Bank Of Montreal · TSX:BMO
Bank Of Montreal — BMO Financial Group — Q4 2014 Earnings Presentation
28 slides from Bank Of Montreal's earnings presentation, Dec 9, 2014
Slide 1: Investor Presentation Q4 14
Investor Presentation December 9, 2014 Q4 14
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: BMO Financial Group
BMO Financial Group 8th largest bank in North America1 with an attractive and diversified business mix F2014 Results * Adjusted2 Reported Who we are Revenue ($B) 16.7 16.7 Established in 1817, Canada’s first bank Net Income ($B) 4.5 4.3 EPS ($) 6.59 6.41 In Canada: a full service, universal bank
Slide 4: 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 5: Operating Group Overview
Operating Group Overview Canadian Personal & Commercial Banking U.S. Personal & Commercial Banking • Provides a full range of financial products and • Over 600 branches; 1,300 ABMs services to more than seven million customers • U.S. Midwest footprint includes: Illinois, Wisconsin, • Over 900 branch
Slide 6: Reasons to Invest in BMO
Reasons to Invest in BMO Clear opportunities for growth across a diversified North American footprint Large North American commercial banking business with advantaged market share Good momentum in our well-established Canadian Personal & Commercial Banking business Award-winning wealth franc
Slide 7: Proven Strength in Commercial Banking
Proven Strength in Commercial Banking Commercial loan growth remains robust across our large North American platform Canadian P&C U.S. P&C Strong commercial lending growth1, balances up 10% Large-scale, relationship-based national commercial from F2013 banking business continues to deliver stron
Slide 8: Continued Momentum in our Canadian P&C Banking Business
Continued Momentum in our Canadian P&C Banking Business Record earnings of $2B, up 11% on good revenue growth and 2.1% operating leverage Adjusted efficiency ratio1 of 50.1% improved 90 bps from F2013 Commercial loans2 up 10% and Personal loans3 up 7% from F2013 Highly experienced team of co
Slide 9: Wealth Management
Wealth Management Strong wealth franchise with attractive growth prospects; contributes over 20% of total bank revenue Assets under management and administration of $794B BMO Nesbitt Burns (Full-service brokerage) Best Full Service Investment Advisory in Canada Wealth Management (Global Banking
Slide 10: BMO's Strategic Footprint
BMO’s Strategic Footprint Combined population and GDP of BMO’s U.S. Midwest States is greater than Canada BMO’s strategic footprint is anchored by our business in the heartland of the continental economy. Our three operating groups serve individuals, businesses, governments and corporate customers r
Slide 11: Balanced and Disciplined Approach to Capital Management
Balanced and Disciplined Approach to Capital Management Common Equity Tier 1 Ratio of 10.1% increased by ~50 bps from Common Equity Tier 1 Ratio (%) Q3’14 due to CET1 capital increase of ~35 bps and RWA reduction of ~ 15 bps: Higher CET1 capital mainly driven by retained earnings growth 9.9 9.7
Slide 12: Advantaged Business Mix
Advantaged Business Mix Diversified by both customer segment and geography F2014 Operating Group F2014 Adjusted Net Income1 Revenue* by Geography U.S. Wealth 21% Management 22% Canadian P&C 38% Other 5% BMO CM 22% Canada U.S. P&C 74% 18% * Excludes Corporate Services Adjusted measures are non-GAAP m
Slide 13: F2014 - Financial Highlights
F2014 - Financial Highlights Record Adjusted Net Income of $4.5B with EPS growth of 6% Adjusted EPS up 6%; net income up 5% Adjusted ($B) 1,2 F2013 F2014 Good operating group performance Revenue 15.4 16.7 Revenue increased 9% mainly due to growth in Canadian P&C, Wealth Management and BMO Capi
Slide 14: Canadian Personal & Commercial Banking
Canadian Personal & Commercial Banking Record annual earnings with strong organic volume growth; good momentum heading into 2015 F2014 Financial Highlights Revenue and Adjusted Net Income1 ($MM) Adjusted net income1 up 11% to over $2.0B, and operating 5,984 6,106 6,495 leverage of 2.1% Adjusted
Slide 15: U.S. Personal & Commercial Banking
U.S. Personal & Commercial Banking Improved trends in revenue and earnings in second half of F2014 (Amounts in US$MM) Adjusted Net Income1 and Revenue ($MM) 2,986 F2014 Financial Highlights 2,841 2,796 Adjusted net income1 up 3% driven by continued strong performance from commercial Loans up $3.
