Slide 1: Investor Presentation Q4 19
BMO Financial Group Investor Presentation For the Quarter Ended October 31, 2019 December 3, 2019 Q4 19
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: Darryl White, Chief Executive Officer
Darryl White Chief Executive Officer Q4 19
Slide 4: Financial Highlights
Financial Highlights Q4’19 F2019 Net Income1 $1.6B $6.2B • Q4’19 adjusted1 net income growth of 5%, with particularly good growth in Personal and Reported $1.2B $5.8B Commercial banking • Q4’19 and F2019 adjusted1 EPS growth of 5% EPS1 $2.43 $9.43 reflecting good revenue and income growth Reported $
Slide 5: Strong and Consistent Delivery Across our Businesses
Strong and Consistent Delivery Across our Businesses Canadian Personal & Commercial U.S. Personal & Commercial • Solid earnings growth with prudent risk • Increasing market share in core footprint and management new markets • Dominant position in commercial lending, • Continued strength in commercia
Slide 6: Progress on our Commitments
Progress on our Commitments • 410 bps improvement since F2015 Efficiency Improvement • Efficiency target of 58% in F2021 • Top Digital Innovation Award1 for BMO QuickPay and Impact Innovation Award2 for online business banking platform Digital Innovation • Business and technology integrated through
Slide 7: Financial Results
Financial Results For the Quarter Ended October 31, 2019 Tom Flynn Chief Financial Officer Q4 19
Slide 8: F2019 - Financial Highlights
F2019 - Financial Highlights Good full year performance with momentum heading into 2020 • Adjusted1 EPS $9.43, up 5% Y/Y (reported up 6%) Reported Adjusted1 • Adjusted1 net income up 4% Y/Y (reported up 6%) ($MM) F2019 F2018 F2019 F2018 • Net revenue2 up 6% Y/Y, 5% CCY6 Net Revenue2 22,774 21,553 22
Slide 9: Q4 F2019 - Financial Highlights
Q4 F2019 - Financial Highlights Good momentum; adjusted1 EPS up 5%, PPPT5 up 11% with total bank and all Groups’ operating leverage positive • Adjusted1 EPS $2.43, up 5% Y/Y (reported $1.78, down Reported Adjusted1 31%) ($MM) Q4 19 Q3 19 Q4 18 Q4 19 Q3 19 Q4 18 • Adjusted1 net income up 5% Y/Y (repo
Slide 10: Strong Capital Position
Strong Capital Position Capital position strong with CET1 Ratio at 11.4% Common Equity Tier 1 Ratio +16 bps -16 bps 11.4% -1 bp 11.4% Q3 2019 Internal capital Higher source Other Q4 2019 generation currency RWA Basis points may not add due to rounding. • CET1 Ratio of 11.4% at Q4 2019, consistent wi
Slide 11: Canadian Personal & Commercial Banking
Canadian Personal & Commercial Banking Strong performance and continued balance momentum • Adjusted1 and reported net income up 6% Y/Y Reported Adjusted1 • Strong adjusted1 and reported PPPT2 growth of 10% Y/Y ($MM) Q4 19 Q3 19 Q4 18 Q4 19 Q3 19 Q4 18 • Revenue up 7% Y/Y Revenue (teb) 2,083 2,048 1,
Slide 12: U.S. Personal & Commercial Banking
U.S. Personal & Commercial Banking Strong PPPT2 growth and operating leverage Figures that follow are in U.S. dollars Reported Adjusted1 • Adjusted1 and reported net income up 4% Y/Y (US$MM) Q4 19 Q3 19 Q4 18 Q4 19 Q3 19 Q4 18 • Adjusted1 and reported PPPT2 up 9% Y/Y; above income Revenue (teb) 1,02
Slide 13: BMO Capital Markets
BMO Capital Markets Good PPPT2 growth and positive operating leverage on continued strong U.S. performance • Adjusted1 net income down 9% Y/Y (reported down Reported Adjusted1 10%) reflecting higher PCL ($MM) Q4 19 Q3 19 Q4 18 Q4 19 Q3 19 Q4 18 • Adjusted1 and reported PPPT2 growth of 5% Y/Y Global
Slide 14: BMO Wealth Management
BMO Wealth Management Good underlying growth in Traditional Wealth • Adjusted1 net income up 31% Y/Y (reported up 22%) Reported Adjusted1 • Adjusted1 Traditional Wealth net income up 22% Y/Y ($MM) Q4 19 Q3 19 Q4 18 Q4 19 Q3 19 Q4 18 (reported up 24%) Net Revenue2 1,232 1,226 1,181 1,257 1,226 1,181
