Bank Of Montreal · TSX:BMO
Bank Of Montreal — BMO Financial Group — Q3 2019 Earnings Presentation
25 slides from Bank Of Montreal's earnings presentation, Aug 27, 2019
Slide 1: BMO Financial Group Investor Presentation Q3 19
BMO Financial Group Investor Presentation For the Quarter Ended July 31, 2019 August 27, 2019 Q3 19
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: Darryl White, Chief Executive Officer
Darryl White Chief Executive Officer
Slide 4: Q3 2019 - Financial Highlights
Q3 2019 - Financial Highlights Adjusted1 Reported • Adjusted1 PPPT2 growth of 5% with good Net Income $1,582MM $1,557MM growth in our P&C businesses and Capital Markets EPS $2.38 $2.34 • YTD Adjusted1 EPS up 5% Y/Y Operating 0.5% 0.7% • Adjusted1 efficiency ratio3 59.9% Leverage3 PCL – Impaired $243
Slide 5: U.S. Operations
U.S. Operations U.S. segment continuing to deliver strong results Figures that follow are on a U.S. dollar basis U.S. Segment Reported Adjusted1 • U.S. segment adjusted1 year-to-date (US$MM) Q3 19 Q2 19 Q3 18 Q3 19 Q2 19 Q3 18 earnings up 24% Revenue (teb) 1,581 1,526 1,425 1,581 1,526 1,425 ‒ Posit
Slide 6: Differentiating strengths driving competitive advantage
Well-established U.S. Presence Differentiating Digital Core Strengths in Commercial Investment strengths and Innovation and Wealth Management driving Integrated North American Platform competitive advantage Unique Creating Approach Sustainable to Cross-border Efficiency Banking Strategic Highlights
Slide 7: Financial Results Q3 19
Financial Results For the Quarter Ended July 31, 2019 Tom Flynn Chief Financial Officer Q3 19
Slide 8: Q3 2019 - Financial Highlights
Q3 2019 - Financial Highlights Strong PPPT4 growth in P&C businesses; positive total bank operating leverage • Adjusted1 EPS $2.38, up 1% Y/Y (reported $2.34, up 1%) Reported Adjusted1 ($MM) Q3 19 Q2 19 Q3 18 Q3 19 Q2 19 Q3 18 • Adjusted1 and reported net income up 1% Y/Y 2 Net Revenue 5,779 5,652 5
Slide 9: Strong Capital Position
Strong Capital Position Capital position strong with CET1 Ratio at 11.4% Common Equity Tier 1 Ratio +27 bps -24 bps +10 bps 11.4% 11.3% Q2 2019 Internal capital Higher source Lower deductions Q3 2019 generation currency RWA and other Basis points may not add due to rounding • CET1 Ratio of 11.4% at
Slide 10: Canadian Personal & Commercial Banking
Canadian Personal & Commercial Banking Strong PPPT2 growth with 1.9% operating leverage and continued balance momentum • Adjusted1 and reported net income up 1% Y/Y Reported Adjusted1 ($MM) Q3 19 Q2 19 Q3 18 Q3 19 Q2 19 Q3 18 • Strong adjusted1 and reported PPPT2 growth of 8% Y/Y Revenue (teb) 2,048
Slide 11: U.S. Personal & Commercial Banking
U.S. Personal & Commercial Banking Strong PPPT3 growth and operating leverage Figures that follow are in U.S. dollars Reported Adjusted1 (US$MM) Q3 19 Q2 19 Q3 18 Q3 19 Q2 19 Q3 18 • Adjusted1 and reported net income down 1% Y/Y on higher PCL Revenue (teb) 1,029 990 976 1,029 990 976 Total PCL 73 17
Slide 12: BMO Capital Markets
BMO Capital Markets Continued strong performance from I&CB and U.S. segment • Adjusted1 net income up 5% Y/Y (reported up 4%) Reported Adjusted1 ($MM) Q3 19 Q2 19 Q3 18 Q3 19 Q2 19 Q3 18 • Revenue up 9% Y/Y, 8% excluding impact of stronger U.S. dollar Trading Products 665 719 639 665 719 639 I&CB 53
Slide 13: BMO Wealth Management
BMO Wealth Management Results impacted by lower contribution from Insurance • Adjusted1 and reported net income down 14% Y/Y Reported Adjusted1 ($MM) Q3 19 Q2 19 Q3 18 Q3 19 Q2 19 Q3 18 • Adjusted1 Traditional Wealth net income up 10% Y/Y 2 (reported up 11%) Net Revenue 1,226 1,281 1,271 1,226 1,281
