Bank Of Montreal · TSX:BMO
Bank Of Montreal — Q1 2014 Earnings Presentation
26 slides from Bank Of Montreal's earnings presentation, Feb 25, 2014
Slide 1: Investor Presentation Q1 14
Investor Presentation For the Quarter Ended – January 31, 2014 Q1 14 February 25 2014
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, 2014 Q1 14 February 25 2014 Bill Downe Chief Executive Officer
Slide 4: Q1 2014 Financial Highlights
Q1 2014 Financial Highlights Results reflect strong operating group performance and revenue growth $1.1 billion in both reported and adjusted1 earnings Adjusted EPS up 7% to $1.61 Revenues up 8% to $4.1 billion ROE 14.5% Basel III CET1 ratio of 9.3% Strong volume growth with loans up 11%
Slide 5: Operating Group Performance
Operating Group Performance Good momentum and attractive business mix Adjusted1 Net Income (C$MM) 486 450 Canadian P&C revenue up 7% Y/Y with strong 298 277 194 operating leverage and robust volume growth 164 168 183 Excellent volume growth from U.S. commercial Canadian U.S. P&C* Wealth BMO CM P
Slide 6: Strategic Priorities
Strategic Priorities A clear vision: To be the bank that defines great customer experience 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
Slide 7: Financial Results
Financial Results For the Quarter Ended – January 31, 2014 Q1 14 February 25 2014 Tom Flynn Chief Financial Officer
Slide 8: Q1 2014 - Financial Highlights
Q1 2014 - Financial Highlights Adjusted Net Income of $1.1B and Adjusted EPS growth of 7% Adjusted ($MM) 1,2 Q1 13 Q4 13 Q1 14 Revenue 3,812 4,010 4,122 Adjusted EPS up 7% Y/Y Good growth in Canadian P&C and Wealth Management Expense 2,444 2,485 2,653 Net Income 1,029 1,088 1,083 Revenue growt
Slide 9: Capital & Risk Weighted Assets
Capital & Risk Weighted Assets Capital position is strong Common Equity Tier 1 Ratio (%) CET1 Ratio of 9.3% declined 60bps from Q4’13 due to: 9.7 9.9 9.4 9.6 9.3 Higher business driven source currency RWA (-50bps) Newly implemented Credit Valuation Adjustment (CVA) risk capital charge (-20bps)
Slide 10: Canadian Personal & Commercial Banking
Canadian Personal & Commercial Banking Continued momentum in revenue and net income growth with positive operating leverage As Reported ($MM) Q1 13 Q4 13 Q1 14 Revenue (teb) 1,503 1,566 1,602 Adjusted net income up 8% Y/Y. Up 6% Q/Q due to higher revenues and lower PCL PCL 128 166 141 Expenses 780
Slide 11: U.S. Personal & Commercial Banking
U.S. Personal & Commercial Banking Q/Q net income up with stable revenue and good credit performance (Amounts in US$MM) As Reported Q1 13 Q4 13 Q1 14 (US$MM) Revenue (teb) 746 688 693 Adjusted net income up $55MM Q/Q and down from a strong quarter a year ago PCL 33 92 18 Expenses 459 458 464 Rev
Slide 12: BMO Capital Markets
BMO Capital Markets Good revenue performance with strong contribution from U.S. business As Reported ($MM) Q1 13 Q4 13 Q1 14 Adjusted Net Income down 7% Y/Y; Q/Q up 27% Trading Products Revenue 536 482 590 Revenue up 9% Y/Y and 22% Q/Q I&CB Revenue 359 315 384 Higher equity underwriting fees,
Slide 13: Wealth Management
Wealth Management Continued strong performance in traditional wealth businesses with earnings up 17% Y/Y As Reported ($MM) Q1 13 Q4 13 Q1 14 Adjusted net income up 8% Y/Y; down 43% Q/Q. Q4 included a $121MM after-tax security gain Revenue (teb) 778 1,040 867 Continued strong performance in tradi
Slide 14: Corporate Services
Corporate Services Adjusted results up Y/Y, down Q/Q Adjusted net loss of $41MM compared to net loss of Adjusted ($MM)1,2 Q1 13 Q4 13 Q1 14 $79MM a year ago Revenue (teb)2 (107) (109) (69) Higher revenues primarily due to the purchased performing loan portfolio now included in adjusted results,
