Bank Of Montreal · TSX:BMO
Bank Of Montreal — BMO Financial Group — Q4 2020 Earnings Presentation
29 slides from Bank Of Montreal's earnings presentation, Dec 1, 2020
Slide 1: Investor Presentation Q4 20
BMO Financial Group Investor Presentation For the Quarter Ended October 31, 2020 December 1, 2020 Q4 20
Slide 2: Forward looking statements & non-GAAP measures
Forward looking statements & non-GAAP measures Caution Regarding Forward-Looking Statements As noted in the following Caution Regarding Forward-Looking Statements, all forward-looking statements and information, by their nature, are subject to inherent risks and uncertainties, both general and speci
Slide 3: Darryl White, Chief Executive Officer
Darryl White Chief Executive Officer Q4 20
Slide 4: Financial Highlights
Financial Highlights Q4’20 F2020 Net Income1 $1.6B $5.2B • Q4’20 adjusted1 net income up $3MM Y/Y Reported $1.6B $5.1B • F2020 adjusted1 EPS of $7.71; resilient EPS1 earnings, reflects diversified business, active $2.41 $7.71 management and appropriate loan loss Reported $2.37 $7.55 provisions PPPT1
Slide 5: Resilient earnings across our diversified businesses
Resilient earnings across our diversified businesses Canadian Personal & Commercial U.S. Personal & Commercial • Top tier1 financial performance; continued to • Good F2020 PPPT2,3 growth of 8% expand market share in key areas • Disciplined expense management and strong • F2020 revenue up 1% with imp
Slide 6: Proven strategy, strong, resilient earnings with capital strength
Proven strategy, strong, resilient earnings with capital strength Our Purpose: Boldly Grow the Good in business and life • Diversification across businesses and geographies • Sustained capital and balance sheet strength Strong Foundation • Long and consistent track record of superior credit risk man
Slide 7: Financial Results
Financial Results For the Quarter Ended October 31, 2020 Tom Flynn Chief Financial Officer Q4 20
Slide 8: F2020 - Financial Highlights
F2020 - Financial Highlights Good PPPT5 performance absorbed higher PCLs, with positive operating leverage • Adjusted1 EPS $7.71, down 18% Y/Y (reported down 13%) Reported Adjusted1 • Adjusted1 net income down 17% Y/Y (reported down 11%) ($MM) F2020 F2019 F2020 F2019 • Adjusted1 PPPT5 up 7% Y/Y (rep
Slide 9: Q4 F2020 - Financial Highlights
Q4 F2020 - Financial Highlights Good PPPT5 growth with positive operating leverage and income flat Y/Y • Adjusted1 EPS $2.41 (reported $2.37) Reported Adjusted1 • Adjusted1 net income $1,610MM (reported $1,584MM) ($MM) Q4 20 Q3 20 Q4 19 Q4 20 Q3 20 Q4 19 • Adjusted1 PPPT5 $2,471MM, up 7% Y/Y (report
Slide 10: Strong Q4'20 CET1 ratio of 11.9%, up from Q3'20
Strong Q4’20 CET1 ratio of 11.9%, up from Q3’20 Common Equity Tier 1 Ratio +2 bps 11.9% +8 bps +25 bps 11.6% Q3 2020 Internal capital Share Other Q4 2020 generation issuances Basis points may not add due to rounding. Q4’20 CET1 Ratio of 11.9%, up from Q3’20 • Internal capital generation from retai
Slide 11: Canadian Personal & Commercial Banking
Canadian Personal & Commercial Banking Performance up Q/Q with improving revenue momentum and disciplined expense management • Adjusted1 net income $648MM (reported $647MM), down 9% Reported Adjusted1 Y/Y due to lower revenue and higher provisions for credit losses, partially offset by lower expense
Slide 12: U.S. Personal & Commercial Banking
U.S. Personal & Commercial Banking PPPT3 growth with positive operating leverage Figures that follow are in U.S. dollars Reported Adjusted1 • Adjusted1 and reported net income down 17% Y/Y (US$MM) Q4 20 Q3 20 Q4 19 Q4 20 Q3 20 Q4 19 resulting from higher credit provisions Revenue (teb) 1,007 1,030 1
Slide 13: BMO Capital Markets
BMO Capital Markets Strong revenue performance Y/Y and positive operating leverage • Adjusted1 net income up 38% Y/Y (reported up 40%) Reported Adjusted1 • Adjusted1 PPPT2 up 47% Y/Y (reported up 49%) ($MM) Q4 20 Q3 20 Q4 19 Q4 20 Q3 20 Q4 19 • Revenue up 17% Y/Y Global Markets 854 981 686 854 981 6
Slide 14: BMO Wealth Management
BMO Wealth Management Good performance in both Traditional Wealth and Insurance with positive operating leverage • Adjusted1 net income $328MM up 9% Y/Y (reported Reported Adjusted1 $320MM, up 20%) ($MM) Q4 20 Q3 20 Q4 19 Q4 20 Q3 20 Q4 19 • Adjusted1 Traditional Wealth net income $261MM, up Net Rev
Slide 15: Corporate Services
