BMO Financial Group (TSX:BMO)(NYSE:BMO) and BMO Bank of Montreal
-
Financial Results Highlights(1):
Fiscal 2012 Compared with Fiscal 2011:
-- Net income of $4,189 million, up $1,075 million or 35%
-- Adjusted net income(2) of $4,092 million, up $817 million or 25%
-- EPS(3) of $6.15, up 27%
-- Adjusted EPS(2)(3) of $6.00, up 18%
-- Provisions for credit losses of $765 million; adjusted provisions of
$471 million, down $637 million
-- Common Equity Ratio increases to 10.5% using a Basel II approach
Fourth Quarter 2012 Compared with Fourth Quarter 2011:
-- Net income of $1,082 million, up $314 million or 41%
-- Adjusted net income(2) of $1,125 million, up $293 million or 35%
-- EPS(3) of $1.59, up 43%
-- Adjusted EPS(2)(3) of $1.65, up 38%
-- ROE of 15.6%, compared with 12.7%
-- Adjusted ROE(2) of 16.3%, compared with 13.9%
-- Provisions for credit losses of $192 million; adjusted provisions of
$113 million, down $168 million
For the fourth quarter ended October 31, 2012, BMO Financial
Group reported strong net income of $1,082 million or $1.59 per
share. On an adjusted basis, net income was $1,125 million or $1.65
per share. For fiscal 2012, net income was $4,189 million and EPS
was $6.15. Adjusted net income was $4,092 million and adjusted EPS
was $6.00.
(1) Effective the first quarter of 2012, BMO's consolidated
financial statements and the accompanying Interim Management's
Discussion and Analysis (MD&A) or Financial Review are prepared
in accordance with International Financial Reporting Standards
(IFRS), as described in Note 1 to the audited consolidated
financial statements for the year ended October 31, 2012. Amounts
in respect of comparative periods for 2011 have been restated to
conform to the current presentation. References to GAAP mean IFRS,
unless indicated otherwise.
(2) Results and measures in this document are presented on a
GAAP basis. They are also presented on an adjusted basis that
excludes the impact of certain items. Items excluded from fourth
quarter 2012 results in the determination of adjusted results
totalled a charge of $43 million after tax, comprised of a $35
million after tax net benefit of credit-related items in respect of
the acquired Marshall & Ilsley Corporation (M&I) performing
loan portfolio; costs of $153 million ($95 million after tax) for
the integration of the acquired business; a $34 million ($24
million after tax) charge for amortization of acquisition-related
intangible assets on all acquisitions; a benefit on run-off
structured credit activities of $67 million ($67 million after
tax); a restructuring charge of $74 million ($53 million after tax)
to align our cost structure for the current and future business
environment; and a decrease in the collective allowance for credit
losses of $49 million ($27 million after tax). Adjusted results and
measures are non-GAAP and are detailed in the Adjusted Net Income
section, and (for all reported periods) in the Non-GAAP Measures
section of the Financial Review, where such non-GAAP measures and
their closest GAAP counterparts are disclosed.
(3) All Earnings per Share (EPS) measures in this document refer
to diluted EPS unless specified otherwise. EPS is calculated using
net income after deductions for net income attributable to
non-controlling interest in subsidiaries and preferred share
dividends.
Note: All ratios and percentage changes in this report are based
on unrounded numbers.
"BMO's fourth quarter results mark a strong finish to a pivotal
year for the bank," said Bill Downe, President and Chief Executive
Officer, BMO Financial Group. "In the quarter we successfully
completed the conversion of the core banking platform in the U.S.
and turned the page on the purchase of M&I, announced 24 months
ago. Since the fourth quarter of 2010, we have generated reported
earnings of $7.3 billion and increased BMO's book value from $19.3
billion to $26.2 billion - an increase of 18%. During the year we
increased the dividend and grew net loans and acceptances by 7.4%
and deposits by 7.1%. A concerted focus on efficiency was reflected
in a reduction of 700 full-time employees.
"P&C Canada experienced good quarter-over-quarter balance
sheet growth - with loans and deposits up. We continue to see
growth in residential mortgage market share, and believe the
changes to Canada's mortgage market announced earlier this year,
which are aligned with BMO's risk practices and ongoing efforts to
encourage Canadians to borrow smartly, are having the desired
moderating effect on housing prices in most markets.
"Over the past two years, with the acquisition of Marshall &
Ilsley Corporation, we have fundamentally transformed the bank,
changed its growth trajectory, and enhanced long-term value for
shareholders. BMO Harris Bank has strong deposit market share
positions in our core Midwest markets, and our U.S. footprint has
doubled in size.
