Bank Of Montreal · TSX:BMO
Bank Of Montreal — Q2 2017 Earnings Presentation
26 slides from Bank Of Montreal's earnings presentation, May 24, 2017
Slide 1: Investor Presentation Q2 17
Investor Presentation For the Quarter Ended April 30, 2017 May 24, 2017 Q2 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 April 30, 2017 May 24, 2017 Bill Downe Chief Executive Officer Q2 17 Financial Results Month xx, 2015 3
Slide 4: Q2 2017 Financial Highlights
Q2 2017 Financial Highlights Good contribution from BMO Wealth Management and BMO Capital Markets • Adjusted1 net income of $1.3B, up 12% ($1.25B reported, up 28%) • Adjusted1 EPS of $1.92, up 11% (reported $1.84, up 27%) • Year-to-date adjusted1 EPS up 21% (reported up 34%) with good underlying pos
Slide 5: Operating Group Performance
Operating Group Performance Results demonstrate the continued benefits of our diversified business model Operating Group • Diversified balance sheet growth in Canadian Adjusted Net Income – LTM1,2 P&C with ongoing investment in the business BMO CM • Expenses well-managed in U.S. P&C; earnings Canadi
Slide 6: Strategic Highlights
Strategic Highlights May 24, 2017 6
Slide 7: Financial Results
Financial Results For the Quarter Ended April 30, 2017 May 24, 2017 Tom Flynn Chief Financial Officer Q2 17 Financial Results Month xx, 2015 7
Slide 8: Q2 2017 - Financial Highlights
Q2 2017 - Financial Highlights Net income growth reflects benefits from diversified business • Reported net income of $1.25B up 28% Y/Y; EPS of $1.84 up 27% Y/Y • Adjusted1 net income of $1.3B up 12% Y/Y; EPS of $1.92 up 11% Y/Y • Q2’16 reported results included a $132MM after-tax restructuring char
Slide 9: Strong Capital Position
Strong Capital Position Strong capital with CET1 Ratio at 11.3% Common Equity Tier 1 Ratio +2 bps -15 bps +11bps +24 bps 11.3% 11.1% 2017 Q1 Internal capital Share Issuance Other Higher RWA 2017 Q2 generation (excluding FX) Basis points may not add due to rounding • Q2’17 CET1 Ratio of 11.3%, up fro
Slide 10: Canadian Personal & Commercial Banking
Canadian Personal & Commercial Banking Good volume growth with loans up 5% and deposits up 8% • Net income up 1% Y/Y • Revenue up 3% Y/Y reflecting higher balances and higher non-interest revenue, partially offset by lower NIM • NIM down 2bps Y/Y and Q/Q • Average loans up 5% (personal2 4%, commerci
Slide 11: U.S. Personal & Commercial Banking
U.S. Personal & Commercial Banking Continued good expense management with positive operating leverage • Adjusted1 net income of $260MM, down 7% Y/Y (reported $248MM, down 7%) Figures that follow are in U.S. dollars • Adjusted1 and reported net income down 10% Y/Y driven primarily by higher PCL • Rev
Slide 12: BMO Capital Markets
BMO Capital Markets Good Y/Y net income growth and continued positive operating leverage • Adjusted1 and reported net income up 12% Y/Y reflecting strong investment banking performance • Revenue up 13% Y/Y – Investment and Corporate Banking benefited from debt underwriting and advisory activity and
Slide 13: BMO Wealth Management
BMO Wealth Management Strong results in both Traditional Wealth and Insurance with continued benefit from productivity initiatives • Adjusted1 net income of $272MM, up 72% Y/Y (reported $251MM, up 86% Y/Y) – Traditional Wealth adjusted1 results up 121% Y/Y (reported up 166%) with good underlying bus
Slide 14: Corporate Services
Corporate Services • Adjusted1 net loss of $90MM compared to adjusted1 net loss of $98MM in the prior year. Reported net loss of $103MM compared to a net loss of $241MM in the prior year due to a $132 million after-tax restructuring charge in Q2’16 • Adjusted1 net loss $8MM better than prior year pr
Slide 15: Risk Review
Risk Review For the Quarter Ended April 30, 2017 May 24, 2017 Surjit Rajpal Chief Risk Officer Q2 17 Financial Results Month xx, 2015 15
Slide 16: Provision for Credit Losses (PCL)
Provision for Credit Losses (PCL) PCL By Operating Group Q2 16 Q1 17 Q2 17 • Q2’17 PCL ratio at 28 bps, up 9 bps Q/Q ($MM) primarily due to higher losses in U.S. P&C Consumer – Canadian P&C 105 98 104 Commercial and Capital Markets Commercial – Canadian P&C 22 20 24 • Year-to-date PCL ratio at 23 bp
Slide 17: Gross Impaired Loans (GIL) and Formations
Gross Impaired Loans (GIL) and Formations Formations Gross Impaired Loans • GIL ratio 63 bps, up 3 bps Q/Q By Industry ($MM, as at Q2 17) Canada & Canada & U.S. Total U.S. Total Other Other1 Consumer 170 96 266 383 596 979 Agriculture 12 51 63 73 230 303 Oil & Gas 54 82 136 100 181 281 Service Indus
Slide 18: Canadian Residential Mortgages
Canadian Residential Mortgages • Total Canadian residential mortgage portfolio at $104.1B ─ 55% of the portfolio is insured ─ Loan-to-value (LTV)1 on the uninsured portfolio is 54% ─ 70% of the portfolio has an effective remaining amortization of 25 years or less ─ Loss rates for the trailing 4 quar
Slide 19: Loan Portfolio Overview
Loan Portfolio Overview Gross Loans & Acceptances Canada & By Industry U.S. Total % of Total ($B, as at Q2 17) Other1 • Loans are well diversified by Residential Mortgages 104.1 8.9 113.0 29% geography and industry Consumer Instalment and Other 51.1 10.8 61.9 16% Personal Cards 7.4 0.6 8.0 2% Total
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) 212.7 214.1 203.6 98.4 98.3 93.4 150.1 151.4 140.1 44.0 44.7 44.7 95.0 96.7 89.7 8.4 8.8 8.6 57.8 60.8 62.5 50.4 55.1 54.7 Q2'16 Q1'17 Q2'17 Q2'16 Q1'17 Q2'17 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) 76.2* 75.9* 75.2* 5.4 5.3 5.3 67.1 10.1 9.8 9.7 Personal 65.6 65.4 Loans 5.0 4.9 5.0 6.0 3.8 3.3 2.0 1.9 25.5 24.8 23.1 2.2 Commercial 47.5 50.1 50.0 Loans 40.1 42.3 42.3 Q2'16 Q1'17 Q2'17 Q2'16
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 Q2 17) • Oil and Gas loans of $7.0B and $9.4B in $0.6 undrawn exposure1, of which more than half 9% is investment grade • Portfolio represents 2% of total bank loans $1.6 Consum
Slide 24: Trading-related Net Revenues versus Value at Risk
Trading-related Net Revenues versus Value at Risk Risk Review May 24, 2017 24
Slide 25: Adjusting Items
Adjusting Items Adjusting1 items – Pre-tax ($MM) Q2 17 Q1 17 Q2 16 Amortization of acquisition-related intangible assets2 (43) (37) (40) Acquisition integration costs2 (21) (22) (24) Restructuring costs3 - - (188) Adjusting items included in reported pre-tax income (64) (59) (252) Adjusting1 items –
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