Bank Of Montreal · TSX:BMO
Bank Of Montreal — BMO Financial Group — Q1 2019 Earnings Presentation
25 slides from Bank Of Montreal's earnings presentation, Feb 26, 2019
Slide 1: BMO Financial Group Investor Presentation Q1 19
BMO Financial Group Investor Presentation For the Quarter Ended January 31, 2019 February 26, 2019 Q1 19
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
Slide 4: Q1 2019 - Financial Highlights
Q1 2019 - Financial Highlights Adjusted1 Reported Net Income $1,538MM $1,510MM • Adjusted1 net income up 8% Y/Y with good performance in our North American P&C businesses EPS $2.32 $2.28 • Adjusted1 EPS up 10% Y/Y Operating • Expenses up 2% in constant currency 1.5% 1.4% • Improved efficiency ratio
Slide 5: U.S. Operations
U.S. Operations U.S. segment continuing to deliver strong results Figures that follow are on a U.S. dollar basis U.S. Segment Reported Adjusted1 • U.S. segment adjusted1 earnings up 47% Y/Y (US$MM) Q1 19 Q4 18 Q1 18 Q1 19 Q4 18 Q1 18 Revenue 1,542 1,456 1,390 1,542 1,456 1,390 ‒ Adjusted1 PPPT3 grow
Slide 6: Differentiating strengths driving competitive advantage
Well-established U.S. Presence Differentiating Digital Core Strengths in Commercial Investment strengths and Innovation and Wealth Management driving Integrated North American Platform competitive advantage Unique Creating Approach Sustainable to Cross-border Efficiency Banking Strategic Highlights
Slide 7: Financial Results Q1 19
Financial Results For the Quarter Ended January 31, 2019 Tom Flynn Chief Financial Officer Q1 19
Slide 8: Q1 2019 - Financial Highlights
Q1 2019 - Financial Highlights Adjusted1 EPS up 10%; 1.5% adjusted1 operating leverage • Adjusted1 EPS $2.32, up 10% Y/Y (reported up 59%) Reported Adjusted1 • Adjusted1 net income up 8% Y/Y ($MM) Q1 19 Q4 18 Q1 184 Q1 19 Q4 18 Q1 18 – Reported net income4 up 55% reflecting prior year Net Revenue 2
Slide 9: Strong Capital Position
Strong Capital Position Capital position strong with CET1 Ratio at 11.4% Common Equity Tier 1 Ratio +11 bps -17 bps +28 bps -14 bps -3 bps 11.4% 11.3% Q4 2018 Internal capital AOCI securities Higher source Regulatory changes Share Q1 2019 generation gains and other currency RWA and CVA phase-in repu
Slide 10: Canadian Personal & Commercial Banking
Canadian Personal & Commercial Banking Continued momentum reflecting accelerating balance growth • Adjusted1 and reported net income stable Y/Y Reported Adjusted1 ($MM) Q1 19 Q4 18 Q1 183 Q1 19 Q4 18 Q1 183 • Revenue up 3% Y/Y Revenue (teb) 1,954 1,943 1,903 1,954 1,943 1,903 – Average loans up 5% Y
Slide 11: U.S. Personal & Commercial Banking
U.S. Personal & Commercial Banking Continued strong performance, including 8% revenue growth Y/Y Figures that follow are in U.S. dollars Reported Adjusted1 (US$MM) Q1 19 Q4 18 Q1 18 Q1 19 Q4 18 Q1 18 • Adjusted1 net income up 33% Y/Y (reported 34%) Revenue (teb) 1,002 988 931 1,002 988 931 • Revenue
Slide 12: BMO Capital Markets
BMO Capital Markets Strong growth in I&CB offset by impact of market conditions in Trading Products • Adjusted1 and reported net income lower than prior Reported Adjusted1 year reflecting market conditions impacting Trading ($MM) Q1 19 Q4 18 Q1 18 Q1 19 Q4 18 Q1 18 Products Trading Products 632 630
Slide 13: BMO Wealth Management
BMO Wealth Management Underlying business growth impacted by volatile global equity markets • Adjusted1 and reported net income down 10% Y/Y Reported Adjusted1 – Traditional Wealth down 6% Y/Y; underlying growth ($MM) Q1 19 Q4 18 Q1 18 Q1 19 Q4 18 Q1 18 was more than offset by weaker equity markets
