Bank Of Montreal · TSX:BMO
Bank Of Montreal — BMO Financial Group — Citi U.S. Financial Services Conference 2013
29 slides from Bank Of Montreal's conference presentation, Mar 6, 2013
Slide 1: Citi U.S. Financial Services Conference
Citi U.S. Financial Services Conference Investor Presentation 2013 March 06 2013 Tom Flynn Executive Vice President & Chief Financial Officer
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 Top 10 North American bank1; 2nd largest Canadian bank by retail branches in Canada and the U.S. Who we are Q1 13 Results (C$ billions) Adjusted2 Reported Established in 1817, BMO Financial Group is a highly diversified financial Revenue 3.9 4.1 services provider based in North A
Slide 4: Strategic Footprint
Strategic Footprint BMO’s strategic footprint is anchored by our core business in the heartland of the continental economy BMO facilitates financing, investment and wholesale banking activities between our North American base and strategically located offices in the rapidly growing economies of Asia
Slide 5: Operating Group Overview
Operating Group Overview Personal and Commercial Banking - Canada Over 7 million customers Over 900 branches and access to 2,658 automated banking machines #2 market share position in small and medium sized loans Personal and Commercial Banking – U.S. Over 2 million customers Over 600 bran
Slide 6: Diversified Business Mix with Retail Focus
Diversified Business Mix with Retail Focus Over 75% of F2012 operating group adjusted revenue from personal, commercial and wealth businesses F2012 Adjusted Revenue by F2012 Adjusted Net Income by Operating Group (C$MM) - $15,417MM Operating Group1 (C$MM) - $3,996MM P&C PCG P&C (Wealth PCG (Personal
Slide 7: Proactive and Disciplined Risk Management
Proactive and Disciplined Risk Management Adjusted PCL to Average Net Loans & Acceptances 1.80% 1.60% 1.40% 1.20% 1.00% 0.80% 0.60% 0.40% 0.20% 0.00% 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 BMO Adjusted PCL BMO (exclude M&I purchased portfolio) BMO Historical Avg. (1990
Slide 8: 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 9: 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 ($) 1.52 1.65 1.42 P&C Canada income up 4% ROE (%)2 14.8
Slide 10: Operating Group Performance
Operating Group Performance Good operating group performance while advancing our strategic agenda Adjusted1 Net Income C$ millions unless otherwise indicated P & C Banking P & C Banking Private Client BMO Canada U.S. Group Capital Markets (US$) Y/Y 4% 13% 54% 38% Growth 443 461 310 197 224 174 169 1
Slide 11: Reasons to invest in BMO
Reasons to invest in BMO Well positioned to leverage our North American platform and deliver sustained earnings growth Proven strength in commercial banking across our North American platform Operating leverage from our expanded U.S. platform Strong capital position Well-diversified business
Slide 12: APPENDIX
APPENDIX Citi U.S. Financial Services Conference | March 2013 12
Slide 13: BMO – A Strong Foundation
BMO – A Strong Foundation We have the business platform, balance sheet and expertise to generate quality growth Diversified business mix with retail focus Over 75% of Q1 F2013 operating group revenue from retail businesses Commercial banking is a strength in Canada (#2 in lending) and the U.S.
Slide 14: North American Markets
North American Markets Canada US IL, WI, MN, Western Central Atlantic KS, MO, IN GDP ($B) 643.7 1,000.4 108.2 1,865.8 Population (millions) 10.9 21.6 2.4 39.4 Unemployment Rate (%) 5.2 7.5 10.7 7.3 Avg. Annual Earnings ($) 48,700 45,500 43,100 42,900 Total GDP $1.75 trillion for Western, Central a
Slide 15: Personal & Commercial Banking Canada
Personal & Commercial Banking Canada Strong loan growth and continued focus on actively managing productivity Q1 net income up 4% Y/Y and 3% Q/Q Adjusted Net Income* and Results reflect the combination of good volume Net Interest Margin growth across most products, impact of lower net interest m
Slide 16: P&C Banking Canada – Loan Balances
Personal & Commercial Banking Canada – Loan Balances Average Loans & Acceptances1 (C$B) Y/Y Growth 9% Personal Strong lending growth2 with balances up 9.5% Y/Y and 2.4% Q/Q 72.6 75.0 66.6 12.7% Mortgage balances up 12.7% Y/Y and 3.3% Q/Q Total personal lending2 market share up 16 bps Q/Q exclu
Slide 17: P&C Banking Canada – Deposit Balances
Personal & Commercial Banking Canada – Deposit Balances Average Deposits1 (C$B) Y/Y Growth 4% Personal Deposit balances up 2.6% Y/Y and 0.5% Q/Q 70.4 2.6% Deposit market share2 down 13 bps Q/Q 68.6 70.1 Retail operating deposit (excluding Term) market share up 3 bps Q/Q Commercial Good momentu
Slide 18: Personal & Commercial Banking U.S.
Personal & Commercial Banking U.S. Good net income growth and positive loan growth Q/Q Adjusted Net Income* and Q1 adjusted net income1 up 13% Y/Y and 25% Q/Q Net Interest Margin Lower PCL Y/Y reflects better credit conditions 447 439 442 430 Expenses down Y/Y and Q/Q primarily due to 421 syne
Slide 19: P&C 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 20: P&C 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 21: Private Client Group
Private Client Group Good financial performance on higher revenues and focused productivity Q1 2013 adjusted net income up 54% Adjusted Net Income* and AUA/AUM Ex-Insurance net income up 8% Insurance net income of $64MM, up $52MM, as revenues improved significantly due to the reduced impact of
Slide 22: BMO Capital Markets
BMO Capital Markets Very strong results Y/Y reflect good execution and a more favourable environment Q1 net income up 38% from a year ago Adjusted Net Income* and Return on Equity Net income from US operations increased to $84MM, more than doubled from the prior year 27.2 Efficiency ratio of 5
Slide 23: Capital & Risk Weighted Assets
Capital & Risk Weighted Assets Capital position is strong Q4 12 (2) Basel III Q1 13(1) (pro forma) Common Shareholders’ Equity ($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 ($B) 211 222 24.2 24.5 Transitiona
Slide 24: Loan Portfolio Overview
Loan Portfolio Overview Canadian and US portfolios are well diversified by industry Gross Loans & Acceptances Canada & % of Consumer portfolio represents the majority By Industry US Total Other1 Total of loans (C$ B) Consumer loans are 86% in Canada Residential Mortgages 78.6 7.2 85.8 33% and 14
Slide 25: 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 26: Canadian Residential Mortgages
Canadian Residential Mortgages 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 portfolio 63% (Q4’12: 62%) Onta
Slide 27: 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) ($MM) P&C Canada 461 444 443 3% 4% P&C U.S. 195 156 176 26% 11% Total P&C 656 600 619 9% 6% PCG 169 169 109 - 54% BMO Capital Markets 310 315 224 (2)% 38% Corporate Services (94)
Slide 28: Adjusting Items
Adjusting Items Adjusting1 items – Pre-tax ($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 29: 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
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