Bank Of Montreal · TSX:BMO
Bank Of Montreal — Q4 2016 Earnings Presentation
27 slides from Bank Of Montreal's earnings presentation, Dec 6, 2016
Slide 1: Investor Presentation Q4 16
Investor Presentation For the Quarter Ended October 31, 2016 December 6, 2016 Q4 16 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 October 31, 2016 December 6, 2016 Bill Downe Chief Executive Officer Q4 16 Financial Results Month xx, 2015 3
Slide 4: F2016 Financial Highlights
F2016 Financial Highlights Strong results with good business growth and positive operating leverage • Q4 reported net income of $1.3B, up 11%; adjusted1 net income of $1.4B, up 10%; • Annual reported net income of $4.6B, up 5%; adjusted1 net income of $5B, up 7% – Reported EPS of $6.92, up 5%; adjus
Slide 5: F2016 Operating Group Performance
F2016 Operating Group Performance Well-diversified businesses with attractive platforms for continued growth F2016 Adjusted1 Net Income ($MM) • Canadian P&C revenue and earnings up 5%; positive adjusted1 operating leverage of 1.4% 5% (reported 1.5%) and efficiency ratio of 49.6% 2,209 2,109 23% • U.
Slide 6: Strategic Highlights
Strategic Highlights December 6, 2016 6
Slide 7: Financial Results
Financial Results For the Quarter Ended October 31, 2016 December 6, 2016 Tom Flynn Chief Financial Officer Q4 16 Financial Results Month xx, 2015 7
Slide 8: F2016 - Financial Highlights
F2016 - Financial Highlights Strong results with good business growth and positive operating leverage • Reported net income of $4.6B and EPS of $6.92, both up 5% • Pre-provision, pre-tax earnings growth of 12% Y/Y (reported 10%) • Adjusted1 net income of $5.0B and EPS of $7.52, both up 7% • Adjusted
Slide 9: Q4 2016 - Financial Highlights
Q4 2016 - Financial Highlights Strong results with net income up 11% Y/Y and positive operating leverage • Reported net income of $1.3B up 11%; EPS of $2.02 up 10% • Positive operating leverage2 of 2.9% (reported2 2.8%) • Adjusted1 net income of $1.4B up 10%; EPS of $2.10 up 11% • PCL of $174MM up $
Slide 10: Capital & Risk Weighted Assets
Capital & Risk Weighted Assets Well-capitalized with CET1 Ratio at 10.1% • Common Equity Tier 1 Ratio of 10.1%, up from 10.0% in Common Equity Tier 1 Ratio (%) Q3’161 – Higher CET1 capital from retained earnings and increased AOCI – RWA increased $5B primarily due to higher FX movement (~$3B) – whic
Slide 11: Canadian Personal & Commercial Banking
Canadian Personal & Commercial Banking Q4 Net income growth of 5% Y/Y with continued positive operating leverage • Net income up 5% Y/Y • Expense growth of 4% Y/Y reflecting investment in the business, net of an ongoing focus on expense • Revenue up 5% Y/Y reflecting higher balances across managemen
Slide 12: U.S. Personal & Commercial Banking
U.S. Personal & Commercial Banking Strong growth with Q4 net income up over 30% Y/Y • Adjusted1 net income of Cdn$299MM, up 35% Y/Y (reported • Average loans and acceptances up 18% and deposits up Cdn$286MM, up 38%) 7% Y/Y Figures that follow are in U.S. dollars – Continued strong organic commercial
Slide 13: BMO Capital Markets
BMO Capital Markets Strong net income growth and positive operating leverage • Adjusted1 net income up 64% Y/Y (reported 65%) • Expense growth of 6% Y/Y reflecting higher costs in-line with performance • Revenue up 27% Y/Y or 26% in CCY2: • PCL down Y/Y largely due to higher net recoveries in the –
Slide 14: BMO Wealth Management
BMO Wealth Management Q4 earnings growth Y/Y in both traditional wealth and insurance • Adjusted1 net income of $302MM, up 11% Y/Y (reported • Net revenue2 up Y/Y as improved market conditions and $279MM, up 15% Y/Y) business growth more than offset lower revenue from – Traditional Wealth results up