Slide 14: Corporate Services
Corporate Services • Reported and adjusted1 net loss of $75MM for the Reported2 Adjusted1,2 quarter compared with a reported net loss of ($MM) Q1 19 Q4 18 Q1 183 Q1 19 Q4 18 Q1 18 $520MM and an adjusted1 net loss of $92MM in the Revenue 20 25 (3) 20 25 (3) prior year Group teb offset2 (67) (67) (123
Slide 15: Risk Review Q1 19
Risk Review For the Quarter Ended January 31, 2019 Patrick Cronin Chief Risk Officer Q1 19
Slide 16: Provision for Credit Losses (PCL)
Provision for Credit Losses (PCL) • Q1’19 PCL ratio on Impaired Loans at 12 bps, PCL By Operating Group ($MM) Q1 19 Q4 18 Q1 18 down 6 bps Q/Q Consumer – Canadian P&C 104 99 91 • Allowance for Credit Losses on Performing Loans increased PCL by $10 million Commercial – Canadian P&C 10 19 6 • Excludin
Slide 17: Gross Impaired Loans (GIL) and Formations
Gross Impaired Loans (GIL) and Formations Formations Gross Impaired Loans • GIL ratio 48 bps, flat Q/Q By Industry ($MM, as at Q1 19) Canada & Canada & U.S. Total U.S. Total Other Other1 Consumer 203 56 259 441 454 895 Agriculture 8 60 68 56 203 259 Service Industries 8 9 17 65 159 224 Transportatio
Slide 18: Loan Portfolio Overview
Loan Portfolio Overview Gross Loans & Acceptances Canada & By Industry U.S. Total % of Total • Loans are well diversified by Other1 ($B, as at Q1 19) Residential Mortgages 108.5 11.5 120.0 29% geography and industry Consumer Instalment and Other 53.4 9.9 63.3 15% Personal Cards 7.6 0.6 8.2 2% Total
Slide 19: Appendix
CO ad APPENDIX
Slide 20: Canadian Personal and Commercial Banking - Balances
Canadian Personal and Commercial Banking - Balances Average Gross Loans & Acceptances ($B) Average Deposits ($B) 220.2 227.0 230.7 168.2 157.6 162.5 100.0 100.6 100.3 101.0 104.2 98.4 45.7 46.0 45.4 8.9 9.0 8.8 65.7 72.4 75.1 59.2 61.5 64.0 Q1'18 Q4'18 Q1'19 Q1'18 Q4'18 Q1'19 Residential Mortgages C
Slide 21: U.S. Personal & Commercial Banking – Balances
U.S. Personal & Commercial Banking – Balances Average Gross Loans & Acceptances1 (US$B) Average Deposits1 (US$B) 81.52 82.82 78.5 74.92 4.8 4.9 73.7 Personal 4.2 11.3 Loans 67.6 11.5 11.2 35.2 31.3 29.1 Commercial 64.6 66.0 Loans 58.6 42.4 43.3 38.5 Q1'18 Q4'18 Q1'19 Q1'18 Q4'18 Q1'19 Commercial Per
Slide 22: Canadian Residential-Secured Lending
Canadian Residential-Secured Lending Residential-Secured Lending by Region ($140.3B) • Total Canadian residential-secured lending portfolio at $140.3B, representing 33% of total loans HELOC $62.0 ─ LTV1 on uninsured of 50% Uninsured Mortgages Insured Mortgages 23% ─ 90 day delinquency rate for RESL
Slide 23: Trading-related Net Revenues and Value at Risk
Trading-related Net Revenues and Value at Risk November 1, 2018 to January 31, 2019 (pre-tax basis and in millions of Canadian dollars) 60 50 40 30 20 10 0 (10) (20) (30) Daily Revenue Total Trading VaR Risk Review February 26, 2019 23
Slide 24: Adjusting Items
Adjusting Items Adjusting items1 - Pre-tax ($MM) Q1 19 Q4 18 Q1 18 Amortization of acquisition-related intangible assets2 (31) (31) (28) Acquisition integration costs2 (6) (18) (4) Benefit from the remeasurement of an employee benefit liability3 - 277 - Adjusting items included in reported pre-tax i
Slide 25: Investor Relations
Investor Relations Contact Information bmo.com/investorrelations E-mail: investor.relations@bmo.com JILL HOMENUK CHRISTINE VIAU Head, Investor Relations Director, Investor Relations 416.867.4770 416.867.6956 jill.homenuk@bmo.com christine.viau@bmo.com