"During the year over 600 U.S. bank branches have been
refreshed; high visibility BMO signage and promotion have been put
in place; and 1,370 bank machines were raised to a new standard.
Our reputation as a consistent commercial lender continues to grow.
The core commercial and industrial portfolio in the U.S. has now
increased in four sequential quarters - up 15 per cent from a year
ago.
"Our efforts to attract new client assets in our wealth
businesses have been effective. Of note, our U.S. wealth segment,
which has an advantaged private banking and asset management
platform, delivered over $100 million in adjusted earnings in 2012.
In Canada, we continue to innovate as a leader in the ETF market
and BMO InvestorLine's introduction of adviceDirect means that even
if you are a do-it-yourself investor, you can get specific
investment recommendations to help you manage your portfolio so you
don't have to feel like you're on your own.
"BMO Capital Markets continues to deliver very good earnings
with strong ROE. Our reputation as experienced advisors who help
clients navigate emerging opportunities continues to grow.
"We are confident that each of our U.S. businesses - personal
and commercial, wealth, and capital markets - has the scale to
compete for new customers. We are well-positioned to leverage the
investments we have made in each of these businesses and focus on
organic growth.
"I would like to thank our customers for the trust they place in
the bank and in particular acknowledge the customers who were part
of the conversion of the core banking platform in the U.S. for
their continuing loyalty. We recognize that critical to the bank's
success is our ability to serve customers exceptionally well - and
help them succeed. The bank's employees are at the heart of our
differentiation strategy; they continuously drive forward our
vision to define great customer experience - and I would like to
acknowledge them for their hard work and the great improvements
being made in the way work gets done more efficiently for our
customers.
"As we look ahead to 2013, we are confident that each of our
businesses is positioned to deliver high quality sustained earnings
growth against a high standard of customer experience," concluded
Mr. Downe.
Concurrent with the release of results, BMO announced a first
quarter 2013 dividend of $0.72 per common share, unchanged from the
preceding quarter and equivalent to an annual dividend of $2.88 per
common share. BMO's capital position is strong. We announced our
intention, subject to the approval of OSFI and the Toronto Stock
Exchange (TSX), to initiate a normal course issuer bid for up to
15,000,000 of the bank's own common shares.
BMO's 2012 audited annual consolidated financial statements and
accompanying management's discussion & analysis (MD&A) will
be available today at www.bmo.com, along with the supplementary
financial information report.
Operating Segment Overview
P&C Canada
Net income was $439 million in the fourth quarter, unchanged
from a year ago. Reported results reflect provisions for credit
losses in BMO's operating groups on an expected loss basis. On a
basis that adjusts reported results to reflect provisions on an
actual loss basis, P&C Canada's net income was up $26 million
or 6.2%. Results reflect the combination of higher volumes across
most products and lower net interest margin. Expense growth of 0.7%
year over year reflects good expense management with investments
for growth.
We are focused on making money make sense for our customers
while making it easier for them to use our products and services.
Our distribution network continues to expand, with 51 branch
locations opened or upgraded across the country, and the addition
of more than 350 cash dispensing ABMs in 2012. Enhancements to
online capabilities continue to provide customers with easy and
quick access to our services, and more and more customers are using
online and mobile features including email alerts and Mobile
PayPass functionality.
In personal banking, with the success and momentum of our home
financing campaign, we have established many new customer
relationships while expanding existing ones through increased
cross-selling of our products. In addition, our online appointment
booking capabilities and leads management engine are enabling our
sales force to work with customers to meet their needs and make
money make sense for them. We are confident in the continued
success of our business.
In commercial banking, our goal is to become the bank of choice
for businesses across Canada by providing the knowledge, advice and
guidance that customers value. Our award winning Online Banking for
Business platform is helping customers manage their businesses
better. We have seen positive early results following the recent
launch of BMO Business Bundles, a product that provides flexible
banking solutions that help make money make sense for business
customers. We continue to rank #2 in Canadian business banking loan
market share for small and medium sized loans.
P&C U.S. (all amounts in US$)
Net income of $132 million decreased $21 million or 14% from
$153 million in the fourth quarter a year ago. Adjusted net income
was $147 million, down $24 million or 13% from strong results a
year ago due to lower revenue, due primarily to a reduction in
certain loan portfolios and regulatory changes that lowered
interchange fees. Adjusted net income increased 2.9% from the third
quarter.