Slide 14: Corporate Services
Corporate Services • Reported and adjusted1 net loss of $21MM for the quarter Reported2 Adjusted1,2 compared with a reported net loss of $60MM and ($MM) Q3 19 Q2 19 Q3 18 Q3 19 Q2 19 Q3 18 adjusted1 net loss of $55MM in the prior year Revenue 14 (17) 3 14 (17) 3 • Results benefited from lower expens
Slide 15: Risk Review Q3 19
Risk Review For the Quarter Ended July 31, 2019 Patrick Cronin Chief Risk Officer Q3 19
Slide 16: Provision for Credit Losses (PCL)
Provision for Credit Losses (PCL) PCL By Operating Group • Q3’19 PCL ratio on Impaired Loans at 22 bps, Q3 19 Q2 19 Q3 18 ($MM) up 8 bps Q/Q, (up 4 bps excluding the prior quarter’s U.S. P&C Commercial recovery) Consumer – Canadian P&C 133 107 96 • Allowance for Credit Losses on Performing Commercia
Slide 17: Gross Impaired Loans (GIL) and Formations
Gross Impaired Loans (GIL) and Formations • GIL ratio 55 bps, up 2 bps Q/Q Formations Gross Impaired Loans By Industry ($MM, as at Q3 19) Canada & Canada & U.S. Total U.S. Total Other Other1 Formations ($MM) Consumer 217 91 308 516 398 914 Oil & Gas 0 141 141 10 314 324 741 679 522 443 467 Service I
Slide 18: Loan Portfolio Overview
Loan Portfolio Overview Gross Loans & Acceptances By Industry Canada & U.S. Total % of Total • Loans are well diversified by Other1 ($B, as at Q3 19) geography and industry Residential Mortgages 110.5 11.6 122.1 27% Consumer Instalment and Other 54.9 11.1 66.0 15% Personal Cards 8.2 0.5 8.7 2% Total
Slide 19: Appendix
APPENDIX
Slide 20: Canadian Personal and Commercial Banking - Balances
Canadian Personal and Commercial Banking - Balances Average Gross Loans & Acceptances ($B) Average Deposits ($B) 234.9 239.3 224.8 177.1 171.2 159.8 99.7 100.7 101.1 107.5 111.5 99.5 46.2 46.8 45.3 8.9 9.4 8.9 79.1 82.0 60.3 63.7 65.6 70.9 Q3'18 Q2'19 Q3'19 Q3'18 Q2'19 Q3'19 Residential Mortgages Co
Slide 21: U.S. Personal & Commercial Banking – Balances
U.S. Personal & Commercial Banking – Balances Average Gross Loans & Acceptances1 (US$B) Average Deposits1 (US$B) 89.72 85.92 79.1 80.5 5.5 Personal 79.42 5.0 Loans 4.5 11.3 70.5 11.2 11.5 34.7 34.0 29.1 Commercial 69.2 72.4 Loans 62.7 45.1 45.8 41.4 Q3'18 Q2'19 Q3'19 Q3'18 Q2'19 Q3'19 Commercial Per
Slide 22: Canadian Residential-Secured Lending (RESL)
Canadian Residential-Secured Lending (RESL) Residential-Secured Lending by Region ($143.5B) • Total Canadian residential-secured lending portfolio at $143.5B, representing 32% of total loans $63.9 HELOC ─ LTV1 on uninsured of 51% Uninsured Mortgages 24% $27.9 ─ 90 day delinquency rate for RESL remai
Slide 23: Trading-related Net Revenues and Value at Risk
Trading-related Net Revenues and Value at Risk May 1, 2019 to July 31, 2019 (pre-tax basis and in millions of Canadian dollars) 35 30 25 20 15 10 5 0 (5) (10) (15) Daily Revenue Total Trading VaR Risk Review August 27, 2019 23
Slide 24: Adjusting Items
Adjusting Items Adjusting items1 - Pre-tax ($MM) Q3 19 Q2 19 Q3 18 YTD Q3 19 YTD Q3 18 Amortization of acquisition-related intangible assets2 (29) (30) (28) (90) (85) Acquisition integration costs2 (3) (2) (8) (11) (16) Restructuring costs3 - - - - (260) Adjusting items included in reported pre-tax
Slide 25: Investor Relations
Investor Relations Contact Information bmo.com/investorrelations E-mail: investor.relations@bmo.com JILL HOMENUK TOM LITTLE Head, Investor Relations Director, Investor Relations 416.867.4770 416.867.7834 jill.homenuk@bmo.com tom.little@bmo.com