Slide 15: Risk Review
Risk Review For the quarter ended January 31, 2014 Q1 14 February 25 2014 Surjit Rajpal Chief Risk Officer
Slide 16: Loan Portfolio Overview
Loan Portfolio Overview Canadian and US portfolios well diversified by industry Gross Loans & Acceptances Canada & % of By Industry US Total Other1 Total (C$B) 4% loan growth Q/Q broadly spread across Residential Mortgages 89.3 8.0 97.3 33% portfolios Personal Lending 49.3 15.3 64.6 22% Credit Car
Slide 17: Provision for Credit Losses (PCL)
Provision for Credit Losses (PCL) PCL By Operating Group Q1 13 Q4 13 Q1 14 Specific PCL down Q/Q due to lower P&C (C$MM) provisions in both Canada and the US Consumer – Canadian P&C 109 114 91 Consumer: Commercial – Canadian P&C 19 52 50 Canadian P&C provisions declined Total Canadian P&C 128
Slide 18: Gross Impaired Loans (GIL) and Formations
Gross Impaired Loans (GIL) and Formations Formations Gross Impaired Loans Formations up Q/Q largely due to FX: By Industry (C$MM) Canada Canada & Increases in Consumer and Canadian US Total US Total Commercial portfolio, largely offset by & Other Other2 decline in US Commercial Consumer 173 151
Slide 19: Canadian Residential Mortgages
Canadian Residential Mortgages Total Canadian residential mortgage portfolio at $89.3B represents 43% of Canadian gross loans and acceptances – smallest of the big five banks 58% of the portfolio is insured Loan-to-value (LTV)1 on the uninsured portfolio is 59%2 67% of the portfolio has an e
Slide 20: Trading Revenue vs. VaR
Trading Revenue vs. VaR November 1, 2013 to January 31, 2014 (Presented on a Pre-Tax Basis) 50 30 10 01-Nov-13 07-Nov-13 13-Nov-13 19-Nov-13 25-Nov-13 29-Nov-13 05-Dec-13 11-Dec-13 17-Dec-13 23-Dec-13 31-Dec-13 07-Jan-14 13-Jan-14 17-Jan-14 23-Jan-14 29-Jan-14 (10) Daily Revenues Total Trading VaR T
Slide 21: Appendix
APPENDIX Financial Results | February 25 • 2014 21
Slide 22: Canadian Personal & Commercial Banking – Balances
Canadian Personal & Commercial Banking – Balances Average Loans & Acceptances Y/Y Growth (C$B) 182.5 185.6 Loans 168.6 10% Total loan growth 10% Y/Y and 2% Q/Q driven by both 83.3 85.1 personal and commercial lending 74.2 Strong personal lending growth¹ with balances up 10% Y/Y and 2% Q/Q 42.9 4
Slide 23: U.S. Personal & Commercial Banking – Commercial Balances
U.S. Personal & Commercial Banking – Commercial Balances All amounts in U.S. $B Average Commercial Loans Loans 28.2 28.6 26.6 1.4 1.1 Strong core C&I loan growth up 14% Y/Y and 2% Q/Q 2.4 3.1 3.2 2.9 Growth in core C&I reflects increases across all segments with the largest in Financial Institut
Slide 24: U.S. Personal & Commercial Banking – Personal Balances
U.S. Personal & Commercial Banking – Personal Balances All amounts in U.S. $B Average Personal Loans Loans 31.3* 31.2* 31.2* 4.3 4.7 4.8 Strong serviced portfolio growth up 12% Y/Y and 2% Q/Q Serviced Mortgages Overall mortgage portfolio modestly down primarily due to Mortgages** a decline in Ho
Slide 25: Adjusting Items
Adjusting Items Adjusting1 items – Pre-tax ($MM) Q1 13 Q4 13 Q1 14 Credit-related items on the M&I purchased performing loan portfolio 128 49 - Acquisition integration costs (92) (60) - Amortization of acquisition-related intangible assets (31) (31) (31) Decrease/(increase) in the collective allowan
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 Head, Investor Relations 416.867.6656 sharon.hawardlaird@bmo.com ANDREW CHIN Director, Investor Relations 416.867.7019 andrew.chin@bmo.com Financial Results |