Bank Of Montreal · TSX:BMO
Bank Of Montreal — Q4 2013 Earnings Presentation
32 slides from Bank Of Montreal's earnings presentation, Dec 3, 2013
Slide 1: Investor Presentation Q4 13
Investor Presentation For the Quarter Ended – October 31, 2013 Q4 13 December 3 2013
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, 2013 Q4 13 December 3 2013 Bill Downe Chief Executive Officer
Slide 4: F2013 Financial Highlights
F2013 Financial Highlights Performance reflects a well-executed growth strategy and the benefits of a diversified business model Record year with $4.3 billion in adjusted1 earnings Record EPS of $6.30, up 5% Revenues up to $15.6 billion ROE 15% Strong capital position with Basel III CET1 r
Slide 5: Operating Group Performance
Operating Group Performance Clear opportunities for growth and good operating leverage across our U.S. businesses Adjusted1 Net Income (C$MM) 1,785 1,864 Good operating group performance 1,022 1,096 Record earnings in Canadian P&C with robust 861 volume growth and good momentum in revenue 641 63
Slide 6: Strategic Priorities
Strategic Priorities A clear vision: To be the bank that defines great customer experience Strategic priorities Leverage our Ensure our Achieve industry- Enhance Expand strength in risk 1 3 4 consolidated 2 5 leading customer productivity to strategically in North American management loyalty by driv
Slide 7: Financial Results
Financial Results For the Quarter Ended – October 31, 2013 Q4 13 December 3 2013 Tom Flynn Chief Financial Officer
Slide 8: F2013 - Financial Highlights
F2013 - Financial Highlights Record Net Income and Adjusted EPS, both up 5% Y/Y Adjusted1 F2012 F2013 Adjusted results for the year Net Income (C$MM) 4,092 4,276 EPS and Net Income up 5% EPS ($) 6.00 6.30 Revenue growth of 3% ROE (%) 15.5 15.0 PCL3 $359MM compared to $471MM a year ago Effe
Slide 9: Q4 2013 - Financial Highlights
Q4 2013 - Financial Highlights Good income reflecting benefits of diversified business model Adjusted1 Q4 12 Q3 13 Q4 13 Adjusted EPS down 1 cent Y/Y Net Income (C$MM) 1,125 1,136 1,102 Continued good momentum in Wealth Management and Canadian P&C. Higher securities gains in Q4’13 EPS ($) 1.65 1
Slide 10: Revenue
Revenue Good growth in Canadian P&C and high Wealth Management revenue Y/Y adjusted revenue up 4% Total Bank Adjusted1 Revenue (C$MM) NII up 1% with strong volume growth in Canadian 3,920 4,060 P&C, continued loan growth in U.S. P&C and lower 3,892 NIM NIR up 6% 1,956 1,968 Strong Wealth Man
Slide 11: Non-Interest Expense
Non-Interest Expense Select investment with disciplined expense management Total Bank Adjusted Non-Interest Expense (C$MM) 2,458 2,502 Y/Y adjusted expenses up 3% and just 1% adjusting for 2,436 stronger U.S. dollar 821 Higher employee-related costs, including pension and Salaries 748 825 higher
Slide 12: Capital & Risk Weighted Assets
Capital & Risk Weighted Assets Capital position is strong Basel III Q3 13 Q4 13 Common Equity Tier 1 Ratio (CET1) (%) 9.6 9.9 Common Shareholders’ Equity ($B) Tier 1 Capital Ratio (%) 11.2 11.4 Total Capital Ratio (%) 13.5 13.7 28.1 27.1 27.4 RWA ($B) 214 215 26.6 26.2 Assets to Capital Multiple1 16
Slide 13: Canadian Personal & Commercial Banking
Canadian Personal & Commercial Banking Revenue growth and expense discipline drives 6% income growth and 2.7% operating leverage Annual Highlights As Reported ($MM) Q4 12 Q3 13 Q4 13 Record net income of $1.9B, up 4% with good momentum Revenue (teb) 1,558 1,620 1,626 in second half of the year PCL
Slide 14: U.S. Personal & Commercial Banking
U.S. Personal & Commercial Banking Quarterly trend impacted by higher PCLs; continued momentum in Commercial Banking (Amounts in US$MM) As Reported Q4 12 Q3 13 Q4 13 Annual Highlights (US$MM) Adjusted net income of $633MM, relatively flat Y/Y Revenue (teb) 750 705 693 PCL 76 39 92 Q4 Highlights Ex
Slide 15: BMO Capital Markets
BMO Capital Markets Good year with Q4 reflecting market uncertainty As Reported ($MM) Q4 12 Q3 13 Q4 13 Annual Highlights Trading Products Revenue 589 569 486 Net income of $1,094MM, up 7%; ROE of 18.9% Investment & Corp Banking Revenue 312 300 319 Q4 Highlights Revenue (teb) 901 869 805 Adjuste
Slide 16: Wealth Management
Wealth Management Earnings up significantly Y/Y driven by continued strong performance and security gain As Reported ($MM) Q4 12 Q3 13 Q4 13 Annual Highlights Revenue (teb) 785 869 1,041 Adjusted net income of $861MM, up 58%; wealth up 55%; PCL 11 (1) 1 Insurance up 66% Expenses 562 585 600 Q4 Hig
Slide 17: Corporate Services
Corporate Services Adjusted results down Y/Y, flat Q/Q Annual Highlights Adjusted ($MM) Q4 12 Q3 13 Q4 13 Annual net income down driven primarily by lower revenue Revenue (teb)1 (66) (199) (134) Q4 Highlights PCL (recovery) (115) (154) (106) Q4’13 adjusted net loss of $36MM compared to net incom
Slide 18: Risk Review
Risk Review For the Quarter Ended – October 31, 2013 Q4 13 December 3 2013 Surjit Rajpal Chief Risk Officer
Slide 19: Loan Portfolio Overview
Loan Portfolio Overview Canadian and US portfolios well diversified by industry Gross Loans & Acceptances Canada & % of By Industry US Total Other1 Total (C$ B) 2% loan growth Q/Q, spread across Residential Mortgages 88.6 7.7 96.3 34% Canada/US and the Consumer/Commercial Personal Lending 49.3 14.
