Slide 1: Investor Presentation Q4 21
BMO Financial Group Investor Presentation For the Quarter Ended October 31, 2021 December 3, 2021 Q4 21
Slide 2: Forward looking statements & non-GAAP measures
Forward looking statements & non-GAAP measures Caution Regarding Forward-Looking Statements As noted in the following Caution Regarding Forward-Looking Statements, all forward-looking statements and information, by their nature, are subject to inherent risks and uncertainties, both general and speci
Slide 3: Darryl White, Chief Executive Officer
Darryl White Chief Executive Officer Q4 21
Slide 4: Delivering on commitments
Delivering on commitments 25% dividend increase, up $0.27 to $1.33 per share Target set in 2018 F2021 Adjusted1 Operating Leverage1,2 >2%1,2 3.2%1,2 3-year average Reported 1.2% 3-year average Efficiency Ratio1,2 58%1,2 or better 56.5%1,2 Reported2 60.1% U.S. Growth1 1/3 of bank earnings1 38%1 R
Slide 5: Supporting a Sustainable and Inclusive Future
Supporting a Sustainable and Inclusive Future At BMO, we have a long-standing commitment to support a thriving economy, a sustainable future and an inclusive society, and we are acting with purpose in support of our customers, communities and employees BMO support programs for customers Our clients'
Slide 6: Strong performance across our diversified businesses
Strong performance across our diversified businesses Canadian Personal & Commercial U.S. Personal & Commercial Adjusted1 F2021 Adjusted1 F2021 PPPT Growth1,2 • Improving efficiency • Continuing to add 15% PPPT Growth1,2 17% while continuing to clients and deepen Reported 15% Reported 18% relationshi
Slide 7: 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 basis1 • U.S. segment adjusted1 PPPT up 31% (reported up 32%) in F21; contributed 38% of adjusted1 earnings (reported1 42%) in F21 ― Adjusted1 ROE 15.8% (reported1 15.5%) ― Adjusted1 efficiency ratio 55.8%1 (r
Slide 8: Advancing our digital experience in-line with customer preferences
Advancing our digital experience in-line with customer preferences Industry recognized digital leadership Accelerated adoption and engagement Driving speed, efficiency and scale Digital adoption, % • #1 of 7 largest Canadian FIs by Insider 1 3 • BMO insights, automated personalized Intelligence for
Slide 9: Our Strategy
Our Strategy About Us Helping customers since 8th largest 12+ million bank in North America 1817 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 10: Financial Results
Financial Results For the Quarter Ended October 31, 2021 Tayfun Tuzun Chief Financial Officer Q4 21
Slide 11: F2021 - Financial Highlights
F2021 - Financial Highlights Strong full year performance with improved efficiency and positive operating leverage • Adjusted1 EPS $12.96, up 68% Y/Y (reported $11.58, up 53%) Reported Adjusted1 • Adjusted1 net income up 66% Y/Y (reported up 52%) ($MM) F2021 F2020 F2021 F2020 Gross Revenue 27,186 25
Slide 12: Q4 F2021 - Financial Highlights
Q4 F2021 - Financial Highlights Continued strong performance with double digit PPPT1 growth and positive operating leverage • Adjusted1 net income and EPS up 38% Y/Y (reported up Reported Adjusted1 36%) ($MM) Q4 21 Q3 21 Q4 20 Q4 21 Q3 21 Q4 20 • Adjusted1 ROE 16.5%, improved 390 bps Y/Y (reported G
Slide 13: Balance Sheet
Balance Sheet Continued loan and deposit growth in the quarter • Average net loans and acceptances up 3% Y/Y, or 5%1 excluding the Average Net Loans and Acceptances ($B) impact of the weaker U.S. dollar 461.0 460.7 474.7 – Business & government balances up 2%1 primarily driven by growth in the P&C b
Slide 14: Net Interest Margin