The core commercial and industrial loan portfolio continues to
grow, having now increased in four sequential quarters with growth
of $2.6 billion or 15% from the fourth quarter a year ago.
In the Chicago area, BMO Harris Bank's deposits market share
improved to 11.6% and we maintained our second place ranking. We
have good relationships in place with our customers, who see BMO
Harris Bank as a strong and stable leader, and deepening those
relationships is helping to drive growth in market share. Our
Wisconsin deposits market share was even higher, at 15.8% with a
second place ranking.
During the quarter, we completed the integration of the
operating systems of Harris Bank and M&I, giving customers
access to a much larger network of branches and ABMs. In
conjunction with the completion of the integration, we unveiled new
signage on a number of the branches and our complete network of 630
branches and more than 1,370 ABMs now displays BMO Harris Bank
signage.
Private Client Group
Net income was $166 million, up $29 million or 21% from a year
ago. Adjusted net income was $171 million, up $28 million or 20%
from a year ago. Adjusted net income in Private Client Group (PCG),
excluding Insurance, was $95 million, down $8 million or 7.1% from
a year ago. These results reflect higher revenue across most
businesses, offset by higher strategic initiative spending to drive
future revenue growth. Adjusted net income in PCG Insurance was $76
million, up $36 million or 86% from a year ago. These results
benefited from changes to our investment portfolio to improve
asset-liability management and the annual review of actuarial
assumptions. Lower interest rates reduced PCG Insurance adjusted
net income by $7 million in the current quarter and by $19 million
a year ago.
Assets under management and administration grew $40 billion from
a year ago to $465 billion due to market appreciation and new
client assets.
On September 10, 2012, BMO InvestorLine launched adviceDirect,
an innovative and personalized service that provides investing
advice to online investors. The first of its kind in Canada,
adviceDirect puts investors in control by providing specific
investment recommendations to help them manage their investment
portfolios.
BMO Capital Markets
Net income for the quarter was $293 million, more than double
the level of a year ago. Revenues in the current quarter were
significantly higher, as the market environment improved from the
weak conditions of the previous year. These conditions provided
more business opportunities, driving solid improvement in our
trading revenue, particularly in interest rate and equity trading
and increased underwriting fees.
Within BMO Capital Markets we remain focused on our core clients
and staying true to our North American strategy of consistently
delivering a great client experience while evolving in response to
the market.
During the quarter, BMO Capital Markets was named as the North
America M&A Investment Bank Team of the Year, Americas, by
Global M&A Network at the Americas M&A Atlas Awards for our
quality of advice on a series of award winning deals. The awards
honour outstanding firms, top deals and influential dealmakers from
the North American and South American mergers, acquisitions,
corporate and private equity deal communities.
BMO Capital Markets participated in 134 new issues in the
quarter including 38 corporate debt deals, 29 government debt
deals, 57 common equity transactions and 10 issues of preferred
shares, raising $52 billion.
Corporate Services
Net income for the quarter was $54 million, an improvement of
$160 million from a year ago. On an adjusted basis, net income was
$74 million, an improvement of $141 million from a year ago.
Adjusting items are detailed in the Adjusted Net Income section and
in the Non-GAAP Measures section. Adjusted provisions for credit
losses were $173 million lower than a year ago due in part to a
$132 million ($82 million after tax) recovery of provisions for
credit losses on the M&I purchased credit impaired loan
portfolio, primarily due to the timing and amount of repayments of
loans in excess of expectations at closing. The remaining decrease
was attributable to lower provisions charged to Corporate Services
under BMO's expected loss provisioning methodology, which is
explained in the Review of Operating Groups' Performance section at
the end of this document.
Acquisition of Marshall & Ilsley Corporation (M&I)
On July 5, 2011, BMO completed the acquisition of M&I. In
this document, M&I is generally referred to as the 'acquired
business' and other acquisitions are specifically identified.
Activities of the acquired business are primarily reflected in the
P&C U.S., Private Client Group and Corporate Services segments,
with a small amount included in BMO Capital Markets.
The acquired business contributed $90 million to reported net
income and $169 million to adjusted net income for the quarter. It
contributed $647 million to reported net income and $730 million to
adjusted net income for the fiscal year. In 2011, it contributed
$105 million to net income and $180 million to adjusted net
income.
