Bank Of Montreal · TSX:BMO
Bank Of Montreal — BMO Financial Group — Q1 2015 Earnings Presentation
26 slides from Bank Of Montreal's earnings presentation, Feb 26, 2015
Slide 1: Investor Presentation Q1 15
Investor Presentation For the Quarter Ended – January 31, 2015 February 26, 2015 Q1 15 Investor Presentation Q1 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: BMO Financial Group
BMO Financial Group 8th largest bank in North America1 with an attractive and diversified business mix Who we are Q1’15 Results * Adjusted 2,3 Reported Revenue ($B) 5.1 5.1 • Established in 1817, Canada’s first bank Net Income ($B) 1.0 1.0 • In Canada: a full service, universal bank across all EPS (
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: 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 spans strong regional economies. Our three operating groups serve individuals, businesses, governments and corporate 1,5381 customers right across Canada and in six U.S
Slide 6: Operating Group Overview
Operating Group Overview Canadian Personal • Provides a full range of financial products and services to more than seven million customers • Over 900 branches and 3,000 ABMs & Commercial • 2nd in Canadian business banking loan market share for business loans of $25 million and less Banking • Strong
Slide 7: Advantaged business mix
Advantaged business mix Diversified by both customer segment and geography Q1 2015 Operating Group Revenue1,2 Q1 2015 Reported Net Income by Geography 23% 19% 37% 8% 21% 73% 19% Canadian P&C Canada U.S. P&C U.S. Wealth Management Other BMO Capital Markets 1 Excludes Corporate Services 2 Commencing i
Slide 8: 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 – Highly profitable Canadian Personal & Commercial Banking business – Award-winning wealth franchise with strong gro
Slide 9: Q1 2015 - Financial Highlights
Q1 2015 - Financial Highlights Adjusted net income of $1.0B reflects benefits of diversification Q1 14 Q4 14 Q1 15 • Adjusted EPS of $1.53 Adjusted ($MM) 1 - Stock based compensation for employees eligible to retire Revenue 4,479 4,640 5,055 recognized in the first quarter each year lowered EPS by $
Slide 10: Balanced and disciplined approach to capital management
Balanced and disciplined approach to capital management Common Equity Tier 1 Ratio (%) 10.1 10.1 • Common Equity Tier 1 Ratio of 10.1% was unchanged from Q4’14 with 9.7 9.6 9.3 increase in CET1 capital offset by higher RWA - Impact of retained earnings growth (+20 bps), partially offset by share rep
Slide 11: Canadian Personal & Commercial Banking
Canadian Personal & Commercial Banking Solid net income growth of 4% in a shifting economic environment Adjusted ($MM)1 Q1 14 Q4 14 Q1 15 Revenue (teb) 1,578 1,651 1,628 • Adjusted net income up 4% Y/Y largely due to higher revenues. Down 4% Q/Q from a strong Q4 PCL 139 129 132 • Revenue up 3% Y/Y r
Slide 12: U.S. Personal & Commercial Banking
U.S. Personal & Commercial Banking Good performance with adjusted pre-provision, pre-tax earnings up 6% Y/Y Adjusted (US$MM)1 Q1 14 Q4 14 Q1 15 • Adjusted net income of $205MM up 14% in Canadian dollar Revenue (teb) 714 724 720 terms. Figures that follow are in U.S. dollars PCL 20 42 33 • Adjusted n
Slide 13: Wealth Management
Wealth Management Traditional wealth earnings up 28% Y/Y; Insurance impacted by lower interest rates Adjusted1 ($MM) Q1 14 Q4 14 Q1 15 • Traditional wealth earnings up 28% Y/Y driven by strong growth in client assets and the acquired F&C business. Q/Q up 16% Revenue 1,223 1,400 1,782 • Insurance ear
Slide 14: BMO Capital Markets