Net Interest Margin1 Margin excluding trading relatively stable Q/Q • Excluding trading, net interest margin was relatively stable, down 1 basis point • Relatively stable margin in Canadian P&C, up 1 basis point • U.S. P&C margin down slightly due to changes in balance sheet mix, primarily loan grow
Slide 15: Interest Rate Sensitivity
Interest Rate Sensitivity • Year 1 benefit to a +100 bps rate shock driven 2/3 by • Term rates increased in Q4, moving reinvestment rates short rates closer to average rates of recent years • Higher Year 2 benefit to rising rates (+100 bps) of • If higher term rates are sustained, this will be suppo
Slide 16: Non-Interest Revenue
Non-Interest Revenue • NIR net of CCPB1 up 11% Y/Y Reported Non-Interest Revenue, net of CCPB – Excluding trading, NIR net of CCPB up 16% driven by ($MM) Q4 21 Q3 21 Q4 20 securities gains, underwriting & advisory fees, Securities Commissions and Fees 258 264 247 Deposit & Payment Service Charges 31
Slide 17: Non-Interest Expense
Non-Interest Expense • Adjusted1 efficiency ratio 57.4% (reported1,2 58.7%) Reported Adjusted1 ($MM) Q4 21 Q3 21 Q4 20 Q4 21 Q3 21 Q4 20 • Adjusted1 operating leverage of 2.4% (reported1,2 Salaries 1,077 986 1,040 1,061 993 1,038 1.0%), positive across all operating groups Performance-based Compensa
Slide 18: Strong Q4'21 CET1 ratio of 13.7%, up from Q3'21
Strong Q4’21 CET1 ratio of 13.7%, up from Q3’21 Common Equity Tier 1 Ratio +44 bps -18 bps -3 bps 13.7% 13.4% Q3 2021 Internal capital Higher source Other Q4 2021 generation currency RWA Basis points may not add due to rounding. • Q4’21 CET1 Ratio1 of 13.7%, up from Q3’21, well above our target rang
Slide 19: Canadian Personal & Commercial Banking
Canadian Personal & Commercial Banking Strong results with double digit PPPT1 growth Y/Y and positive operating leverage Reported Adjusted1 • Adjusted1 and reported net income up 42% Y/Y ($MM) Q4 21 Q3 21 Q4 20 Q4 21 Q3 21 Q4 20 • Adjusted1 PPPT up 16% Y/Y (reported1 17% Y/Y) Net interest income 1,7
Slide 20: U.S. Personal & Commercial Banking
U.S. Personal & Commercial Banking Strong results with double digit PPPT1 growth and continued positive operating leverage Figures that follow are in U.S. dollars1,3 Reported Adjusted1 1 • Adjusted net income up 63% Y/Y (reported up 66%) (US$MM)3 Q4 21 Q3 21 Q4 20 Q4 21 Q3 21 Q4 20 • Adjusted1 PPPT
Slide 21: BMO Wealth Management
BMO Wealth Management Continued strong Traditional Wealth performance and positive operating leverage • Adjusted1 net income up 14% Y/Y (reported up 15%) Reported Adjusted1 • Adjusted1 Traditional Wealth net income up 24% Y/Y ($MM) Q4 21 Q3 21 Q4 20 Q4 21 Q3 21 Q4 20 (reported up 26%) Gross Revenue
Slide 22: BMO Capital Markets
BMO Capital Markets Strong net income growth Y/Y reflecting good PPPT1 • Adjusted1 net income up 40% Y/Y (reported up 41%) Reported Adjusted1 ($MM) Q4 21 Q3 21 Q4 20 Q4 21 Q3 21 Q4 20 • Adjusted1 PPPT up 8% Y/Y (reported1 up 9%) Global Markets 774 881 854 774 881 854 • Revenue1 up 4% Y/Y I&CB 656 70
Slide 23: Corporate Services
Corporate Services • Adjusted1 net loss of $127MM and reported net Reported Adjusted1 loss of $179MM, compared with an adjusted1 and ($MM) Q4 21 Q3 21 Q4 20 Q4 21 Q3 21 Q4 20 reported net loss of $86MM in the prior year Revenue - 36 14 - 36 14 • Adjusted1 and reported net loss worse Y/Y due to Group
Slide 24: Risk Review
Risk Review For the Quarter Ended October 31, 2021 Patrick Cronin Chief Risk Officer Q4 21
Slide 25: F2021 Risk Highlights
F2021 Risk Highlights PCL By Operating Group F2021 F2020 ($MM) • Total Provision for Credit Losses (PCL) $20MM, compared $ bps $ bps with $2,953MM in prior year Consumer – Canadian P&C 344 20 448 28 • PCL on impaired loans $525MM or 11 bps1, down 66% Y/Y Commercial – Canadian P&C 149 16 339 38 • PCL
Slide 26: Provision for Credit Losses (PCL)
