Bank Of Montreal · TSX:BMO
Bank Of Montreal — Q1 2017 Earnings Presentation
26 slides from Bank Of Montreal's earnings presentation, Feb 28, 2017
Slide 1: Investor Presentation Q1 17
Investor Presentation For the Quarter Ended January 31, 2017 February 28, 2017 Q1 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 January 31, 2017 February 28, 2017 Bill Downe Chief Executive Officer Q1 17 Financial Results Month xx, 2015 3
Slide 4: Q1 2017 Financial Highlights
Q1 2017 Financial Highlights Strong results with good operating performance • Adjusted1 net income of $1.5B, up 30% ($1.5B reported, up 39%) • Adjusted1 EPS of $2.28 (reported $2.22) • Strong revenue growth and well-managed expenses contributing to continued positive operating leverage • Adjusted1 R
Slide 5: Operating Group Performance
Operating Group Performance Broad-based growth across businesses and geographies Operating Group • Personal and Commercial Banking adjusted1 net Adjusted Net Income – LTM1,2 income of $1B up 28% (reported $1B, up 29%) BMO CM – Well-diversified balance sheet growth in 23% Canadian Canadian P&C P&C 41
Slide 6: Strategic Highlights
Strategic Highlights February 28, 2017 6
Slide 7: Financial Results
Financial Results For the Quarter Ended January 31, 2017 February 28, 2017 Tom Flynn Chief Financial Officer Q1 17 Financial Results Month xx, 2015 7
Slide 8: Q1 2017 - Financial Highlights
Q1 2017 - Financial Highlights Strong results with good underlying performance and positive operating leverage • Reported net income of $1.5B up 39% Y/Y; EPS of $2.22 up 40% Y/Y • Adjusted1 net income of $1.5B and EPS of $2.28, both up 30% Y/Y • Results include net gain of $133MM from sale of Moneri
Slide 9: Strong Capital Position
Strong Capital Position Well capitalized with CET1 Ratio at 11.1% Common Equity Tier 1 Ratio +9 bps -2 bps 11.1% +10 bps +43 bps +31 bps 10.1% 2016 Q4 Internal capital Lower RWA Pension and Share issuances Other 2017 Q1 generation1 (excluding FX) other employee future benefit Basis points may not ad
Slide 10: Canadian Personal & Commercial Banking
Canadian Personal & Commercial Banking Good performance with continued positive operating leverage • Net income up 40% Y/Y; the gain on sale of Moneris US ($168MM)2 contributed 31% • Revenue up 15% Y/Y reflecting higher non-interest revenue, including gain of $187MM and higher balances, partially of
Slide 11: U.S. Personal & Commercial Banking
U.S. Personal & Commercial Banking Good net income growth with higher net interest margin • Adjusted1 net income of $272MM, up 3% Y/Y (reported $260MM, up 4%) Figures that follow are in U.S. dollars • Adjusted1 net income up 7% Y/Y (reported 8%) driven by higher deposit revenue and loan growth; incl
Slide 12: BMO Capital Markets
BMO Capital Markets Strong Y/Y net income growth and continued positive operating leverage • Adjusted1 and reported net income up 46% Y/Y, reflecting strong performance across our diversified businesses • Revenue up 21% Y/Y with strong Trading Products results and growth in Investment and Corporate
Slide 13: BMO Wealth Management
BMO Wealth Management Strong Y/Y results in both Traditional Wealth and Insurance • Adjusted1 net income of $281MM, up 60% Y/Y (reported $266MM, up 81% Y/Y) – Traditional Wealth adjusted1 results up 16% Y/Y (reported up 30%) from improved market conditions and business growth – Insurance earnings up
Slide 14: Corporate Services
Corporate Services • Adjusted1 net loss of $143MM vs. $48MM in prior year. Reported net loss of $157MM vs. $116MM in prior year • Results are lower mainly due to above-trend revenue excluding the TEB adjustment in the prior year, lower credit recoveries and higher expenses Reported2 Adjusted1,2 ($MM
Slide 15: Risk Review
Risk Review For the Quarter Ended January 31, 2017 February 28, 2017 Surjit Rajpal Chief Risk Officer Q1 17 Financial Results Month xx, 2015 15
Slide 16: Provision for Credit Losses (PCL)
Provision for Credit Losses (PCL) PCL By Operating Group • Q1’17 PCL ratio at 19 bps, flat Q/Q Q1 16 Q4 16 Q1 17 (C$MM) Consumer – Canadian P&C 113 102 98 Commercial – Canadian P&C 27 21 20 Total Canadian P&C 140 123 118 Consumer – U.S. P&C 48 6 26 Commercial – U.S. P&C 17 60 34 Total U.S. P&C 65 66
Slide 17: Gross Impaired Loans (GIL) and Formations
Gross Impaired Loans (GIL) and Formations Formations Gross Impaired Loans • Impaired formations down By Industry $46MM Q/Q (C$MM) Canada & Canada & U.S. Total U.S. Total Other Other1 • GIL ratio 60 bps, down 2 bps Q/Q Consumer 181 106 287 378 568 946 Oil & Gas 4 2 6 55 272 327 Agriculture 18 41 59 7
Slide 18: Canadian Residential Mortgages
Canadian Residential Mortgages • Total Canadian residential mortgage portfolio at $103.9B ─ 57% of the portfolio is insured ─ Loan-to-value (LTV)1 on the uninsured portfolio is 54% ─ 70% of the portfolio has an effective remaining amortization of 25 years or less ─ Loss rates for the trailing 4 quar
Slide 19: Loan Portfolio Overview
Loan Portfolio Overview Gross Loans & Acceptances Canada & • Loans are well diversified by By Industry U.S. Total % of Total Other1 (C$B) geography and industry Residential Mortgages 104.0 8.5 112.5 30% Consumer Instalment and Other Personal 50.8 10.7 61.5 17% Cards 7.4 0.5 7.9 2% Total Consumer 162
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) 210.7 212.7 201.7 97.4 98.4 93.3 150.1 139.5 146.0 44.5 44.7 93.2 95.0 43.9 87.6 8.7 8.7 8.8 55.8 60.1 60.8 55.1 51.9 52.8 Q1'16 Q4'16 Q1'17 Q1'16 Q4'16 Q1'17 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) 77.7* 75.9* 72.1* 5.3 5.3 5.4 9.8 67.1 9.8 Personal 64.9 67.7 10.3 5.0 Loans 4.9 5.1 5.5 3.8 2.2 2.0 26.1 24.8 6.4 26.0 2.3 Commercial 49.9 50.1 Loans 42.6 38.9 41.6 42.3 Q1'16 Q4'16 Q1'17 Q1'16
Slide 23: Oil and Gas and Alberta Consumer Portfolios
Oil and Gas and Alberta Consumer Portfolios Oil and Gas Balances – By Sector ($B) Oil and Gas – Corporate/Commercial $0.7 • Oil and Gas exposure of $7.0B in gross loans 10% and $8.8B in undrawn1, with ~50% of exposure investment grade • Portfolio represents 2% of total bank loans Consumer Exposure i
Slide 24: Trading-related Net Revenues versus Value at Risk
Trading-related Net Revenues versus Value at Risk Risk Review February 28, 2017 24
Slide 25: Adjusting Items
Adjusting Items Adjusting1 items – Pre-tax ($MM) Q1 17 Q4 16 Q1 16 Amortization of acquisition-related intangible assets2 (37) (37) (43) Acquisition integration costs2 (22) (31) (22) Cumulative accounting adjustment3 - - (85) Adjusting items included in reported pre-tax income (59) (68) (150) Adjust
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