Slide 15: Corporate Services
Corporate Services • Adjusted1 net loss of $94MM for Q4’19 compared Reported2 Adjusted1,2 with net loss of $65MM in prior year. Reported net ($MM) Q4 19 Q3 19 Q4 18 Q4 19 Q3 19 Q4 18 loss of $451MM for Q4’19 compared with reported Revenue (20) 14 25 (20) 14 25 net income of $134MM in the prior year
Slide 16: Risk Review
Risk Review For the Quarter Ended October 31, 2019 Patrick Cronin Chief Risk Officer Q4 19
Slide 17: Provision for Credit Losses (PCL)
Provision for Credit Losses (PCL) PCL By Operating Group • Q4’19 PCL ratio on Impaired Loans at 21 bps, Q4 19 Q3 19 Q4 18 ($MM) down 1 bp Q/Q Consumer – Canadian P&C 110 133 99 • Allowance for Credit Losses on Performing Commercial – Canadian P&C 24 41 19 Loans increased PCL by $22 million Total Can
Slide 18: Gross Impaired Loans (GIL) and Formations
Gross Impaired Loans (GIL) and Formations Formations Gross Impaired Loans • GIL ratio 58 bps, up 3 bps Q/Q By Industry ($MM, as at Q4 19) Canada & Canada & U.S. Total U.S. Total Other Other1 Consumer 213 46 259 497 385 882 Formations ($MM) Oil & Gas 24 158 182 33 371 404 741 679 799 Service Industri
Slide 19: Loan Portfolio Overview
Loan Portfolio Overview Gross Loans & Acceptances Canada & By Industry Other1 U.S. Total % of Total • Loans are well diversified by ($B, as at Q4 19) geography and industry Residential Mortgages 112.5 11.2 123.7 27% Consumer Instalment and Other 55.9 11.8 67.7 15% Personal Cards 8.3 0.6 8.9 2% Total
Slide 20: Appendix
Appendix
Slide 21: Canadian Personal & Commercial Banking - Balances
Canadian Personal & Commercial Banking - Balances Average Gross Loans & Acceptances ($B) Average Deposits ($B) 239.3 243.6 227.0 184.0 177.1 162.5 101.1 102.3 100.0 111.5 115.2 101.0 46.8 47.6 45.7 9.4 9.5 8.9 82.0 84.2 61.5 65.6 68.8 72.4 Q4'18 Q3'19 Q4'19 Q4'18 Q3'19 Q4'19 Residential Mortgages Co
Slide 22: U.S. Personal & Commercial Banking – Balances
U.S. Personal & Commercial Banking – Balances Average Gross Loans & Acceptances1 (US$B) Average Deposits1 (US$B) 92.12 80.5 83.1 89.72 73.7 81.52 5.5 6.3 Personal Loans 4.8 11.3 11.0 34.7 36.8 11.5 31.3 Commercial 72.4 74.4 Loans 64.6 42.4 45.8 46.3 Q4'18 Q3'19 Q4'19 Q4'18 Q3'19 Q4'19 Commercial Per
Slide 23: Oil & Gas Portfolio Overview
Oil & Gas Portfolio Overview Q4’19 Outstandings by Sector ($13.5B total) • $13.5B in total outstandings, of $4.7 which just over half are in the U.S. Non Investment Grade $3.9 Investment Grade • Of the $8.6B in Exploration and Development (E&D) outstandings, approximately 31% 75% three-quarters is b
Slide 24: Canadian Residential-Secured Lending
Canadian Residential-Secured Lending Residential-Secured Lending by Region ($146.3B) • Total Canadian residential-secured lending $65.6 portfolio at $146.3B, representing 32% of total HELOC loans Uninsured Mortgages $28.4 24% − LTV1 on uninsured of 51% Insured Mortgages − 90 day delinquency rate for
Slide 25: Trading-related Net Revenues and Value at Risk
Trading-related Net Revenues and Value at Risk August 1, 2019 to October 31, 2019 (pre-tax basis and in millions of Canadian dollars) 30 25 20 15 10 5 0 (5) (10) (15) Daily Revenue Total Trading VaR Risk Review December 3, 2019 25
Slide 26: Adjusting Items
Adjusting Items Adjusting items1 - Pre-tax ($MM) Q4 19 Q3 19 Q4 18 F2019 F2018 2 Acquisition integration costs (2) (3) (18) (13) (34) Amortization of acquisition-related intangible assets3 (38) (29) (31) (128) (116) 4 Restructuring costs (484) - - (484) (260) Reinsurance adjustment5 (25) - - (25) -
Slide 27: Investor Relations
BMO Financial Group Investor Relations Contact Information bmo.com/investorrelations E-mail: investor.relations@bmo.com JILL HOMENUK TOM LITTLE Head, Investor Relations Director, Investor Relations 416.867.4770 416.867.7834 jill.homenuk@bmo.com tom.little@bmo.com