Bank Of Montreal · TSX:BMO
Bank Of Montreal — Q1 2015 Earnings Presentation
26 slides from Bank Of Montreal's earnings presentation, Feb 24, 2015
Slide 1: Investor Presentation Q1 15
Investor Presentation For the Quarter Ended – January 31, 2015 February 24, 2015 Q1 15 Financial Results February 24, 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, 2015 February 24, 2015 Bill Downe Chief Executive Officer Q1 15 Financial Results February 24, 2015 3
Slide 4: Q1 2015 Financial Highlights
Q1 2015 Financial Highlights Solid underlying operating group performance • Adjusted1 net income $1.0 billion or $1.53 per share – Earnings down 4% Y/Y – Underlying business growth positive, up 5% excluding the impact of the decline in long-term rates and loan accounting • Solid underlying performan
Slide 5: Operating Group Performance
Operating Group Performance Results reflect benefit of diversification and our advantaged business mix Q1 F2015 Operating Group* Adjusted1 Net Income • Personal and Commercial Banking earnings up 6% Y/Y – Canadian P&C earnings up 4% Y/Y BMO CM – U.S. P&C pre-provision, pre-tax earnings 20% Canadian
Slide 6: Clear and Consistent Strategy
Clear and Consistent Strategy 1 Achieve industry-leading customer loyalty by delivering on our brand promise. 2 Enhance productivity to drive performance and shareholder value. 3 Leverage our consolidated North American platform to deliver quality earnings growth. 4 Expand strategically in select gl
Slide 7: Financial Results
Financial Results For the Quarter Ended – January 31, 2015 February 24, 2015 Tom Flynn Chief Financial Officer Q1 15 Financial Results Month xx, 2015 7
Slide 8: Q1 2015 - Financial Highlights
Q1 2015 - Financial Highlights Adjusted net income of $1.0B reflects benefits of diversification Q1 14 Q4 14 Q1 15 • Adjusted EPS of $1.53 Adjusted ($MM) 1 - Stock based compensation for employees eligible to retire Revenue 4,479 4,640 5,055 recognized in the first quarter each year lowered EPS by $
Slide 9: Capital & Risk Weighted Assets
Capital & Risk Weighted Assets CET1 Ratio strong at 10.1% Common Equity Tier 1 Ratio (%) 10.1 10.1 • Common Equity Tier 1 Ratio of 10.1% was unchanged from Q4’14 with 9.7 9.6 9.3 increase in CET1 capital offset by higher RWA - Impact of retained earnings growth (+20 bps), partially offset by share r
Slide 10: Canadian Personal & Commercial Banking
Canadian Personal & Commercial Banking Solid net income growth of 4% in a shifting economic environment Adjusted ($MM)1 Q1 14 Q4 14 Q1 15 Revenue (teb) 1,578 1,651 1,628 • Adjusted net income up 4% Y/Y largely due to higher revenues. Down 4% Q/Q from a strong Q4 PCL 139 129 132 • Revenue up 3% Y/Y r
Slide 11: U.S. Personal & Commercial Banking
U.S. Personal & Commercial Banking Good performance with adjusted pre-provision, pre-tax earnings up 6% Y/Y Adjusted (US$MM)1 Q1 14 Q4 14 Q1 15 • Adjusted net income of $205MM up 14% in Canadian dollar Revenue (teb) 714 724 720 terms. Figures that follow are in U.S dollars PCL 20 42 33 • Adjusted ne
Slide 12: BMO Capital Markets
BMO Capital Markets Results up from Q4 and reflect market conditions, valuation adjustments and slower investment banking Adjusted ($MM)1 Q1 14 Q4 14 Q1 15 • Adjusted net income down 20% Y/Y; up 15% Q/Q Trading Products 591 470 569 • Revenue down 5% Y/Y and up 14% Q/Q Revenue - Y/Y revenue down as g
Slide 13: Wealth Management
Wealth Management Traditional wealth earnings up 28% Y/Y; Insurance impacted by lower interest rates Adjusted1 ($MM) Q1 14 Q4 14 Q1 15 • Traditional wealth earnings up 28% Y/Y driven by strong growth in client assets and the acquired F&C business. Q/Q up 16% Revenue 1,223 1,400 1,782 • Insurance ear
Slide 14: Corporate Services
