Bank Of Montreal · TSX:BMO
Bank Of Montreal — BMO Financial Group — Q1 2021 Earnings Presentation
31 slides from Bank Of Montreal's earnings presentation, Feb 23, 2021
Slide 1: Investor Presentation Q1 21
BMO Financial Group Investor Presentation For the Quarter Ended January 31, 2021 February 23, 2021 Q1 21
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: Darryl White, Chief Executive Officer
Darryl White Chief Executive Officer Q1 21
Slide 4: Our Strategy
Our Strategy About Us Helping customers since 8th largest 12+ million 1817 bank in North America by assets1 customers globally Our Purpose Our Strategic Priorities Medium Term Objectives2 Boldly Grow the Good World-class client loyalty and growth EPS growth 7% – 10% in business and life Winning cult
Slide 5: Financial Highlights
Financial Highlights Q1’21 Net Income1 $2.0B • Q1’21 adjusted1 net income up 26% Y/Y Reported $2.0B • Strong operating momentum across EPS1 $3.06 diversified businesses and lower loan loss Reported $3.03 provisions • Adjusted1 pre-provision, pre-tax earnings PPPT1,2 Growth 16% (PPPT)2 of $2.8B; reve
Slide 6: U.S. segment continuing to deliver strong results
U.S. segment continuing to deliver strong results Figures that follow are on a U.S. dollar basis • U.S. segment adjusted1 PPPT1 up 48% Y/Y; contributed over 40% of adjusted earnings1 • Adjusted1 efficiency of 53.5% and adjusted1 operating leverage of 18.7% • #112 in U.S. commercial lending; top-tier
Slide 7: Strong earnings across our diversified businesses
Strong earnings across our diversified businesses Canadian Personal & Commercial U.S. Personal & Commercial • PPPT1 growth of 4% Y/Y with good revenue • PPPT1,3 growth of 24% Y/Y with good momentum and expense management revenue growth and expense management • Top tier2 financial performance and gro
Slide 8: Supporting well-being of customers, employees and communities
Supporting well-being of customers, employees and communities Facilitating access to BMO support programs for Products and capabilities to government relief programs customers help make real financial • In Canada, over $4B in loans • Granted over 250,000 payment progress through CEBA, assisting over
Slide 9: Financial Results
Financial Results For the Quarter Ended January 31, 2021 Tayfun Tuzun Chief Financial Officer Q1 21
Slide 10: Q1 F2021 - Financial Highlights
Q1 F2021 - Financial Highlights Strong performance with good revenue growth, and lower credit provisions and expenses • Adjusted1 EPS $3.06, up 27% Y/Y (reported $3.03, up 28%) Reported Adjusted1 ($MM) Q1 21 Q4 20 Q1 20 Q1 21 Q4 20 Q1 20 • Adjusted1 net income up 26% (reported up 27%) 2 Net Revenue
Slide 11: Strong Q1'21 CET1 ratio of 12.4%, up from Q4'20
Strong Q1’21 CET1 ratio of 12.4%, up from Q4’20 Common Equity Tier 1 Ratio +10 bps 12.4% +6 bps -6 bps +7 bps +38 bps 11.9% Q4 2020 Internal capital Lower source Pension and other ECL provisioning Lower deductions Q1 2021 generation currency RWA employee future adjustment and other benefits Basis po
Slide 12: Canadian Personal & Commercial Banking
Canadian Personal & Commercial Banking Continued revenue momentum and disciplined expense management • Net income1 up 5% Y/Y Reported Adjusted1 ($MM) Q1 21 Q4 20 Q1 20 Q1 21 Q4 20 Q1 20 • PPPT1,2 $1,145MM, up 4% Y/Y and 8% Q/Q Revenue (teb) 2,099 2,031 2,082 2,099 2,031 2,082 • Revenue up 1% Y/Y and
Slide 13: U.S. Personal & Commercial Banking
U.S. Personal & Commercial Banking Strong results with good revenue growth, positive operating leverage Figures that follow are in U.S. dollars Reported Adjusted1 (US$MM) Q1 21 Q4 20 Q1 20 Q1 21 Q4 20 Q1 20 • Adjusted1 net income up 67% Y/Y (reported up 70%) Revenue (teb) 1,099 1,007 1,030 1,099 1,0
Slide 14: BMO Wealth Management
BMO Wealth Management Strong net income with Traditional Wealth up 35% Y/Y • Adjusted1 net income up 22% Y/Y (reported up 23%) Reported Adjusted1 ($MM) Q1 21 Q4 20 Q1 20 Q1 21 Q4 20 Q1 20 • Adjusted1 Traditional Wealth net income up 35% Y/Y 2 (reported up 37%); revenue up 7% Y/Y Net Revenue 1,376 1,
Slide 15: BMO Capital Markets
BMO Capital Markets Record net income and revenue performance, with adjusted1 efficiency ratio of 55% • Adjusted1 net income up 35% Y/Y (reported up 36%) Reported Adjusted1 ($MM) Q1 21 Q4 20 Q1 20 Q1 21 Q4 20 Q1 20 • Adjusted1 PPPT2 up 34% Y/Y (reported up 35%) Global Markets 1,031 854 823 1,031 854
Slide 16: Corporate Services
Corporate Services • Adjusted1 and reported net loss of $143MM compared Reported2 Adjusted1,2 with an adjusted1 and reported net loss of $105MM in the ($MM) Q1 21 Q4 20 Q1 20 Q1 21 Q4 20 Q1 20 prior year Revenue (8) 14 (7) (8) 14 (7) • Net loss $38MM worse Y/Y mainly due to higher expenses Group teb
