 to January 31, 2013 (Presented on a Pre-Tax Basis) 50 30 10 01-Nov-12 07-Nov-12 14-Nov-12 20-Nov-12 26-Nov-12 30-Nov-12 06-Dec-12 12-Dec-12 18-Dec-12 24-Dec-12 02-Jan-13 08-Jan-13 14-Jan-13 18-Jan-13 24-Jan-13 30-Jan-13 (10) Daily Revenues Total Trading VaR T
Slide 23: Appendix
APPENDIX Financial Results | February 26 • 2013 23
Slide 24: Personal & Commercial Banking Canada – Loan Balances
Personal & Commercial Banking Canada – Loan Balances Average Loans & Acceptances1 (C$B) Y/Y Growth 9% 165 169 155 Personal Strong lending growth2 with balances up 9.5% Y/Y and 75 2.4% Q/Q 73 67 12.7% Mortgage balances up 12.7% Y/Y and 3.3% Q/Q Total personal lending2 market share up 16 bps Q/Q
Slide 25: Personal & Commercial Banking Canada – Deposit Balances
Personal & Commercial Banking Canada – Deposit Balances Average Deposits1 (C$B) Y/Y Growth 4% 108 110 106 Personal Deposit balances up 2.6% Y/Y and 0.5% Q/Q Deposit market share2 down 13 bps Q/Q 69 70 70 2.6% Retail operating deposit (excluding Term) market share up 3 bps Q/Q Commercial Good m
Slide 26: Personal & Commercial Banking U.S. – Commercial Balances
Personal & Commercial Banking U.S. – Commercial Balances All amounts in U.S. $B Core C&I ($B) - Average Core Commercial Real Estate ($B) - Average Strong C&I loan growth, with Q1’13 being the 5th straight sequential quarter of growth; growth of 18% since Q1’12 19.9 21.3 18.0 18.8 19.1 New client
Slide 27: Personal & Commercial Banking U.S. – Personal Balances
Personal & Commercial Banking U.S. – Personal Balances All amounts in U.S. $B Mortgages ($B) - Average Home Equity ($B) - Average Mortgage portfolio declined as new Mortgages Serviced Mortgage originations of long term fixed rate loans are sold into the secondary market. 3.9 4.0 4.1 4.2 4.3 Servic
Slide 28: Operating Groups – Q1 2013 Quick Facts
Operating Groups – Q1 2013 Quick Facts 77% of adjusted revenue from retail businesses1 P&C Canada P&C U.S. Net income up 4% Y/Y Adjusted net income3 of US$197MM, up 13% Y/Y and Revenue relatively flat Y/Y and Q/Q with higher volumes 25% Q/Q across most products offset by lower margin Revenue
Slide 29: Group Net Income
Group Net Income Adjusted net income growth of 7% Y/Y Net Income, Adjusted Q/Q Y/Y Q1 13 Q4 12 Q1 12 Inc/(Dec) Inc/(Dec) ($MM) P&C Canada 461 444 443 3% 4% P&C U.S. 195 156 176 26% 11% Total P&C 656 600 619 9% 6% PCG 169 169 109 - 54% BMO Capital Markets 310 315 224 (2)% 38% Corporate Services (94)
Slide 30: Adjusting Items
Adjusting Items Adjusting1 items – Pre-tax ($MM) Q1 13 Q4 12 Q1 12 Credit-related items on the M&I purchased performing loan portfolio 128 57 184 M&I integration costs (92) (153) (70) Amortization of acquisition-related intangible assets (31) (34) (34) Decrease/(increase) in the collective allowance
Slide 31: Investor Relations Contact Information
Investor Relations Contact Information www.bmo.com/investorrelations E-mail: investor.relations@bmo.com Fax: 416.867.3367 SHARON HAWARD-LAIRD Head, Investor Relations 416.867.6656 sharon.hawardlaird@bmo.com ANDREW CHIN Senior Manager 416.867.7019 andrew.chin@bmo.com Financial Results | February 26 •