Corporate Services Adjusted ($MM)1,2 Q1 14 Q4 14 Q1 15 • Adjusted net loss of $74MM compared to a net loss of Revenue 17 72 55 $41MM in the prior year and prior quarter Group teb offset2 (85) (99) (190) - Y/Y higher non teb revenue more than offset by lower Total Revenue (teb)2,3 (68) (27) (135) cre
Slide 15: Risk Review
Risk Review For the Quarter Ended – January 31, 2015 February 24, 2015 Surjit Rajpal Chief Risk Officer Q1 15 Financial Results Month xx, 2015 15
Slide 16: Provision for Credit Losses (PCL)
Provision for Credit Losses (PCL) PCL By Operating Group (C$MM) Q1 141 Q4 141 Q1 15 • PCL decreased Q/Q largely due Consumer – Canadian P&C 91 111 104 to lower provisions in Corporate Commercial – Canadian P&C 48 18 28 Services Total Canadian P&C 139 129 132 Consumer – U.S. P&C 20 35 30 Commercial –
Slide 17: Gross Impaired Loans (GIL) and Formations
Gross Impaired Loans (GIL) and Formations Formations Gross Impaired Loans By Industry • Formations decreased Q/Q both (C$MM) Canada U.S. Total Canada U.S. Total in Canada and U.S. due to lower & Other & Other1 formations in the Commercial Consumer 162 154 316 383 795 1,178 Portfolio Service Industri
Slide 18: Loan Portfolio Overview
Loan Portfolio Overview Gross Loans & Acceptances • Loans are well diversified by geography Canada % of By Industry U.S. Total (C$B) & Other1 Total and industry Residential Mortgages 93.1 9.0 102.1 32% • Exposure to Oil & Gas represents 2% of Personal Lending 48.6 16.7 65.3 20% the loan portfolio Ca
Slide 19: Canadian Residential Mortgages
Canadian Residential Mortgages • Total Canadian residential mortgage portfolio at $93.1B (Q4 $93.0B) represents 43% of Canadian gross loans and acceptances ─ 62% of the portfolio is insured ─ Loan-to-value (LTV)1 on the uninsured portfolio is 58%2 ─ 69% of the portfolio has an effective remaining am
Slide 20: Trading Revenue vs. VaR
Trading Revenue vs. VaR The largest daily P&L gains for the quarter are as follows: • Nov 5 Primarily reflects normal trading activity and underwriting $24 million • Nov 12 Primarily reflects normal trading activity and underwriting $23 million • Dec 17 Primarily reflects normal trading activity and
Slide 21: Appendix
APPENDIX Financial Results February 24, 2015 21
Slide 22: Canadian Personal & Commercial Banking – Balances
Canadian Personal & Commercial Banking – Balances Average Loans & Acceptances Y/Y Growth (C$B) 190.4 191.7 4% Loans 185.0 • Total loan growth of 4% Y/Y and 1% Q/Q 85.1 88.1 89.0 - Mortgages up 5% Y/Y and 1% Q/Q - Consumer loans down 2% Y/Y and 1% Q/Q due in part to 44.1 43.7 43.5 reducing exposure o
Slide 23: U.S. Personal & Commercial Banking – Commercial Balances
U.S. Personal & Commercial Banking – Commercial Balances All amounts in US$B Average Commercial Loans 32.9 34.5 0.7 0.6 28.7 3.8 3.7 1.2 3.3 Loans • Strong core C&I loan growth, up 24% Y/Y and 6% Q/Q with increases across most segments 28.5 30.1 24.2 • Core Commercial Real Estate portfolio up 16% Y/
Slide 24: U.S. Personal & Commercial Banking – Personal Balances
U.S. Personal & Commercial Banking – Personal Balances All amounts in US$B Average Personal Loans Loans 31.7* 31.3* 30.9* • Core Business Banking up 4% Y/Y and flat Q/Q 4.8 5.0 5.0 Serviced Mortgages • Indirect Auto up 6% Y/Y and essentially flat Q/Q Mortgages** 12.0 11.3 11.2 • Mortgages down 7% Y/
Slide 25: Adjusting Items
Adjusting Items Adjusting1 items – Pre-tax ($MM) Q1 14 Q4 14 Q1 15 Acquisition integration costs - (11) (13) Amortization of acquisition-related intangible assets (31) (42) (40) Adjusting items included in reported pre-tax income (31) (53) (53) Adjusting1 items – After-tax ($MM) Q1 14 Q4 14 Q1 15 Ac
Slide 26: 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 LISA HOFSTATTER Head of Corporate Communications Managing Director, Investor Relations and Investor Relations 416.867.7019 416.867.6656 lisa.hofstatter@bmo.co