Slide 17: Risk Review
Risk Review For the Quarter Ended January 31, 2021 Patrick Cronin Chief Risk Officer Q1 21
Slide 18: Provision for Credit Losses (PCL)
Provision for Credit Losses (PCL) PCL By Operating Group • Q1’21 PCL ratio on Impaired Loans at 19 bps, Q1 21 Q4 20 Q1 20 ($MM) down 10 bps Q/Q $ bps $ bps $ bps Consumer – Canadian P&C 91 22 94 23 103 26 PCL on Impaired Loans ($MM) Commercial – Canadian P&C 58 26 86 39 35 16 Total Canadian P&C 149
Slide 19: Allowance and Provision on Performing Loans
Allowance and Provision on Performing Loans Allowance on Performing • The APL decreased $109MM to $2,991MM, Loans (APL) and PCL on APL to jointly driven by a reduction in PCL on Q1 21 Performing Loans (PCL) Q4 20 Q1 21 Q1 21 Performing performing loans and foreign exchange impact Foreign By Operatin
Slide 20: Gross Impaired Loans (GIL) and Formations
Gross Impaired Loans (GIL) and Formations • GIL ratio 74 bps, down 4 bps Q/Q Formations Gross Impaired Loans By Industry ($MM, as at Q1 21) Canada & Canada & Formations ($MM) U.S. Total U.S. Total Other Other1 Consumer 229 68 297 490 354 844 Service Industries 32 76 108 172 325 497 1,760 1,396 Oil &
Slide 21: Loan Portfolio Overview
Loan Portfolio Overview Gross Loans & Acceptances Canada & • Loans are well diversified by geography and By Industry U.S. Total % of Total Other1 industry ($B, as at Q1 21) Residential Mortgages 119.8 8.4 128.2 27% • Business & Government loans up 0.6% Q/Q3 Consumer Instalment and Other (up 2.7% adj
Slide 22: Sectors Impacted by COVID-19 Pandemic
Sectors Impacted by COVID-19 Pandemic Gross Loans & % of Total By Industry of Heightened Focus Acceptances GL&A • Hotels: Well secured by real estate with overall ($B, as at Q1 21) reasonable loan-to-value averages. Majority of (GL&A) exposure is concentrated in Canada, focusing on well Hotels 4.2 0
Slide 23: Oil and Gas Portfolio Overview
Oil and Gas Portfolio Overview Industry by Sub-sector Industry by Risk Rating 5% 4% 9% 35% 24% $11.6B $11.6B 62% 61% Exploration and development Pipelines Investment Grade Non Investment Grade Impaired Services Manufacturing and refining • The Oil and Gas portfolio is geographically well-diversified
Slide 24: Trading-related Net Revenues and Value at Risk
Trading-related Net Revenues and Value at Risk November 2, 2020 to January 29, 2021 (pre-tax basis and in millions of Canadian dollars) 60 50 40 30 20 10 0 (10) (20) (30) (40) (50) (60) Daily Revenue Total Trading VaR Risk Review February 23, 2021 24
Slide 25: Appendix
Appendix
Slide 26: Canadian Personal & Commercial Banking - Balances
Canadian Personal & Commercial Banking - Balances Gross Loans & Acceptances ($B) Deposits ($B) 217.9 220.0 251.0 253.8 247.4 191.5 103.1 106.0 108.3 130.8 130.1 121.5 48.2 48.6 49.3 9.4 8.4 8.3 87.1 89.9 86.7 88.0 87.9 70.0 Q1'20 Q4'20 Q1'21 Q1'20 Q4'20 Q1'21 Avg. Avg. Avg. Avg. Avg. Avg. Residentia
Slide 27: U.S. Personal & Commercial Banking – Balances
U.S. Personal & Commercial Banking – Balances Figures on this slide are in U.S. dollars Gross Loans & Acceptances (US$B) Deposits (US$B) 106.0 108.1 92.71 92.51 93.41 7.2 8.1 8.0 87.2 10.8 9.4 8.9 49.4 47.9 47.3 74.7 75.0 76.5 56.6 60.2 39.9 Q1'20 Q4'20 Q1'21 Q1'20 Q4'20 Q1'21 Avg. Avg. Avg. Avg. Av
Slide 28: Advancing our digital experience in-line with customer preferences
Advancing our digital experience in-line with customer preferences Canadian Personal Digital Adoption Rate1 (%) Active Mobile Users1 (000s) Self-Serve Transaction 2 (%) +300bps +500bps 58.9% 59.5% +8% 56.5% 87.1% 91.4% 92.1% 1,864 1,990 2,022 Q1 F’20 Q4 F’20 Q1 F’21 Q1 F’20 Q4 F’20 Q1 F’21 Q1 F’20 Q
Slide 29: Canadian Residential-Secured Lending
Canadian Residential-Secured Lending Residential-Secured Lending by Region ($156.5B) • Total Canadian residential-secured lending portfolio HELOC $70.9 at $156.5B, representing 34% of total loans Uninsured Mortgages $30.9 ─ LTV1 on uninsured of 50% Insured Mortgages 24% ─ 90-day delinquency rate for
Slide 30: Adjusting Items
Adjusting Items Adjusting items1 - Pre-tax ($MM) Q1 21 Q4 20 Q1 20 2 Acquisition integration costs (3) (3) (3) 3 Amortization of acquisition-related intangible assets (25) (30) (29) Adjusting items included in reported pre-tax income (28) (33) (32) Adjusting items1 - After-tax ($MM) Q1 21 Q4 20 Q1 2
Slide 31: Investor Relations
BMO Financial Group Investor Relations Contact Information bmo.com/investorrelations E-mail: investor.relations@bmo.com BILL ANDERSON SUKHWINDER SINGH Director, Investor Relations Director, Investor Relations 416.867.7834 416.867.4734 bill2.anderson@bmo.com Sukhwinder.singh@bmo.com