Bank Of Montreal · TSX:BMO
Bank Of Montreal — Q1 2025 Earnings Presentation
44 slides from Bank Of Montreal's earnings presentation, Feb 25, 2025
Slide 1: Investor Presentation Q1 25
BMO Financial Group Investor Presentation For the Quarter Ended January 31, 2025 February 25, 2025 Q1 25
Slide 2: Caution Regarding Forward-Looking Statements
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 securities regulators or the U.S. Securities and Ex
Slide 3: Darryl White, Chief Executive Officer
Darryl White Chief Executive Officer Q1 25
Slide 4: Strong operating performance
Strong operating performance PPPT2 growth and positive operating leverage, moderation in loan loss provisions Q1 2025 Net Income EPS PPPT2 Y/Y Growth Operating Leverage Adjusted1 $2.3B Adjusted1 $3.04 Adjusted1,2 32% Adjusted1 8.9% Adjusted 1 Reported $2.1B Reported $2.83 Reported2 68% Reported 20.1
Slide 5: Diversified businesses delivering resilient performance
Diversified businesses delivering resilient performance Canadian Personal & Commercial Banking U.S. Personal & Commercial Banking Reported Revenue ($MM) Reported Revenue (teb2, US$MM) PPPT1 Y/Y Growth PPPT1 Y/Y Growth 2,934 3,065 Adjusted1 13% 1,833 1,810 1,871 Adjusted1 6% 2,778 Reported1 13% Repor
Slide 6: Our Purpose
Our Purpose For a Thriving Economy For a Sustainable Future For an Inclusive Society Providing access to capital and Being our clients’ lead partner in Committing to zero barriers to valuable financial advice the transition to a net-zero world inclusion • Annual Employee Giving Campaign raised $39 m
Slide 7: Financial Results
Financial Results For the Quarter Ended January 31, 2025 Tayfun Tuzun Chief Financial Officer Q1 25
Slide 8: Q1 F2025 - Financial Highlights
Q1 F2025 - Financial Highlights Strong performance with double-digit PPPT1 growth and positive operating leverage • Adjusted2 EPS $3.04, up $0.48 Y/Y Reported Adjusted2 (reported $2.83, up $1.10) ($MM) Q1 25 Y/Y Q/Q Q1 25 Y/Y Q/Q • Adjusted2 net income up 21% Y/Y Revenue 9,266 21% 3% 9,266 18% 11% (
Slide 9: U.S. P&C – Key contributor to BMO's path to 15% total bank ROE
U.S. P&C – Key contributor to BMO’s path to 15% total bank ROE1 Strategic Opportunities + 12% • Capitalize on revenue synergies and U.S. scale 6% • Grow and deepen One Client relationships • Leverage expanded capabilities and talent U.S. P&C Operating Revenue Normalized Balance Sheet U.S. P&C • Capi
Slide 10: Balance Sheet
Balance Sheet Diversified loan and deposit portfolio • Average gross loans and acceptances up 6% Y/Y, or 4% Average Gross Loans and Acceptances ($B) excluding the impact of the RV loan portfolio sale1 in the prior year, Indirect Retail Auto wind-down and the stronger 671.3 692.0 655.0 U.S. dollar, d
Slide 11: Net Interest Margin
Net Interest Margin1 • Adjusted2 NII ex. trading and insurance up 11% Y/Y mainly due to strong growth in Canadian P&C, NII ($MM) and NIM ex. trading and insurance (%)1 2.13 higher NII in BMO Capital Markets and the 1.93 7,700 stronger U.S. dollar; up 5% Q/Q 1.84 2. 1 7,200 1.82 1.83 6,700 1.91 1.93
Slide 12: Non-Interest Revenue
Non-Interest Revenue Non-Interest Revenue by Category ($MM) • Adjusted1 non-interest revenue up 24% Y/Y Reported 2,951 3,459 3,398 3,519 3,868 (reported up 31%); up 15% Y/Y excluding trading (reported up 23%) 3,868 3,459 3,398 3,519 362 – Trading revenue up 75% Y/Y driven by Adjusted1 3,115 331 266
Slide 13: Non-Interest Expense
