Bank Of Montreal · TSX:BMO
Bank Of Montreal — Debt Investor Presentation (December 2014)
30 slides from Bank Of Montreal's debt investor presentation, Dec 15, 2014
Slide 1: Q4 14 Fixed Income Investor Presentation
Q4 14 Fixed Income Investor Presentation December 15, 2014
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: BMO Financial Group
BMO Financial Group 8th largest bank in North America1 with an attractive and diversified business mix F2014 Results * Adjusted2 Reported Who we are Revenue ($B) 16.7 16.7 Established in 1817, Canada’s first bank Net Income ($B) 4.5 4.3 EPS ($) 6.59 6.41 In Canada: a full service, universal bank
Slide 4: Clear and Consistent Strategy
Clear and Consistent Strategy 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 quality earnings growth. 4 Expand strategically in select gl
Slide 5: Operating Group Overview
Operating Group Overview Canadian Personal & Commercial Banking U.S. Personal & Commercial Banking • Provides a full range of financial products and • Over 600 branches; 1,300 ABMs services to more than seven million customers • U.S. Midwest footprint includes: Illinois, Wisconsin, • Over 900 branch
Slide 6: Advantaged Business Mix
Advantaged Business Mix Diversified by both customer segment and geography F2014 Operating Group F2014 Adjusted Net Income1 Revenue* by Geography * Excludes Corporate Services Adjusted measures are non-GAAP measures. See slide 2 of this document, page 32 of BMO’s 2014 Annual MD&A and page 19 of BMO’
Slide 7: BMO's Strategic Footprint
BMO’s Strategic Footprint Combined population and GDP of BMO’s U.S. Midwest States is greater than Canada BMO’s strategic footprint is anchored by our business in the heartland of the continental economy. Our three operating groups serve individuals, businesses, governments and corporate customers r
Slide 8: Reasons to Invest in BMO
Reasons to Invest in BMO Clear opportunities for growth across a diversified North American footprint Large North American commercial banking business with advantaged market share Good momentum in our well-established Canadian Personal & Commercial Banking business Award-winning wealth franc
Slide 9: Proven Strength in Commercial Banking
Proven Strength in Commercial Banking Commercial loan growth remains robust across our large North American platform Canadian P&C U.S. P&C Strong commercial lending growth1, balances up 10% Large-scale, relationship-based national commercial from F2013 banking business continues to deliver stron
Slide 10: Continued Momentum in our Canadian P&C Banking Business
Continued Momentum in our Canadian P&C Banking Business Record earnings of $2B, up 11% on good revenue growth and 2.1% operating leverage Adjusted efficiency ratio1 of 50.1% improved 90 bps from F2013 Commercial loans2 up 10% and Personal loans3 up 7% from F2013 Highly experienced team of co
Slide 11: Wealth Management
Wealth Management Strong wealth franchise with attractive growth prospects; contributes over 20% of total bank revenue Assets under management and administration of $794B BMO Nesbitt Burns (Full-service brokerage) Best Full Service Investment Advisory in Canada Wealth Management (Global Banking
Slide 12: Balanced and Disciplined Approach to Capital Management
Balanced and Disciplined Approach to Capital Management Common Equity Tier 1 Ratio of 10.1% increased by ~50 bps from Common Equity Tier 1 Ratio (%) Q3’14 due to CET1 capital increase of ~35 bps and RWA reduction of ~ 15 bps: Higher CET1 capital mainly driven by retained earnings growth and AOCI
Slide 13: F2014 - Financial Highlights
F2014 - Financial Highlights Record Adjusted Net Income of $4.5B with EPS growth of 6% Adjusted EPS up 6%; net income up 5% Adjusted ($B) 1,2 F2013 F2014 Good operating group performance Revenue 15.4 16.7 Revenue increased 9% mainly due to growth in Canadian P&C, Wealth Management and BMO Capi
Slide 14: Loan Portfolio Overview
Loan Portfolio Overview Gross Loans & Acceptances By Industry Canada & US Total % of Total Loans are well diversified by Other1 geography and industry (C$B) Residential Mortgages 93.0 8.0 101.0 33% Personal Lending 49.0 15.1 64.1 21% Credit Cards 7.5 0.5 8.0 3% Total Consumer 149.5 23.6 173.1 57%
Slide 15: Economic Outlook and Indicators
Economic Outlook and Indicators Canada United States Eurozone Economic Indicators (%)1 2013 2014E 2015E 2013 2014E 2015E 2013 2014E 2015E GDP Growth 2.0 2.4 2.4 2.2 2.3 3.0 -0.4 0.8 1.0 Inflation 0.9 2.0 1.7 1.5 1.6 1.4 1.4 0.5 0.7 Interest Rate (3mth Tbills) 0.97 0.91 0.96 0.06 0.03 0.25 0.15 0.18
Slide 16: The Canadian Housing Market Remains Healthy