Corporate Services • Adjusted1 and reported net loss of $86MM compared with Reported2 Adjusted1,2 an adjusted1 net loss of $89MM and a reported net loss of ($MM) Q4 20 Q3 20 Q4 19 Q4 20 Q3 20 Q4 19 $446MM in the prior year. Reported results in the prior year include $357MM after-tax restructuring ch
Slide 16: Risk Review
Risk Review For the Quarter Ended Oct 31, 2020 Patrick Cronin Chief Risk Officer Q4 20
Slide 17: Provision for Credit Losses (PCL)
Provision for Credit Losses (PCL) PCL By Operating Group • Q4’20 PCL ratio on Impaired Loans at 30 bps, Q4 20 Q3 20 Q4 19 ($MM) down 8 bps Q/Q $ bps $ bps $ bps • Allowance for Credit Losses on Performing Loans increased PCL by $93MM Consumer – Canadian P&C 94 23 130 33 110 28 • Annual F2020 PCL rat
Slide 18: Allowance and Provision on Performing Loans
Allowance and Provision on Performing Loans Allowance on Performing • The APL increased $89MM to $3,100MM, largely APL to Net driven by a $93MM provision for credit losses Loans (APL) and PCL on Q4 20 Q3 20 Q4 20 Q4 20 Loans & Performing Loans (PCL) Foreign on performing loans APL1 PCL APL1 Allowanc
Slide 19: Gross Impaired Loans (GIL) and Formations
Gross Impaired Loans (GIL) and Formations Formations Gross Impaired Loans • GIL ratio 79 bps, down 16 bps Q/Q By Industry ($MM, as at Q4 20) Canada & Canada & Formations ($MM) U.S. Total U.S. Total Other Other1 Consumer 105 40 145 414 335 749 Service Industries 30 41 71 137 382 519 1,760 1,396 Oil &
Slide 20: Loan Portfolio Overview
Loan Portfolio Overview Gross Loans & Acceptances • Loans are well diversified by Canada & By Industry Other1 U.S. Total % of Total geography and industry ($B, as at Q4 20) Residential Mortgages 118 9 127 27% • Business & Government loans Consumer Instalment and Other 58 12 70 15% down Q/Q largely d
Slide 21: Sectors Impacted by COVID-19 Pandemic
Sectors Impacted by COVID-19 Pandemic Gross Loans • Hotels: Well secured by real estate. Majority of & % of Total By Industry of Heightened Focus exposure is concentrated in Canada, focusing on Acceptances GL&A ($B, as at Q4 20) (GL&A) well-known banners with reasonable overall Hotels 4.2 0.9% loan-
Slide 22: Oil and Gas Industry Overview
Oil and Gas Industry Overview Industry by Sub-sector Industry by Risk Rating 3% 4% 8% 32% 26% $12.8B $12.8B 63% 64% Exploration and development Pipelines Services Manufacturing and refining Investment Grade Non Investment Grade Impaired • The Oil and Gas portfolio is geographically well-diversified
Slide 23: Trading-related Net Revenues and Value at Risk
Trading-related Net Revenues and Value at Risk August 4, 2020 to October 30, 2020 (pre-tax basis and in millions of Canadian dollars) 40 30 20 10 0 (10) (20) (30) (40) (50) (60) Daily Revenue Total Trading VaR Risk Review December 1, 2020 23
Slide 24: Appendix
Appendix
Slide 25: Canadian Personal & Commercial Banking - Balances
Canadian Personal & Commercial Banking - Balances Gross Loans & Acceptances ($B) Deposits ($B) 217.9 217.4 220.6 251.0 251.0 250.6 253.0 213.1 243.4 184.0 105.9 108.1 102.0 104.5 106.0 126.6 126.5 127.5 127.9 115.2 47.6 48.3 48.6 48.2 49.0 9.2 8.2 8.4 8.3 8.3 85.6 90.0 90.8 94.1 84.6 90.0 88.0 88.2
Slide 26: U.S. Personal & Commercial Banking – Balances
U.S. Personal & Commercial Banking – Balances Figures on this slide are in U.S. dollars Gross Loans & Acceptances (US$B) Deposits (US$B) 106.1 106.0 105.6 104.6 92.11 95.41 92.51 92.91 90.71 6.6 8.1 8.1 8.1 7.9 11.1 10.0 9.4 9.6 83.1 9.1 50.5 49.4 50.3 48.7 46.3 74.4 77.3 75.0 75.2 73.7 55.6 56.6 55
Slide 27: Canadian Residential-Secured Lending
Canadian Residential-Secured Lending Residential-Secured Lending by Region ($153.7B) • Total Canadian residential-secured lending HELOC $69.6 portfolio at $153.7B, representing 33% of Uninsured Mortgages $30.2 total loans Insured Mortgages 24% ─ LTV1 on uninsured of 51% $23.8 25% ─ 90-day delinquenc
Slide 28: Adjusting Items
Adjusting Items Adjusting items1 - Pre-tax ($MM) Q4 20 Q3 20 Q4 19 F2020 F2019 Acquisition integration costs2 (3) (5) (2) (14) (13) Amortization of acquisition-related intangible assets3 (30) (32) (38) (121) (128) Restructuring costs4 - - (484) - (484) Reinsurance adjustment5 - - (25) - (25) Adjusti
Slide 29: Investor Relations
BMO Financial Group Investor Relations Contact Information bmo.com/investorrelations E-mail: investor.relations@bmo.com BILL ANDERSON SUKHWINDER SINGH Director, Investor Relations Director, Investor Relations 416.867.7834 416.867.4734 bill2.anderson@bmo.com Sukhwinder.singh@bmo.com