Adjusted Net Income
Management has designated certain amounts as adjusting items and
has adjusted GAAP results so that we can discuss and present
financial results without the effects of adjusting items to
facilitate understanding of business performance and related
trends. Management assesses performance on a GAAP basis and on an
adjusted basis and considers both to be useful in the assessment of
underlying business performance. Presenting results on both bases
provides readers with a better understanding of how management
assesses results. Adjusted results and measures are non-GAAP and,
together with items excluded in determining adjusted results, are
disclosed in more detail in the Non-GAAP Measures section, along
with comments on the uses and limitations of such measures. Items
excluded from fourth quarter 2012 results in the determination of
adjusted results reduced reported net income by $43 million or
$0.06 per share and were comprised of:
-- the $35 million after tax net benefit for credit-related items in
respect of the M&I purchased performing loan portfolio, including $185
million for the recognition in net interest income of a portion of the
credit mark on the portfolio (including $69 million for the release of
the credit mark related to early repayment of loans), net of a $128
million provision for credit losses (comprised of an increase in the
collective allowance of $25 million and specific provisions of $103
million) and related income taxes of $22 million. These credit-related
items in respect of the M&I purchased performing loan portfolio can
significantly impact both net interest income and the provision for
credit losses in different periods over the life of the portfolio;
-- costs of $153 million ($95 million after tax) for integration of the
acquired business including amounts related to system conversions,
restructuring and other employee-related charges, consulting fees and
marketing costs in connection with customer communications and
rebranding activities;
-- the $67 million before and after tax benefit from run-off structured
credit activities (our credit protection vehicle and structured
investment vehicle). These vehicles are consolidated on our balance
sheet under IFRS and results primarily reflect valuation changes
associated with these activities that have been included in trading
revenue;
-- a decrease in the collective allowance for credit losses of $49 million
($27 million after tax) on loans other than the M&I purchased loan
portfolio;
-- a restructuring charge of $74 million ($53 million after tax) to help
align our cost structure for the current and future business
environment. This action is part of the broader effort underway in the
bank to improve productivity; and
-- the amortization of acquisition-related intangible assets of $34 million
($24 million after tax).
Adjusted net income was $1,125 million for the fourth quarter of
2012, up $293 million or 35% from a year ago. Adjusted earnings per
share were $1.65, up 38% from $1.20 a year ago. All of the above
adjusting items were recorded in Corporate Services except the
amortization of acquisition-related intangible assets, which is
charged to the operating groups. The impact of adjusting items for
comparative periods is summarized in the Non-GAAP Measures
section.
Caution
The foregoing sections contain forward-looking statements.
Please see the Caution Regarding Forward-Looking Statements that
follows.
The foregoing sections contain adjusted results and measures,
which are non-GAAP. Please see the Non-GAAP Measures section.
Financial Highlights
(Unaudited)
(Canadian $ in
millions,
except as
noted) For the three months ended
----------------------------------------------------------------------------
Change
from
October July April January October October
31, 2012 31, 2012 30, 2012 31, 2012 31, 2011 31, 2011
----------------------------------------------------------------------------
Income
Statement
Highlights
Total revenue $ 4,176 $ 3,878 $ 3,959 $ 4,117 $ 3,822 9.3 %
Provision for
credit losses 192 237 195 141 362 (46.5)
Non-interest
expense 2,701 2,484 2,499 2,554 2,432 11.0
Net income 1,082 970 1,028 1,109 768 40.8
Adjusted net
income (a) 1,125 1,013 982 972 832 35.1
----------------------------------------------------------------------------