Non-Interest Expense • Adjusted1 expenses up 9% Y/Y Y/Y Change in Non-Interest Expense ($MM) (reported up 1%) 9% Adjusted1 – Stronger U.S. dollar, higher 1% Reported 2% Adjusted1 performance-based compensation and (6)% Reported the impact from the consolidation of certain U.S. retirement benefit pla
Slide 14: Strong Q1'25 CET1 Ratio of 13.6%
Strong Q1’25 CET1 Ratio of 13.6% • Q1’25 CET1 ratio of 13.6%, relatively Common Equity Tier 1 Ratio (%) unchanged from Q4’24, primarily +22 bps -13 bps reflecting: – Internal capital generation -4 bps +4 bps 13.6% Largely offset by – Higher source currency RWA 13.6% – 1.2 million common shares repur
Slide 15: Canadian Personal & Commercial Banking
Canadian Personal & Commercial Banking Record revenue and strong PPPT2 performance • Adjusted1 and reported net income Reported Adjusted1 down 3% Y/Y ($MM) Q1 25 Y/Y Q/Q Q1 25 Y/Y Q/Q • Adjusted1 and reported PPPT2 up 13% Y/Y Net interest income 2,385 11% 4% 2,385 11% 4% • Revenue up 10% Y/Y Non-int
Slide 16: U.S. Personal & Commercial Banking
U.S. Personal & Commercial Banking Good PPPT2 growth and lower PCL Q/Q Amounts that follow are in U.S. dollars: Reported Adjusted1 1 • Adjusted net income down 4% Y/Y (US$MM) Q1 25 Y/Y Q/Q Q1 25 Y/Y Q/Q (reported down 3%) Net interest income (teb) 3 1,541 -% 2% 1,541 -% 2% • Adjusted1 PPPT2 up 6% Y/
Slide 17: BMO Wealth Management
BMO Wealth Management Strong results in Wealth & Asset Management and Insurance • Adjusted1 and reported net income Reported Adjusted1 up 53% Y/Y ($MM) Q1 25 Y/Y Q/Q Q1 25 Y/Y Q/Q • Revenue up 19% Y/Y Wealth & Asset Management 1,452 16% 4% 1,452 16% 4% – Wealth and Asset Management Insurance 134 64%
Slide 18: BMO Capital Markets
BMO Capital Markets Record revenue performance driven by strong client activity • Adjusted1 net income up 45% Y/Y Reported Adjusted1 (reported up 49%) ($MM) Q1 25 Y/Y Q/Q Q1 25 Y/Y Q/Q • Revenue2 up 30% Y/Y: Global Markets 1,361 43% 45% 1,361 43% 45% – Global Markets performance up 43% I&CB 712 12%
Slide 19: Corporate Services
Corporate Services • Adjusted1 net loss of $220MM and Reported Adjusted1 reported net loss of $292MM for the ($MM) Q1 25 Y/Y Q/Q Q1 25 Y/Y Q/Q quarter, compared with an adjusted1 Revenue (125) 324 (605) (125) 146 (16) net loss of $316MM and reported net 2 Group teb offset (9) 19 2 (9) 19 2 loss of $
Slide 20: Risk Review
Risk Review For the Quarter Ended January 31, 2025 Piyush Agrawal Chief Risk Officer Q1 25
Slide 21: Provision for Credit Losses (PCL)
Provision for Credit Losses (PCL) • Q1’25 PCL ratio on impaired loans2 of 50 bps, down 16 Provision for Credit Losses (PCL) bps Q/Q By Operating Group Q1 24 Q2 24 Q3 24 Q4 24 Q1 25 ($MM) • Lower provisions primarily from BMO Capital Markets and U.S. Commercial businesses, partially offset by Persona
Slide 22: Allowance and Provision on Performing Loans
Allowance and Provision on Performing Loans • The $152 million provision for credit losses on Allowance on Performing performing loans was largely driven by: Q1 25 Loans (APL) and PCL on APL to – impact of the uncertain economic environment, Q4 24 Q1 25 Foreign Q1 25 Performing Loans (PCL) Performin
Slide 23: Gross Impaired Loans and Formations
Gross Impaired Loans and Formations • Gross impaired loans (GIL) ratio3 at 100 bps Formations Gross Impaired Loans increased from last quarter primarily due to higher By Industry impaired loans in U.S. Commercial Banking, as well ($MM, as at Q1 25) CA & CA & as the impact of the stronger U.S. dollar
Slide 24: Appendix
Appendix Risk Review • February 25, 2025 24