Provision for Credit Losses (PCL) PCL By Operating Group Q4 21 Q3 21 Q4 20 • Q4’21 PCL ratio on Impaired Loans is 7 bps, ($MM) up 1 bps Q/Q $ Bps $ bps $ bps Consumer – Canadian P&C 67 15 86 20 94 23 PCL on Impaired Loans ($MM) Commercial – Canadian P&C 22 9 15 6 86 39 Total Canadian P&C 89 13 101 1
Slide 27: Allowance and Provision on Performing Loans
Allowance and Provision on Performing Loans Allowance on Performing • The $210MM recovery of credit losses on Loans (APL) and PCL on APL to Performing Loans (PCL) Q3 21 Q4 21 Q4 21 Q4 21 Performing performing loans reflected an improving Foreign economic outlook and positive credit migration, By Ope
Slide 28: Gross Impaired Loans and Formations
Gross Impaired Loans and Formations • Gross Impaired Loans (GIL) ratio 46 bps, Formations Gross Impaired Loans down 5 bps Q/Q By Industry ($MM, as at Q4 21) Canada & Canada & U.S. Total U.S. Total Formations ($MM) Other Other1 Consumer 144 14 158 382 256 638 Service Industries 23 4 27 209 208 417 1,
Slide 29: Loan Portfolio Overview
Loan Portfolio Overview Gross Loans & Acceptances Canada & • Portfolio is well diversified by geography By Industry3 U.S. Total % of Total Other1 and industry ($B, as at Q4 21) Residential Mortgages 128.0 7.7 135.7 29% Consumer Instalment and Other 64.0 13.2 77.2 16% Personal Cards 7.6 0.5 8.1 2% To
Slide 30: Trading-related Net Revenues and Value at Risk
Trading-related Net Revenues and Value at Risk Aug 3, 2021 to Oct 29, 2021 (pre-tax basis and in millions of Canadian dollars) 30 20 10 0 (10) (20) (30) Daily Revenue Total Trading VaR Risk Review December 3, 2021 30
Slide 31: Appendix
Appendix
Slide 32: Canadian Personal & Commercial Banking - Balances
Canadian Personal & Commercial Banking - Balances Gross Loans & Acceptances ($B) Deposits ($B) 232.4 231.7 235.4 271.1 274.1 227.0 264.6 269.1 217.9 251.0 115.8 115.8 117.3 113.3 131.4 130.3 130.9 106.0 129.6 130.8 51.6 53.1 52.3 53.7 48.6 8.1 8.5 8.3 8.6 8.4 97.4 101.0 101.4 104.5 87.1 88.0 91.6 93
Slide 33: U.S. Personal & Commercial Banking – Balances
U.S. Personal & Commercial Banking – Balances Figures on this slide are in U.S. dollars2 Gross Loans & Acceptances (US$B) Deposits (US$B) 111.7 113.8 115.9 91.8 93.3 91.9 93.7 110.3 90.4 106.0 10.3 10.8 11.0 11.0 11.2 5.1 4.4 4.3 4.5 4.2 48.0 48.3 48.0 48.1 49.4 75.0 76.6 78.0 76.4 78.3 63.7 65.8 62
Slide 34: U.S. Personal & Commercial Banking (CDE)
U.S. Personal & Commercial Banking (CDE) Reported Adjusted1 (CDE $MM) Q4 21 Q3 21 Q4 20 Q4 21 Q3 21 Q4 20 1 Net interest income (teb) 1,074 1,048 1,058 1,074 1,048 1,058 Non-interest revenue 308 304 274 308 304 274 Revenue (teb)1 1,382 1,352 1,332 1,382 1,352 1,332 Expenses 743 689 745 734 681 732 1
Slide 35: Canadian Residential-Secured Lending
Canadian Residential-Secured Lending Residential-Secured Lending by Region ($170.0B) HELOC $78.0 • Total Canadian residential-secured lending Uninsured Mortgages portfolio at $170.0B, representing 36% of total $33.9 loans Insured Mortgages 26% ─ LTV1 on uninsured of 48% $27.1 25% ─ 90-day delinquenc
Slide 36: Sectors Impacted by COVID-19 Pandemic
Sectors Impacted by COVID-19 Pandemic Gross Loans & % of Total By Industry of Heightened Focus Acceptances GL&A ($B, as at Q4 21) (GL&A) • Sectors highly impacted by COVID make up less than 5% of the portfolio Hotels 4.6 1.0% • Portfolio is diversified and well-secured by real estate Restaurants 4.1
Slide 37: Adjusting Items
Adjusting Items Adjusting items1 - Pre-tax ($MM) Q4 21 Q3 21 Q4 20 F2021 F2020 Adjusting Items Impacting Revenue (Pre-tax) Impact of Divestitures - - - 29 - Adjusting Items Impacting Non-Interest Expense (Pre-tax) Acquisition integration costs (1) (3) (3) (9) (14) Amortization of acquisition-related
Slide 38: 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