Bank Of Montreal · TSX:BMO
Bank Of Montreal — Q2 2016 Earnings Presentation
26 slides from Bank Of Montreal's earnings presentation, May 25, 2016
Slide 1: Investor Presentation Q2 16
Investor Presentation For the Quarter Ended April 30, 2016 May 25, 2016 Q2 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 April 30, 2016 May 25, 2016 Bill Downe Chief Executive Officer Q2 16 Financial Results Month xx, 2015 3
Slide 4: Q2 2016 Financial Highlights
Q2 2016 Financial Highlights Year-to-date adjusted EPS growth of 7% with good operating performance • Adjusted1 EPS of $1.73, up 1% – Earned through a $0.12 write-down of an investment, excluding which EPS was up 8% – Good operating performance driven by strong growth in our combined personal and co
Slide 5: Operating Group Performance
Operating Group Performance Results reflect the benefits of BMO’s diversified business mix by both customer and geography Operating Group • Personal and Commercial Banking earnings Adjusted Net Income – LTM1,2 up 14% Y/Y BMO CM – Canadian P&C net income up 8% with Canadian 21% third consecutive quar
Slide 6: Strategic Highlights
Strategic Highlights May 25, 2016 6
Slide 7: Financial Results
Financial Results For the Quarter Ended April 30, 2016 May 25, 2016 Tom Flynn Chief Financial Officer Q2 16 Financial Results Month xx, 2015 7
Slide 8: Q2 2016 - Financial Highlights
Q2 2016 - Financial Highlights Good operating results with adjusted net income of $1.2B and EPS of $1.73 • Adjusted EPS up 1% Y/Y, or 8% excluding a $0.12 ($79MM Adjusted ($MM)2 Q2 15 Q1 16 Q2 16 after-tax) write-down of an investment Net Revenue3 4,502 4,793 4,694 • Net revenue up 4% Y/Y, or 5% Y/Y
Slide 9: Capital & Risk Weighted Assets
Capital & Risk Weighted Assets CET1 Ratio steady at 10.0% • Common Equity Tier 1 Ratio of 10.0%, ~10 bps lower than Q1’16 Common Equity Tier 1 Ratio (%) – Lower CET1 capital from AOCI, partially offset by lower capital deductions and retained earnings growth, which was lower than normal given the re
Slide 10: Canadian Personal & Commercial Banking
Canadian Personal & Commercial Banking Good net income growth of 8% Y/Y with continued positive operating leverage • Adjusted net income of $525MM, up 8% Y/Y 1 Adjusted ($MM) Q2 15 Q1 16 Q2 16 • Revenue up 4% Y/Y reflecting higher balances and non-interest revenue partially offset by lower NIM Reven
Slide 11: U.S. Personal & Commercial Banking
U.S. Personal & Commercial Banking Strong growth with adjusted net income up 27% Y/Y or 21% in USD • Adjusted1 net income of $279MM, up 27% Y/Y. Figures that 1 follow are in U.S. dollars Adjusted (US$MM) Q2 15 Q1 16 Q2 16 • Adjusted net income up 21% Y/Y Revenue (teb) 708 828 879 • BMO TF represente
Slide 12: BMO Capital Markets
BMO Capital Markets Good results in an improving market environment; positive operating leverage of 3.0% • Adjusted net income down 2% Y/Y reflecting higher PCLs; 3 PPPT1 up 10% Y/Y Adjusted ($MM) Q2 15 Q1 16 Q2 16 • Revenue up 6% Y/Y or 4% in CCY2: Trading Products Revenue 660 589 730 – Trading Pro
Slide 13: BMO Wealth Management
BMO Wealth Management Solid underlying performance with impacts from write-down and lower Y/Y equity markets • Adjusted net income of $158MM impacted by a $79MM Adjusted1 ($MM) Q2 15 Q1 16 Q2 16 after-tax write-down of an investment • Figures that follow exclude the write-down: Net Revenue2 1,164 1,
Slide 14: Corporate Services