Net income
attributable
to non-
controlling
interest in
subsidiaries 18 19 18 19 19 (2.1)
Net income
attributable
to Bank
shareholders 1,064 951 1,010 1,090 749 41.9
Adjusted net
income
attributable
to Bank
shareholders
(a) 1,107 994 964 953 813 36.0
----------------------------------------------------------------------------
Reported Net
Income by
Operating
Segment
Personal &
Commercial
Banking Canada 439 453 446 446 439 (0.2)%
Personal &
Commercial
Banking U.S. 130 129 121 137 155 (16.2)
Private Client
Group 166 109 145 105 137 20.7
BMO Capital
Markets 293 232 225 198 143 +100
Corporate
Services
(including
Technology and
Operations) 54 47 91 223 (106) nm
----------------------------------------------------------------------------
Common Share
Data ($)
Diluted
earnings per
share $ 1.59 $ 1.42 $ 1.51 $ 1.63 $ 1.11 $ 0.48
Diluted
adjusted
earnings per
share (a) 1.65 1.49 1.44 1.42 1.20 0.45
Dividends
declared per
share 0.72 0.70 0.70 0.70 0.70 0.02
Book value per
share 40.25 39.43 38.06 37.85 36.76 3.49
Closing share
price 59.02 57.44 58.67 58.29 58.89 0.13
Total market
value of
common shares
($ billions) 38.4 37.2 37.7 37.3 37.6 0.8
----------------------------------------------------------------------------
(Unaudited)
(Canadian $ in
millions,
except as For the twelve
noted) months ended
-----------------------------------------------
Change
from
October October October
31, 2012 31, 2011 31, 2011
-----------------------------------------------
Income
Statement
Highlights
Total revenue $ 16,130 $ 13,943 15.7 %
Provision for
credit losses 765 1,212 (36.8)
Non-interest
expense 10,238 8,741 17.1
Net income 4,189 3,114 34.5
Adjusted net
income (a) 4,092 3,275 24.9
-----------------------------------------------
Net income
attributable
to non-
controlling
interest in
subsidiaries 74 73 0.6
Net income
attributable
to Bank
shareholders 4,115 3,041 35.3
Adjusted net
income
attributable
to Bank
shareholders
(a) 4,018 3,202 25.5
-----------------------------------------------
Reported Net
Income by
Operating
Segment
Personal &
Commercial
Banking Canada 1,784 1,773 0.6 %
Personal &
Commercial
Banking U.S. 517 352 46.7
Private Client
Group 525 476 10.3
BMO Capital
Markets 948 902 5.1
Corporate
Services
(including
Technology and
Operations) 415 (389) nm
-----------------------------------------------
Common Share
Data ($)
Diluted
earnings per
share $ 6.15 $ 4.84 $ 1.31
Diluted
adjusted
earnings per
share (a) 6.00 5.10 0.90
Dividends
declared per
share 2.82 2.80 0.02
Book value per
share 40.25 36.76 3.49
Closing share
price 59.02 58.89 0.13
Total market
value of
common shares
($ billions) 38.4 37.6 0.8
-----------------------------------------------
As at
----------------------------------------------------------------------------
Change
from
October July April January October October
31, 2012 31, 2012 30, 2012 31, 2012 31, 2011 31, 2011
----------------------------------------------------------------------------
Balance Sheet
Highlights
Assets $ 525,449 $ 542,248 $ 525,503 $ 538,260 $ 500,575 5.0 %
Net loans and
acceptances 256,608 253,352 245,522 242,621 238,885 7.4
Deposits 323,702 328,968 316,067 316,557 302,373 7.1
Common
shareholders'
equity 26,190 25,509 24,485 24,238 23,492 11.5
----------------------------------------------------------------------------
For the three months ended (b)
----------------------------------------------------------------------------
October July April January October
31, 2012 31, 2012 30, 2012 31, 2012 31, 2011
----------------------------------------------------------------------------
Financial Measures and
Ratios (% except as
noted)
Average annual five year
total shareholder return 4.2 2.5 2.0 1.6 1.9
Diluted earnings per share
growth (c) 43.2 30.3 14.4 21.6 (10.5)
Diluted adjusted earnings
per share growth (a) (c) 37.5 11.2 15.2 7.6 (4.8)
Return on equity 15.6 14.5 16.2 17.2 12.7
Adjusted return on equity
(a) 16.3 15.2 15.4 15.0 13.9
Net economic profit
($ millions) (a) 361 278 366 434 150
Net economic profit (NEP)
growth (a) (c) +100 84.5 16.2 33.4 (21.1)
Operating leverage (1.7) 4.9 (4.4) (5.4) (1.8)
Adjusted operating
leverage (a) 2.7 (4.4) (3.3) (7.6) (2.6)
Revenue growth (c) 9.3 16.8 18.8 18.7 18.1
Adjusted revenue growth
(a) (c) 6.8 8.8 14.9 8.5 13.4
Non-interest expense
growth (c) 11.0 11.9 23.2 24.1 19.9
