Bank Of Montreal · TSX:BMO
Bank Of Montreal — BMO Financial Group — Q2 2019 Earnings Presentation
25 slides from Bank Of Montreal's earnings presentation, May 29, 2019
Slide 1: BMO Financial Group Investor Presentation Q2 19
BMO Financial Group Investor Presentation For the Quarter Ended April 30, 2019 May 29, 2019 Q2 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: YTD Q2 2019 – Financial Highlights
YTD Q2 2019 – Financial Highlights Adjusted1 Reported Net Income $3,060MM $3,007MM • Adjusted1 net income up 6% Y/Y with good growth in our P&C businesses EPS $4.62 $4.54 • Adjusted1 EPS up 7% Y/Y Operating • Severance expense in BMO Capital Markets (0.5)% 3.5% impacted operating leverage by (1.8)%
Slide 5: U.S. Operations
U.S. Operations U.S. segment continuing to deliver strong results Figures that follow are on a U.S. dollar basis U.S. Segment Reported Adjusted1 • U.S. segment adjusted1 year-to-date (US$MM) Q2 19 Q1 19 Q2 18 Q2 19 Q1 19 Q2 18 earnings up 29% Y/Y Revenue 1,526 1,542 1,375 1,526 1,542 1,375 ‒ Year-to
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
Financial Results For the Quarter Ended April 30, 2019 Tom Flynn Chief Financial Officer Q2 19
Slide 8: Q2 2019 – Financial Highlights
Q2 2019 – Financial Highlights Adjusted1 net income up Y/Y driven by good growth in P&C businesses • Adjusted1 EPS $2.30, up 5% Y/Y (reported up 22%) Reported Adjusted1 ($MM) Q2 19 Q1 19 Q2 184 Q2 19 Q1 19 Q2 18 • Adjusted1 net income up 4% Y/Y 2 Net Revenue 5,652 5,591 5,248 5,652 5,591 5,248 – U.S
Slide 9: Strong Capital Position
Strong Capital Position Capital position strong with CET1 Ratio at 11.3% Common Equity Tier 1 Ratio +27 bps -34 bps 11.4% -3 bps 11.3% Q1 2019 Internal Higher source Other changes in Q2 2019 capital generation currency RWA CET1 capital Basis points may not add due to rounding • CET1 Ratio of 11.3% a
Slide 10: Canadian Personal & Commercial Banking
Canadian Personal & Commercial Banking Results reflect continued good balance momentum • Adjusted1 and reported net income up 5% Y/Y Reported Adjusted1 ($MM) Q2 19 Q1 19 Q2 18 Q2 19 Q1 19 Q2 18 • Revenue up 5% Y/Y Revenue 1,921 1,954 1,830 1,921 1,954 1,830 – Average loans up 6% Y/Y. Commercial2 up
Slide 11: U.S. Personal & Commercial Banking
U.S. Personal & Commercial Banking Strong loan and deposit volume growth Figures that follow are in U.S. dollars Reported Adjusted1 (US$MM) Q2 19 Q1 19 Q2 18 Q2 19 Q1 19 Q2 18 • Adjusted1 net income up 12% Y/Y (reported 13%) Revenue (teb) 990 1,002 939 990 1,002 939 • Revenue up 5% Y/Y Total PCL 17
Slide 12: BMO Capital Markets
BMO Capital Markets Continued strong I&CB and U.S. performance driving underlying business growth • Adjusted1 net income of $253MM; reported Reported Adjusted1 $249MM ($MM) Q2 19 Q1 19 Q2 18 Q2 19 Q1 19 Q2 18 – Continued strong performance in I&CB Trading Products 719 632 621 719 632 621 – Results a
Slide 13: BMO Wealth Management
BMO Wealth Management Well positioned with diversified business • Adjusted1 and reported net income up 3% Y/Y Reported Adjusted1 – Traditional Wealth relatively unchanged Y/Y ($MM) Q2 19 Q1 19 Q2 18 Q2 19 Q1 19 Q2 18 2 – Strong net interest income growth and improved equity Net Revenue 1,281 1,214 1