The Canadian Housing Market Remains Healthy Consistent immigration flows into Canada Immigration to Canada Canadian Household Debt to GDP continue to drive household demand 100 The prime-home buying age group 280,000 95 (30 to 34 year olds) is growing about 90 twice as fast as the general 240,00
Slide 17: Canadian Residential Mortgages – A Snapshot of Key Features
Canadian Residential Mortgages – A Snapshot of Key Features Structure of Canadian residential mortgage market lower risk compared to U.S. due to: No lending with loan to value above 80% without government backed insurance Shorter terms (i.e.,1-10 years) Prepayment charges borne by the borrow
Slide 18: Canadian Residential Mortgages
Canadian Residential Mortgages Total Canadian residential mortgage portfolio at $93.0B represents 43% of Canadian gross loans and acceptances 63% of the portfolio is insured Loan-to-value (LTV)1 on the uninsured portfolio is 58%2 68% of the portfolio has an effective remaining amortization o
Slide 19: BMO's Canadian Consumer Loan Portfolio
BMO’s Canadian Consumer Loan Portfolio BMO’s Canadian consumer loan portfolio is well Total Canadian Consumer Loans: Q4’14 $150B (88% is secured) diversified, supported by prudent historical and current adjudication practices Consumer loans as a percentage of total bank loans is the lowest of pe
Slide 20: Liquidity and Funding Strategy
Liquidity and Funding Strategy BMO’s Cash and Securities to Total Assets Ratio reflects a strong liquidity position BMO’s large base of customer deposits, along with our strong capital base, reduces reliance on wholesale funding Cash and Securities to Total Assets Ratio (%) 1 Core and Customer D
Slide 21: Diversified Wholesale Term Funding Mix
Diversified Wholesale Term Funding Mix BMO's wholesale funding principles seek to match the term of assets with the term of funding. Loans for example are funded with customer deposits and capital, with any difference provided by longer-term wholesale funding BMO has a well diversified wholesale
Slide 22: Appendix
APPENDIX Fixed Income Investor Presentation | F2014 22
Slide 23: Canadian Personal & Commercial Banking
Canadian Personal & Commercial Banking Record annual earnings with strong organic volume growth; good momentum heading into 2015 F2014 Financial Highlights Revenue and Adjusted Net Income1 ($MM) Adjusted net income1 up 11% to over $2.0B, and operating leverage of 2.1% Adjusted efficiency2 improv
Slide 24: U.S. Personal & Commercial Banking
U.S. Personal & Commercial Banking Improved trends in revenue and earnings in second half of F2014 (Amounts in US$MM) Adjusted Net Income1 and Revenue ($MM) F2014 Financial Highlights Adjusted net income1 up 3% driven by continued strong performance from commercial Loans up $3.4B or 7% Personal
Slide 25: Wealth Management
Wealth Management Strong underlying growth across the business with earnings1 up 15% Adjusted Net Income2 and Revenue ($MM) F2014 Financial Highlights Adjusted net income of $848MM compared to $857MM a year ago; prior year included a $121MM after-tax security gain 857 848 Revenue in traditional
Slide 26: BMO Capital Markets
BMO Capital Markets Results reflect the benefit of a diversified business mix F2014 Financial Highlights Adjusted Net Income1 and Revenue ($MM) Adjusted net income1 of $1.1B up 3% with strong ROE of 19.2% and continued progress on U.S. strategy Revenue up 10% reflecting diversified growth across
Slide 27: Provision for Credit Losses (PCL)
Provision for Credit Losses (PCL) PCL By Operating Group Q4 13 Q3 14 Q4 14 (C$MM) Consumer – Canadian P&C 114 110 113 Operating groups had stable or Commercial – Canadian P&C 52 24 20 improving results Total Canadian P&C 166 134 133 Consumer – US P&C 55 30 32 PCL increased Q/Q due to lower Comme
Slide 28: Corporate Governance
Corporate Governance Comprehensive code of business conduct and ethics, FirstPrinciples, guides conduct and ethical decision-making by our directors, officers and employees Governance practices reflect emerging best practices and BMO meets or exceeds legal, regulatory, TSX and NYSE requirements
Slide 29: Adjusting Items
Adjusting Items Adjusting1 items – Pre-tax ($MM) Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 F2013 F2014 Credit-related items on the purchased performing loan portfolio 49 - - - - 406 - Acquisition integration costs (60) - - (9) (11) (251) (20) Amortization of acquisition-related intangible assets (31) (31) (28)
Slide 30: 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 of Corporate Communications and Investor Relations 416.867.6656 sharon.hawardlaird@bmo.com ANDREW CHIN Director, Investor Relations 416.867.7019 andrew.c
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