Slide 20: Provision for Credit Losses (PCL)
Provision for Credit Losses (PCL) PCL By Operating Group Specific PCL up Q/Q due to higher P&C F2012 F2013 Q3 13 Q4 13 provisions in both Canada and the US and (C$ MM) Consumer – Canadian P&C 506 442 101 114 reduced recoveries on the PCI portfolio Commercial – Canadian P&C 109 132 25 52 Canadian
Slide 21: Gross Impaired Loans (GIL) and Formations
Gross Impaired Loans (GIL) and Formations Formations Gross Impaired Loans Total formations up slightly Q/Q By Industry (C$ MM) Canada US Total Canada & US Total Increase in US P&C offset with the & Other2 Other2 decline in Canadian P&C and Consumer 136 84 220 348 405 753 Purchased Performing por
Slide 22: Canadian Residential Mortgages
Canadian Residential Mortgages Total Canadian residential mortgage portfolio at $88.6B represents 43% of Canadian loans and acceptances and 32% of total loans and acceptances – smallest of the big five peer banks 59% of the portfolio is insured Loan-to-value (LTV)1 on the uninsured portfolio i
Slide 23: Trading Revenue vs. VaR
Trading Revenue vs. VaR August 1, 2013 to October 31, 2013 (Presented on a Pre-Tax Basis) 50 30 10 01-Aug-13 08-Aug-13 14-Aug-13 20-Aug-13 26-Aug-13 30-Aug-13 06-Sep-13 12-Sep-13 18-Sep-13 24-Sep-13 30-Sep-13 04-Oct-13 10-Oct-13 17-Oct-13 23-Oct-13 29-Oct-13 (10) Daily Revenues Total Trading VaR Tot
Slide 24: Appendix
APPENDIX Financial Results | December 3 • 2013 24
Slide 25: Canadian Personal & Commercial Banking – Loan Balances
Canadian Personal & Commercial Banking – Loan Balances Average Loans & Acceptances (C$B) Y/Y Growth 11% Personal 177.3 182.5 Strong lending growth¹ with balances up 11% Y/Y and 4% Q/Q 165.1 Mortgage balances up 16% Y/Y and 5% Q/Q 84.1 Total personal lending¹ market share² up 22 bps Q/Q 79.8 72
Slide 26: Canadian Personal & Commercial Banking – Deposit Balances
Canadian Personal & Commercial Banking – Deposit Balances Average Deposits (C$B) Y/Y Growth Personal 9% Deposit balances up 6% Y/Y and 2% Q/Q 114.9 117.9 108.2 Strong growth in retail operating deposits of 7% Y/Y and 1% Q/Q Personal deposit market share down 4 bps Q/Q 72.5 74.4 70.2 Commercial
Slide 27: U.S. Personal & Commercial Banking – Commercial Balances
U.S. Personal & Commercial Banking – Commercial Balances All amounts in U.S. $B Strong core C&I loan growth up 19% Core C&I ($B) - Average Core Commercial Real Estate ($B) - Average Y/Y and 3% Q/Q Growth in core C&I reflects increases across a number of businesses including Corporate Finance, 23
Slide 28: U.S. Personal & Commercial Banking – Personal Balances
U.S. Personal & Commercial Banking – Personal Balances All amounts in U.S. $B Mortgages ($B) - Average Home Equity ($B) - Average Mortgages Serviced Mortgage WM Overall mortgage portfolio up slightly driven 11.5 11.3 11.4 11.5 11.6 by growth in serviced portfolio. Serviced 1.0 1.0 1.1 1.2 1.3 port
Slide 29: Operating Groups – Q4 2013 Quick Facts
Operating Groups – Q4 2013 Quick Facts ~80% of adjusted revenue and net income from retail businesses1 Canadian P&C U.S. P&C Revenue up 4% Y/Y and up modestly Q/Q with higher Adjusted net income3 down 28% Y/Y as benefit of lower volumes and lower NIM expenses more than offset by lower revenue an
Slide 30: Group Net Income
Group Net Income Net Income, Adjusted1 Inc/(Dec) ($MM) F2012 F2013 $ % Canadian P&C 1,785 1,864 79 4% U.S. P&C 644 646 2 - Total P&C 2,429 2,510 81 3% Wealth Management 545 861 316 58% BMO Capital Markets 1,022 1,096 74 7% Corporate Services 96 (191) (287) (+100%) Total Bank 4,092 4,276 184 5% Net I
Slide 31: Adjusting Items
Adjusting Items Adjusting1 items – Pre-tax ($MM) Q4 12 Q3 13 Q4 13 F2012 F2013 Credit-related items on the M&I purchased performing loan portfolio 57 110 49 407 406 M&I integration costs (153) (49) (60) (402) (251) Amortization of acquisition-related intangible assets (34) (32) (31) (134) (125) Decr
Slide 32: Investor Relations Contact Information
Investor Relations Contact Information www.bmo.com/investorrelations E-mail: investor.relations@bmo.com Fax: 416.867.3367 SHARON HAWARD-LAIRD Head, Investor Relations 416.867.6656 sharon.hawardlaird@bmo.com ANDREW CHIN Director, Investor Relations 416.867.7019 andrew.chin@bmo.com Financial Results |