Slide 14: Corporate Services
Corporate Services • Reported and adjusted1 net loss of $78MM for the Reported2 Adjusted1,2 quarter compared with a reported net loss of ($MM) Q2 19 Q1 19 Q2 18 Q2 19 Q1 19 Q2 18 $272MM and an adjusted1 net loss of $78MM in the Revenue (17) 20 (20) (17) 20 (20) prior year Group teb offset2 (78) (67)
Slide 15: Risk Review
Risk Review For the Quarter Ended April 30, 2019 Patrick Cronin Chief Risk Officer Q2 19
Slide 16: Provision for Credit Losses (PCL)
Provision for Credit Losses (PCL) • Q2’19 PCL ratio on Impaired Loans at 14 bps, PCL By Operating Group ($MM) Q2 19 Q1 19 Q2 18 up 2 bps Q/Q Consumer – Canadian P&C 107 104 118 • Allowance for Credit Losses on Performing Loans increased PCL by $26 million Commercial – Canadian P&C 15 10 13 Total Can
Slide 17: Gross Impaired Loans (GIL) and Formations
Gross Impaired Loans (GIL) and Formations Formations Gross Impaired Loans • GIL ratio 53 bps, up 5 bps Q/Q but By Industry ($MM, as at Q2 19) down 3 bps Y/Y Canada & Canada & U.S. Total U.S. Total Other Other1 Consumer 262 51 313 496 439 935 Formations ($MM) Agriculture 7 37 44 58 229 287 Service In
Slide 18: Loan Portfolio Overview
Loan Portfolio Overview Gross Loans & Acceptances Canada & By Industry U.S. Total % of Total • Loans are well diversified by Other1 ($B, as at Q2 19) Residential Mortgages 108.9 11.9 120.8 28% geography and industry Consumer Instalment and Other 54.0 10.4 64.4 15% Personal Cards 7.9 0.6 8.5 1% 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) 222.2 230.7 234.9 171.2 168.2 158.0 100.6 100.7 99.8 104.2 107.5 98.4 46.0 46.2 45.1 9.0 8.9 8.6 68.7 75.1 79.1 59.6 64.0 63.7 Q2'18 Q1'19 Q2'19 Q2'18 Q1'19 Q2'19 Residential Mortgages Co
Slide 21: U.S. Personal & Commercial Banking – Balances
U.S. Personal & Commercial Banking – Balances Average Gross Loans & Acceptances1 (US$B) Average Deposits1 (US$B) 78.5 79.1 85.92 82.82 5.0 Personal 70.0 76.92 4.9 Loans 4.3 11.2 11.3 34.0 35.2 11.5 30.3 Commercial 66.0 69.2 Loans 60.4 43.3 45.1 39.7 Q2'18 Q1'19 Q2'19 Q2'18 Q1'19 Q2'19 Commercial Per
Slide 22: Canadian Residential-Secured Lending
Canadian Residential-Secured Lending Residential-Secured Lending by Region ($141.2B) • Total Canadian residential-secured lending HELOC portfolio at $141.2B, representing 32% of total $62.6 loans Uninsured Mortgages Insured Mortgages 24% $27.3 ─ LTV1 on uninsured of 51% ─ 90 day delinquency rate for
Slide 23: Trading-related Net Revenues and Value at Risk
Trading-related Net Revenues and Value at Risk February 1, 2019 to April 30, 2019 (pre-tax basis and in millions of Canadian dollars) 100 80 60 40 20 0 (20) Daily Revenue Total Trading VaR Risk Review May 29, 2019 23
Slide 24: Adjusting Items
Adjusting Items Adjusting items1 - Pre-tax ($MM) Q2 19 Q1 19 Q2 18 YTD Q2 19 YTD Q2 18 Amortization of acquisition-related intangible assets2 (30) (31) (29) (61) (57) Acquisition integration costs2 (2) (6) (4) (8) (8) Restructuring costs3 - - (260) - (260) Adjusting items included in reported pre-ta
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