BMO Capital Markets Results up from Q4 and reflect market conditions, valuation adjustments and slower investment banking Adjusted ($MM)1 Q1 14 Q4 14 Q1 15 • Adjusted net income down 20% Y/Y; up 15% Q/Q Trading Products 591 470 569 • Revenue down 5% Y/Y and up 14% Q/Q Revenue - Y/Y revenue down as g
Slide 15: Loan Portfolio Overview
Loan Portfolio Overview Gross Loans & Acceptances • Loans are well diversified by geography Canada % of By Industry U.S. Total (C$B) & Other1 Total and industry Residential Mortgages 93.1 9.0 102.1 32% • Exposure to Oil & Gas represents 2% of Personal Lending 48.6 16.7 65.3 20% the loan portfolio Ca
Slide 16: Provision for Credit Losses (PCL)
Provision for Credit Losses (PCL) PCL By Operating Group (C$MM) Q1 141 Q4 141 Q1 15 • PCL decreased Q/Q largely due Consumer – Canadian P&C 91 111 104 to lower provisions in Corporate Commercial – Canadian P&C 48 18 28 Services Total Canadian P&C 139 129 132 Consumer – U.S. P&C 20 35 30 Commercial –
Slide 17: Canadian Residential Mortgages
Canadian Residential Mortgages • Total Canadian residential mortgage portfolio at $93.1B (Q4 $93.0B) represents 43% of Canadian gross loans and acceptances ─ 62% of the portfolio is insured ─ Loan-to-value (LTV)1 on the uninsured portfolio is 58%2 ─ 69% of the portfolio has an effective remaining am
Slide 18: APPENDIX
APPENDIX Investor Presentation Q1 2015 18
Slide 19: Canadian Personal & Commercial Banking – Balances
Canadian Personal & Commercial Banking – Balances Average Loans & Acceptances Y/Y Growth (C$B) 190.4 191.7 4% Loans 185.0 • Total loan growth of 4% Y/Y and 1% Q/Q 85.1 88.1 89.0 - Mortgages up 5% Y/Y and 1% Q/Q - Consumer loans down 2% Y/Y and 1% Q/Q due in part to 44.1 43.7 43.5 reducing exposure o
Slide 20: U.S. Personal & Commercial Banking – Commercial Balances
U.S. Personal & Commercial Banking – Commercial Balances All amounts in US$B Average Commercial Loans 32.9 34.5 0.7 0.6 28.7 3.8 3.7 1.2 3.3 Loans • Strong core C&I loan growth, up 24% Y/Y and 6% Q/Q with increases across most segments 28.5 30.1 24.2 • Core Commercial Real Estate portfolio up 16% Y/
Slide 21: U.S. Personal & Commercial Banking – Personal Balances
U.S. Personal & Commercial Banking – Personal Balances All amounts in US$B Average Personal Loans Loans 31.7* 31.3* 30.9* • Core Business Banking up 4% Y/Y and flat Q/Q 4.8 5.0 5.0 Serviced Mortgages • Indirect Auto up 6% Y/Y and essentially flat Q/Q Mortgages** 12.0 11.3 11.2 • Mortgages down 7% Y/
Slide 22: 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 23: Sustainability at BMO
Sustainability at BMO Operating our business responsibly and considering the social and environmental impacts of our activities • Attained and maintained Carbon Neutrality across the enterprise since 2010 • Achieved ISO 14001 certification for Environmental Management System in two buildings in the
Slide 24: Economic Outlook and Indicators
Economic Outlook and Indicators Canada United States Eurozone Economic Indicators (%)1 2014 2015E 2016E 2014 2015E 2016E 2014 2015E 2016E GDP Growth 2.4 2.0 2.2 2.4 3.1 2.6 0.9 1.0 1.2 Inflation 1.9 1.3 2.2 1.6 0.6 2.2 0.4 (0.2) 1.1 Interest Rate (3mth Tbills) 0.91 0.40 0.70 0.03 0.12 0.92 0.20 0.00
Slide 25: Adjusting Items
Adjusting Items Adjusting1 items – Pre-tax ($MM) Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Acquisition integration costs - - (9) (11) (13) Amortization of acquisition-related intangible assets (31) (28) (39) (42) (40) Adjusting items included in reported pre-tax income (31) (28) (48) (53) (53) Adjusting1 items
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 LISA HOFSTATTER Head of Corporate Communications Managing Director, Investor Relations and Investor Relations 416.867.7019 416.867.6656 lisa.hofstatter@bmo.co