Corporate Services • Adjusted net loss of $101MM improved from a net loss of 1,2,3 $121MM in the prior year mainly due to below trend Adjusted ($MM) Q2 15 Q1 16 Q2 16 expenses and higher credit recoveries • The current quarter reported results included a $132MM Revenue (57) (2) (62) after-tax restru
Slide 15: Risk Review
Risk Review For the Quarter Ended April 30, 2016 May 25, 2016 Surjit Rajpal Chief Risk Officer Q2 16 Financial Results Month xx, 2015 15
Slide 16: Provision for Credit Losses (PCL)
Provision for Credit Losses (PCL) PCL By Operating Group Q2 15 Q1 161 Q2 161 • PCL ratio at 23 bps, up 2 bps from prior ($MM) quarter due to higher resource-related Consumer – Canadian P&C 114 113 105 provisions in BMO Capital Markets Commercial – Canadian P&C 29 27 22 Total Canadian P&C 143 140 127
Slide 17: Gross Impaired Loans (GIL) and Formations
Gross Impaired Loans (GIL) and Formations Formations Gross Impaired Loans • GIL and impaired formations By Industry ($MM) Canada Canada increased this quarter mainly U.S. Total U.S. Total & Other & Other1 due to Oil & Gas Consumer 155 104 259 358 555 913 Oil & Gas 41 245 286 87 323 410 Agriculture 1
Slide 18: Oil and Gas and Alberta Consumer Portfolios
Oil and Gas and Alberta Consumer Portfolios Oil and Gas Balances – By Sector ($B) Oil and Gas – Corporate/Commercial $0.8 • Oil and Gas loans of $7.3B; 2% of total bank loans 11% with close to half investment grade • $7.9B in undrawn exposure1, of which more than $1.3 half is investment grade 18% Co
Slide 19: Loan Portfolio Overview
Loan Portfolio Overview Gross Loans & Acceptances Canada & By Industry U.S. Total % of Total Other1 ($B) Residential Mortgages 98.3 8.3 106.6 30% • Loans are well diversified by Personal Lending 49.9 14.0 63.9 18% geography and industry Cards 7.4 0.5 7.9 2% Total Consumer 155.6 22.8 178.4 50% Financ
Slide 20: Canadian Residential Mortgages
Canadian Residential Mortgages • Total Canadian residential mortgage portfolio at $98.3B or 43% of Canadian gross loans and acceptances ─ 59% of the portfolio is insured ─ Loan-to-value (LTV)1 on the uninsured portfolio is 57%2 ─ 71% of the portfolio has an effective remaining amortization of 25 yea
Slide 21: Trading Revenue vs. VaR
Trading Revenue vs. VaR February 1, 2016 to April 29, 2016 (in MM's and on a Pre-Tax Basis) 35 15 Apr 07 Apr 14 Apr 21 Apr 28 Feb 02 Feb 09 Feb 16 Feb 23 Mar 01 Mar 08 Mar 15 Mar 22 Mar 30 (5) (25) Daily Revenue Total Trading VaR Risk Review May 25, 2016 21
Slide 22: Appendix
Appendix Financial Results Month xx, 2015 22
Slide 23: Canadian Personal and Commercial Banking - Balances
Canadian Personal and Commercial Banking - Balances Average Loans & Acceptances ($B) Average Deposits ($B) 201.7 203.6 193.4 93.3 93.4 89.1 139.5 140.1 131.2 43.3 43.9 44.0 83.5 87.6 89.7 8.4 8.7 8.4 52.6 55.8 57.8 51.9 47.7 50.4 Q2'15 Q1'16 Q2'16 Q2'15 Q1'16 Q2'16 Residential Mortgages Consumer Loa
Slide 24: U.S. Personal & Commercial Banking – Balances
U.S. Personal & Commercial Banking – Balances Average Loans & Acceptances (US$B) Average Deposits (US$B) 76.2* 72.1* 5.4 66.0* 5.4 10.1 Personal 5.1 10.3 Loans 64.9 65.6 5.0 61.6 11.0 5.1 6.0 4.9 6.4 2.2 2.3 26.0 25.5 6.8 24.2 2.9 Commercial 47.5 Loans 42.6 35.3 37.4 38.9 40.1 Q2'15 Q1'16 Q2'16 Q2'1
Slide 25: Adjusting Items
Adjusting Items Adjusting1 items – Pre-tax ($MM) Q2 15 Q1 16 Q2 16 Amortization of acquisition-related intangible assets2 (40) (43) (40) Acquisition integration costs2 (11) (22) (24) Cumulative accounting adjustment3 - (85) - Restructuring costs4 (149) - (188) Adjusting items included in reported pr
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