Slide 16: Wealth Management
Wealth Management Strong underlying growth across the business with earnings1 up 15% Adjusted Net Income2 and Revenue ($MM) F2014 Financial Highlights 3,833 Adjusted net income of $848MM compared to $857MM a year 3,448 ago; prior year included a $121MM after-tax security gain 2,900 857 848 Reven
Slide 17: BMO Capital Markets
BMO Capital Markets Results reflect the benefit of a diversified business mix F2014 Financial Highlights Adjusted Net Income1 and Revenue ($MM) 3,724 Adjusted net income1 of $1.1B up 3% with strong ROE of 3,249 3,392 19.2% and continued progress on U.S. strategy 1,080 Revenue up 10% reflecting d
Slide 18: Appendix
APPENDIX Investor Presentation | F2014 18
Slide 19: Canadian Personal & Commercial Banking – Balances
Canadian Personal & Commercial Banking – Balances Average Loans & Acceptances Y/Y Growth (C$B) 189.6 191.0 5% 182.5 86.5 88.1 Loans 83.3 Total loan growth of 5% Y/Y and 1% Q/Q 43.9 44.1 43.8 Personal lending¹ balances up 4% Y/Y and 1% Q/Q, 9.0 mortgages up 6% Y/Y and 2% Q/Q 8.9 9.0 46.4 50.0 50.
Slide 20: U.S. Personal & Commercial Banking – Commercial Balances
U.S. Personal & Commercial Banking – Commercial Balances All amounts in US$B Average Commercial Loans Loans 31.6 32.9 28.2 0.8 0.7 Strong core C&I loan growth, up 21% Y/Y and 5% Q/Q with 3.7 1.4 3.7 increases across all segments 3.1 Core Commercial Real Estate portfolio continues to grow, up 18%
Slide 21: U.S. Personal & Commercial Banking – Personal Balances
U.S. Personal & Commercial Banking – Personal Balances All amounts in US$B Average Personal Loans Loans 31.2* 31.1* 30.8* 4.7 Core Business Banking up 4% Y/Y and flat Q/Q 4.9 5.0 Serviced Mortgages Indirect Auto up 8% Y/Y and down 2% Q/Q Mortgages** 12.1 11.5 11.3 Serviced mortgage portfolio u
Slide 22: Loan Portfolio Overview
Loan Portfolio Overview Gross Loans & Acceptances By Industry Canada & US Total % of Total Loans are well diversified by Other1 geography and industry (C$B) Residential Mortgages 93.0 8.0 101.0 33% Personal Lending 49.0 15.1 64.1 21% Credit Cards 7.5 0.5 8.0 3% Total Consumer 149.5 23.6 173.1 57%
Slide 23: Provision for Credit Losses (PCL)
Provision for Credit Losses (PCL) PCL By Operating Group Q4 13 Q3 14 Q4 14 (C$MM) Consumer – Canadian P&C 114 110 113 Operating groups had stable or Commercial – Canadian P&C 52 24 20 improving results Total Canadian P&C 166 134 133 Consumer – US P&C 55 30 32 PCL increased Q/Q due to lower Comme
Slide 24: Canadian Residential Mortgages
Canadian Residential Mortgages Total Canadian residential mortgage portfolio at $93.0B represents 43% of Canadian gross loans and acceptances 63% of the portfolio is insured Loan-to-value (LTV)1 on the uninsured portfolio is 58%2 68% of the portfolio has an effective remaining amortization o
Slide 25: Corporate Governance
Corporate Governance Comprehensive code of business conduct and ethics, FirstPrinciples, guides conduct and ethical decision-making by our directors, officers and employees Governance practices reflect emerging best practices and BMO meets or exceeds legal, regulatory, TSX and NYSE requirements
Slide 26: Economic Outlook and Indicators
Economic Outlook and Indicators Canada United States Eurozone Economic Indicators (%)1 2013 2014E 2015E 2013 2014E 2015E 2013 2014E 2015E GDP Growth 2.0 2.4 2.4 2.2 2.3 3.0 -0.4 0.8 1.0 Inflation 0.9 2.0 1.7 1.5 1.6 1.4 1.4 0.5 0.7 Interest Rate (3mth Tbills) 0.97 0.91 0.96 0.06 0.03 0.25 0.15 0.18
Slide 27: Adjusting Items
Adjusting Items Adjusting1 items – Pre-tax ($MM) Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 F2013 F2014 Credit-related items on the purchased performing loan portfolio 49 - - - - 406 - Acquisition integration costs (60) - - (9) (11) (251) (20) Amortization of acquisition-related intangible assets (31) (31) (28)
Slide 28: 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 of Corporate Communications and Investor Relations 416.867.6656 sharon.hawardlaird@bmo.com ANDREW CHIN Director, Investor Relations 416.867.7019 andrew.c