Slide 25: Loan Portfolio Overview
Loan Portfolio Overview Well-diversified by geography and industry Gross Loans & Acceptances Impaired PCL ($B) ($MM) • Gross Loans & Acceptances up 1.7% Q/Q, or flat Q/Q excluding the impact of the By Industry Canada & Total Canada & Total stronger U.S. dollar U.S. U.S. (As at Q1 25) Other1 BMO Othe
Slide 26: Business & Government Portfolio Overview
Business & Government Portfolio Overview B&G Portfolio Industry Diversification Gross Loans & Acceptances Canada & Total % of Utilities, 2% By Industry U.S. Other BMO Total Construction, 2% ($B, as at Q1 25) Financing Products, 2% Other¹, 3% Commercial Real Total Consumer 241.6 59.3 300.9 43% Transp
Slide 27: Commercial Real Estate
Commercial Real Estate • Commercial Real Estate (CRE) portfolio at $78.2B represents CRE by Geography1 11% of Total Bank Gross Loans & Acceptances (GL&A) British Columbia 12% – Q/Q increase primarily driven by the stronger U.S. dollar and Ontario 27% growth in Canadian Multi-Residential Quebec 7% •
Slide 28: Canadian Consumer Portfolio Overview
Canadian Consumer Portfolio Overview • Total Canadian Consumer lending portfolio balances of Canadian Consumer Portfolio $241.6B in Q1’25, represent 35% of total loans – 89% of the portfolio is secured – 90+ day delinquency rate for the portfolio at 41 bps Residential Mortgages – Average FICO score
Slide 29: Canadian Residential Secured Lending Portfolio Overview
Canadian Residential Secured Lending Portfolio Overview Residential-Secured Lending by Region ($210.0B) • Total Canadian residential-secured lending portfolio at $210.0B, $105.0 Amortizing HELOC representing 30% of total loans Revolving HELOC – LTV1 on uninsured of 53% 18% $39.9 Uninsured Mortgages
Slide 30: Canadian Mortgage Portfolio Profile
Canadian Mortgage Portfolio Profile • Renewal risk has decreased significantly due Mortgage Maturity Schedule to lower interest rates and proactive ($160.1B: 69% fixed rate; 31% variable rate) customer outreach – Only 2% of mortgages are in negative Fixed Variable amortization1 51.4 50.6 – Over 30%
Slide 31: Trading-Related Net Revenue and Value-at-Risk
Trading-Related Net Revenue and Value-at-Risk November 1, 2024 to January 31, 2025 (pre-tax basis and in millions of Canadian dollars) 60 40 20 0 (20) (40) (60) Daily Revenue Total Trading VaR Risk Review • February 25, 2025 31
Slide 32: Advancing our Digital First strategy
Advancing our Digital First strategy Delivering on our Digital First agenda, Driving tangible customer Being recognized as an industry leader powered by AI, data and tech modernization and business value and innovator • Driving tangible customer and business Active Digital Users, Retail2 (000) • Ran
Slide 33: Canadian Personal & Commercial Banking – Balances
Canadian Personal & Commercial Banking – Balances Average Gross Loans & Acceptances ($B) Average Deposits ($B) 333.0 337.6 312.5 314.0 317.3 288.8 143.9 145.7 136.5 211.9 213.1 199.6 7.1 6.9 6.8 53.1 53.3 51.9 12.8 13.9 14.2 109.4 114.9 117.5 100.5 100.9 89.2 Q1'24 Q4'24 Q1'25 Q1'24 Q4'24 Q1'25 1 Co
Slide 34: U.S. Personal & Commercial Banking – Balances
U.S. Personal & Commercial Banking – Balances Amounts on this slide are in U.S. dollars1 Average Gross Loans & Acceptances (US$B) Average Deposits (US$B) 167.2 168.3 152.0 150.3 150.9 160.7 34.6 34.5 35.0 84.4 84.7 80.3 117.4 115.8 115.9 80.4 82.8 83.6 Q1'24 Q4'24 Q1'25 Q1'24 Q4'24 Q1'25 Commercial
Slide 35: Canadian and U.S. deposit trends
