Bank Of Montreal · TSX:BMO
Bank Of Montreal — Q1 2016 Earnings Presentation
26 slides from Bank Of Montreal's earnings presentation, Feb 23, 2016
Slide 1: Investor Presentation Q1 16
Investor Presentation For the Quarter Ended January 31, 2016 February 23, 2016 Q1 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 January 31, 2016 February 23, 2016 Bill Downe Chief Executive Officer Q1 16 Financial Results Month xx, 2015 3
Slide 4: Q1 2016 Financial Highlights
Q1 2016 Financial Highlights Adjusted EPS growth of 14% with good operating performance • Adjusted1 EPS of $1.75, up 14% • $1.2B in adjusted1 net income • Adjusted1 net operating leverage of 2.8% • CET1 ratio strong at 10.1% after closing BMO Transportation Finance • Book value per share up 13% • Co
Slide 5: Operating Group Performance
Operating Group Performance Results reflect benefits of BMO’s business mix – well diversified by customer and geography Operating Group Adjusted Net Income – LTM1,2 • Personal and Commercial Banking earnings up 12% Y/Y BMO CM 21% Canadian – Canadian P&C net income up 5% with P&C 1.5% positive operat
Slide 6: Strategic Highlights
Strategic Highlights February 23, 2016 6
Slide 7: Financial Results
Financial Results For the Quarter Ended January 31, 2016 February 23, 2016 Tom Flynn Chief Financial Officer Q1 16 Financial Results Month xx, 2015 7
Slide 8: Q1 2016 - Financial Highlights
Q1 2016 - Financial Highlights Good operating results with adjusted net income of $1.2B, EPS up 14% Y/Y • Adjusted EPS of $1.75 up 14% Y/Y Adjusted ($MM)4 Q1 15 Q4 15 Q1 16 • Adjusted net income up 13% Y/Y Net Revenue5 4,308 4,719 4,793 • Net revenue up 11% Y/Y or 6% in constant currency1 PCL 163 12
Slide 9: Capital & Risk Weighted Assets
Capital & Risk Weighted Assets CET1 Ratio strong at 10.1% • Common Equity Tier 1 Ratio of 10.1%, ~60 bps lower than Q4’15 Common Equity Tier 1 Ratio (%) – BMO Transportation Finance acquisition impact of ~60 bps, in line with expectations – Higher CET1 capital mainly from AOCI and retained earnings
Slide 10: Canadian Personal & Commercial Banking
Canadian Personal & Commercial Banking Net income growth of 5% Y/Y and positive operating leverage of 1.5% • Adjusted net income of $530MM with PPPT1 growth of 8% Adjusted ($MM)2 Q1 15 Q4 15 Q1 16 • Revenue up 6% Y/Y with higher balances and non-interest Revenue (teb) 1,628 1,710 1,725 revenue PCL 1
Slide 11: U.S. Personal & Commercial Banking
U.S. Personal & Commercial Banking Strong growth with adjusted net income up 29% or 11% in USD Adjusted (US$MM)1 Q1 15 Q4 15 Q1 16 • Adjusted net income of $264MM, up 29% Y/Y. Figures that follow are in U.S. dollars Revenue (teb) 722 724 828 • Adjusted net income up 11% Y/Y PCL 33 33 47 • BMO Transp
Slide 12: BMO Capital Markets
BMO Capital Markets Good results given market environment • Adjusted net income up 18% Y/Y from below-trend results a Adjusted ($MM)2 Q1 15 Q4 15 Q1 16 year ago Trading Products 570 564 589 • Revenue up 11% Y/Y Revenue – Up 6% in constant currency1 as higher merger and I&CB Revenue 350 372 431 acqui
Slide 13: BMO Wealth Management
BMO Wealth Management Solid underlying results in a challenging market • Adjusted net income impacted by market conditions Adjusted1 ($MM) Q1 15 Q4 15 Q1 16 – Traditional Wealth net income flat Y/Y; down Q/Q as Net Revenue2 1,035 1,192 1,071 the prior quarter benefited from gain on sale PCL 2 1 2 –
Slide 14: Corporate Services
Corporate Services • Adjusted net loss of $52MM compared to net loss of Adjusted ($MM)1,2 Q1 15 Q4 15 Q1 16 $74MM in the prior year due to lower expenses and Revenue 54 45 (2) higher credit recoveries in the current year and higher taxes in the prior year partly offset by lower loan Group teb offset