Slide 15: Corporate Services
Corporate Services • Adjusted1 net loss of $194MM compared to net loss of • Expenses above trend in the current quarter and credit $33MM in the prior year. Reported net loss of $208MM, recoveries lower compared to net loss of $39MM in the prior year • Revenue (ex teb)2 of $(65)MM is lower relative t
Slide 16: Risk Review
Risk Review For the Quarter Ended October 31, 2016 December 6, 2016 Surjit Rajpal Chief Risk Officer Q4 16 Financial Results Month xx, 2015 16
Slide 17: Provision for Credit Losses (PCL)
Provision for Credit Losses (PCL) PCL By Operating Group Q4 15 Q3 161 Q4 161 • Q4’16 PCL ratio at 19 bps, down from the ($MM) prior quarter primarily due to lower Oil Consumer – Canadian P&C 95 106 102 and Gas provisions Commercial – Canadian P&C 17 46 21 • For F2016, PCL ratio at 23 bps, up from 19
Slide 18: Gross Impaired Loans (GIL) and Formations
Gross Impaired Loans (GIL) and Formations By Industry Formations Gross Impaired Loans • Impaired formations ($MM) Canada U.S. Total Canada U.S. Total decreased this quarter across & Other & Other1 a broad range of industries Consumer 160 109 269 356 585 941 Oil & Gas 2 67 69 107 346 453 • GIL ratio
Slide 19: Oil and Gas and Alberta Consumer Portfolios
Oil and Gas and Alberta Consumer Portfolios Oil and Gas Balances – By Sector ($B) Oil and Gas – Corporate/Commercial $0.7 • Oil and Gas exposure of $8.0B in gross loans 9% and $8.7B in undrawn exposure1, with approximately 50% of exposure investment grade • Portfolio represents 2% of total bank loan
Slide 20: Loan Portfolio Overview
Loan Portfolio Overview Gross Loans & Acceptances Canada & By Industry Other1 U.S. Total % of Total • Loans are well diversified by ($B) geography and industry Residential Mortgages 103.6 8.7 112.3 30% Consumer Instalment and Other 50.7 14.0 64.7 17% Personal Cards 7.5 0.6 8.1 2% Total Consumer 161.
Slide 21: Canadian Residential Mortgages
Canadian Residential Mortgages • Total Canadian residential mortgage portfolio at $103.6B ─ 56% of the portfolio is insured ─ LTV1 on the uninsured portfolio is 54%2 ─ 70% of the portfolio has an effective remaining amortization of 25 years or less ─ Loss rates for the trailing 4 quarter period were
Slide 22: Trading Revenue vs. VaR
Trading Revenue vs. VaR Risk Review December 6, 2016 22
Slide 23: Appendix
APPENDIX Financial Results Month xx, 2015 23
Slide 24: Canadian Personal and Commercial Banking - Balances
Canadian Personal and Commercial Banking - Balances Average Loans & Acceptances ($B) Average Deposits ($B) 207.2 210.7 198.3 95.0 97.4 92.2 135.4 142.9 146.0 44.1 44.5 43.6 85.3 91.5 93.2 8.7 8.7 8.6 53.9 59.4 60.1 50.1 51.4 52.8 Q4'15 Q3'16 Q4'16 Q4'15 Q3'16 Q4'16 Commercial Loans & Acceptances Cre
Slide 25: U.S. Personal & Commercial Banking – Balances
U.S. Personal & Commercial Banking – Balances Average Loans & Acceptances (US$B) Average Deposits (US$B) 76.8* 77.7* 5.3 5.3 66.7* 10.0 9.8 67.2 67.7 5.3 Personal 63.5 5.0 5.0 Loans 10.6 5.5 5.7 2.2 2.2 26.3 26.1 5.0 26.0 6.8 2.5 Commercial 48.6 49.9 Loans 36.5 37.5 40.9 41.6 Q4'15 Q3'16 Q4'16 Q4'15
Slide 26: Adjusting Items
Adjusting Items Adjusting1 items – Pre-tax ($MM) Q4 16 Q3 16 Q4 15 F2016 F2015 Amortization of acquisition-related intangible assets2 (37) (40) (43) (160) (163) Acquisition integration costs2 (31) (27) (20) (104) (53) Cumulative accounting adjustment3 - - - (85) - Restructuring costs4 - - - (188) (1
Slide 27: 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 Strategic Highlights August 23, 2016 27