Canadian and U.S. deposit trends Canadian P&C and BMO Wealth Management deposits CDE$B, average balances 359 364 347 333 318 7% 5% • Q1’25 Canadian deposits grew 9% Y/Y mainly 7% 290 6% 7% 22% driven by higher demand deposits across both 266 21% 238 3% 20% 21% 20% retail and commercial customers wit
Slide 36: Asset Yields and Liabilities Costs
Asset Yields1 and Liabilities Costs2 Average Earning Assets ($B) and Yield1 (%) Average Liabilities ($B) and Costs2 (%) 5.28% 5.40% 5.40% 5.27% 3.56% 3.72% 3.75% 5.00% 3.40% Yield on Total 3.10% Cost on Total Average Liabilities Earning Assets 1,336 1,436 1,273 1,320 1,272 1,306 1,194 1,217 1,259 1,
Slide 37: Interest Rate Sensitivity
Interest Rate Sensitivity • Earnings benefit / exposure to an incremental +/- 100 bps rate • Long-term investment rates decreased Q/Q for CAD and shock reflects a relatively neutral positioning increased for USD; forecast remains higher than historical levels and continue to support NIM • BMO strate
Slide 38: Non-GAAP and Other Financial Measures
Non-GAAP and Other Financial Measures Results and measures in this document are presented on a generally accepted accounting principles (GAAP) basis. Unless otherwise indicated, all amounts are in Canadian dollars and have been derived from our audited annual consolidated financial statements, prepa
Slide 39: Non-GAAP and Other Financial Measures
Non-GAAP and Other Financial Measures (Canadian $ in millions, except as noted) Q1 25 Q4 24 Q1 24 Adjusting Items Reported Net interest income 5,398 5,438 4,721 Results Adjusted results in the current quarter, prior year and prior quarter Non-interest revenue 3,868 3,519 2,951 excluded the following
Slide 40: Summary of Reported and Adjusted Results by Operating Group
Summary of Reported and Adjusted Results by Operating Group (Canadian $ in millions unless otherwise stated) Q1 25 Q4 24 Q3 24 Q2 24 Q1 24 Total Bank Reported Net Income 2,138 2,304 1,865 1,866 1,292 Acquisition and integration costs 7 27 19 26 57 Amortization of acquisition-related intangible asset
Slide 41: Pre-Provision, Pre-Tax Earnings (PPPT) Reconciliation
Pre-Provision, Pre-Tax Earnings (PPPT) Reconciliation (Canadian $ in millions unless otherwise stated) Q1 25 Q4 24 Q3 24 Q2 24 Q1 24 Total Bank Reported Income before taxes 2,828 3,007 2,447 2,425 1,656 Total provision for (recovery of) credit losses 1,011 1,523 906 705 627 Reported Pre-Provision, P
Slide 42: Revenue, Non-Interest Expense and Efficiency Ratio Reconciliation
Revenue, Non-Interest Expense and Efficiency Ratio Reconciliation (Canadian $ in millions unless otherwise stated) Q1 25 Q4 24 Q3 24 Q2 24 Q1 24 Total Bank Reported Revenue 9,266 8,957 8,192 7,974 7,672 Legal provision/reversal (including related interest expense and legal fees) — (589) 14 14 14 Net
Slide 43: Summary of Reported and Adjusted Results by Operating Group
Summary of Reported and Adjusted Results by Operating Group Reported Adjusted Reported Adjusted (Canadian $ in millions unless otherwise stated) (Canadian $ in millions unless otherwise stated) Q1 25 Q4 24 Q1 24 Q1 25 Q4 24 Q1 24 Q1 25 Q4 24 Q1 24 Q1 25 Q4 24 Q1 24 Total Bank Revenue 9,266 8,957 7,6
Slide 44: Investor Relations
BMO Financial Group Investor Relations Contact Information bmo.com/investorrelations E-mail: investor.relations@bmo.com BILL ANDERSON PERRY CHEN-SEE Managing Director, Investor Relations Director, Investor Relations 416.867.7834 416.359.8074 bill2.anderson@bmo.com perry.chensee@bmo.com