Slide 15: Risk Review
Risk Review For the Quarter Ended January 31, 2016 February 23, 2016 Surjit Rajpal Chief Risk Officer Q1 16 Financial Results Month xx, 2015 15
Slide 16: Provision for Credit Losses (PCL)
Provision for Credit Losses (PCL) PCL By Operating Group Q1 15 Q4 15 Q1 161 • PCL ratio at 21 bps, up from prior quarter ($MM) which included US loan sale Consumer – Canadian P&C 104 95 113 Commercial – Canadian P&C 28 17 27 Total Canadian P&C 132 112 140 Consumer – U.S. P&C1 30 (6) 48 Commercial –
Slide 17: Gross Impaired Loans (GIL) and Formations
Gross Impaired Loans (GIL) and Formations Formations Gross Impaired Loans • GIL and impaired formations By Industry ($MM) Canada Canada increased this quarter mainly U.S. Total U.S. Total & Other & Other1 due to the strengthening U.S. Consumer 162 156 318 383 621 1,004 dollar and Oil & Gas Agricultu
Slide 18: Oil and Gas and Alberta Consumer Portfolios
Oil and Gas and Alberta Consumer Portfolios Oil and Gas Balances – By Sector ($B) Oil and Gas – Corporate/Commercial $0.9 • Oil and Gas loans of $7.4B; 2% of total bank loans 12% with >50% investment grade $1.4 Consumer Exposure in Alberta 19% • Alberta consumer represents 6% of total bank loans of
Slide 19: Loan Portfolio Overview
Loan Portfolio Overview Gross Loans & Acceptances Canada & By Industry U.S. Total % of Total Other1 ($B) Residential Mortgages 97.6 9.4 107.0 30% • Loans are well diversified by Personal Lending 49.4 16.5 65.9 18% geography and industry Cards 7.3 0.6 7.9 2% Total Consumer 154.3 26.5 180.8 50% Financ
Slide 20: Canadian Residential Mortgages
Canadian Residential Mortgages • Total Canadian residential mortgage portfolio at $97.6B or 43% of Canadian gross loans and acceptances – 59% of the portfolio is insured – Loan-to-value (LTV)1 on the uninsured portfolio is 57%2 – 71% of the portfolio has an effective remaining amortization of 25 yea
Slide 21: Trading Revenue vs. VaR
Trading Revenue vs. VaR November 2, 2015 to January 29, 2016 (in MM's and on a Pre-Tax Basis) 35 15 Nov 02 Nov 09 Nov 16 Nov 23 Nov 30 Dec 07 Dec 14 Dec 21 Dec 30 Jan 07 Jan 14 Jan 21 Jan 28 (5) (25) Daily Revenues Total Trading VaR Risk Review February 23, 2016 21
Slide 22: Appendix
Appendix Financial Results Month xx, 2015 22
Slide 23: Canadian Personal and Commercial Banking - Balances
Canadian Personal and Commercial Banking - Balances Average Loans & Acceptances ($B) Average Deposits ($B) 198.3 201.7 192.7 92.2 93.3 139.5 89.2 131.4 135.4 83.3 85.3 87.6 43.6 43.6 43.9 8.7 8.6 8.7 51.2 53.9 55.8 48.1 50.1 51.9 Q1'15 Q4'15 Q1'16 Q1'15 Q4'15 Q1'16 Commercial Loans & Acceptances Cre
Slide 24: U.S. Personal & Commercial Banking – Balances
U.S. Personal & Commercial Banking – Balances Average Loans & Acceptances (US$B) Average Deposits (US$B) 72.1* 65.6* 66.7* 5.4 5.3 Personal 5.0 10.3 Loans 11.2 10.6 5.1 5.0 63.5 64.9 4.9 6.4 61.7 6.9 6.8 2.3 3.0 2.5 26.0 24.6 26.0 Commercial Loans 42.6 34.6 36.5 37.1 37.5 38.9 Q1'15 Q4'15 Q1'16 Q1'1
Slide 25: Adjusting Items
Adjusting Items Adjusting1,2,3 items – Pre-tax ($MM) Q1 15 Q4 15 Q1 16 Amortization of acquisition-related intangible assets (40) (43) (43) Acquisition integration costs (13) (20) (22) Cumulative accounting adjustment - - (85) Adjusting items included in reported pre-tax income (53) (63) (150) Adjus
Slide 26: Investor Relations
Investor Relations Contact Information Fax: 416.867.3367 bmo.com/investorrelations E-mail: investor.relations@bmo.com LISA HOFSTATTER CHRISTINE VIAU Managing Director, Investor Relations Director, Investor Relations 416.867.7019 416.867.6956 lisa.hofstatter@bmo.com christine.viau@bmo.com Financial R