Adjusted non-interest
expense growth (a) (c) 4.1 13.2 18.2 16.1 16.0
Efficiency ratio 64.7 64.1 63.1 62.0 63.7
Adjusted efficiency ratio
(a) 62.2 63.7 63.2 63.5 63.8
Net interest margin on
average earning assets 1.83 1.88 1.89 2.05 2.01
Adjusted net interest
margin on average earning
assets (a) 1.67 1.70 1.76 1.85 1.78
Provision for credit
losses-to-average loans
and acceptances
(annualized) 0.30 0.38 0.32 0.23 0.60
Effective tax rate 15.7 16.2 18.7 22.0 25.3
Adjusted effective tax
rate 17.9 16.9 19.5 23.7 20.7
Gross impaired loans and
acceptances-to-equity and
allowance for credit
losses 9.30 9.15 9.34 8.74 8.98
Cash and securities-to-
total assets ratio 29.4 31.3 32.0 32.2 29.5
Common equity ratio (based
on Basel II) 10.54 10.31 9.90 9.65 9.59
Basel II tier 1 capital
ratio 12.62 12.40 11.97 11.69 12.01
Basel II total capital
ratio 14.94 14.78 14.89 14.58 14.85
Credit rating (d)
DBRS AA AA AA AA AA
Fitch AA- AA- AA- AA- AA-
Moody's Aa2 Aa2 Aa2 Aa2 Aa2
Standard & Poor's A+ A+ A+ A+ A+
Twelve month total
shareholder return 5.2 0.5 (1.0) 5.7 2.4
Dividend yield 4.88 4.87 4.77 4.80 4.75
Price-to-earnings ratio
(times) 9.6 10.1 11.0 11.3 12.1
Market-to-book value
(times) 1.47 1.46 1.54 1.54 1.49
Return on average assets 0.77 0.68 0.76 0.81 0.56
----------------------------------------------------------------------------
----------------------------------------------------------------------------
For the twelve
months ended (b)
----------------------------------------------
October October
31, 2012 31, 2011
----------------------------------------------
Financial Measures and
Ratios (% except as
noted)
Average annual five year
total shareholder return 4.2 1.9
Diluted earnings per share
growth (c) 27.1 1.9
Diluted adjusted earnings
per share growth (a) (c) 17.6 6.0
Return on equity 15.9 15.1
Adjusted return on equity
(a) 15.5 16.0
Net economic profit
($ millions) (a) 1,439 941
Net economic profit (NEP)
growth (a) (c) 53.0 33.0
Operating leverage (1.4) (0.8)
Adjusted operating
leverage (a) (2.8) 0.8
Revenue growth (c) 15.7 13.9
Adjusted revenue growth
(a) (c) 9.7 12.3
Non-interest expense
growth (c) 17.1 14.7
Adjusted non-interest
expense growth (a) (c) 12.5 11.5
Efficiency ratio 63.5 62.7
Adjusted efficiency ratio
(a) 63.1 61.5
Net interest margin on
average earning assets 1.91 1.85
Adjusted net interest
margin on average earning
assets (a) 1.74 1.79
Provision for credit
losses-to-average loans
and acceptances
(annualized) 0.31 0.56
Effective tax rate 18.3 22.0
Adjusted effective tax
rate 19.5 21.7
Gross impaired loans and
acceptances-to-equity and
allowance for credit
losses 9.30 8.98
Cash and securities-to-
total assets ratio 29.4 29.5
Common equity ratio (based
on Basel II) 10.54 9.59
Basel II tier 1 capital
ratio 12.62 12.01
Basel II total capital
ratio 14.94 14.85
Credit rating (d)
DBRS AA AA
Fitch AA- AA-
Moody's Aa2 Aa2
Standard & Poor's A+ A+
Twelve month total
shareholder return 5.2 2.4
Dividend yield 4.78 4.75
Price-to-earnings ratio
(times) 9.6 12.2
Market-to-book value
(times) 1.47 1.49
Return on average assets 0.76 0.65
----------------------------------------------
----------------------------------------------
nm - not meaningful
(a) These are non-GAAP amounts or non-GAAP measures. Please see the Non-GAAP
Measures section.
(b) For the period ended, or as at, as appropriate.
(c) Amounts for periods prior to fiscal 2011 have not been restated for
IFRS. As a result, growth measures for 2011 may not be meaningful.
(d) For a discussion of the significance of these credit ratings, see the
Liquidity and Funding Risk section on pages 86 to 88 of BMO's Annual
Management's Discussion and Analysis.
Financial Review
The Financial Review commentary is as of December 4, 2012.
Unless otherwise indicated, all amounts are in Canadian dollars and
have been derived from financial statements prepared in accordance
with International Financial Reporting Standards (IFRS). References
to GAAP mean IFRS, unless indicated otherwise. The Financial Review
should be read in conjunction with the summary unaudited quarterly
consolidated financial statements for the period ended October 31,
2012, included in this document, as well as the audited
consolidated financial statements for the year ended October 31,
2012, and Management's Discussion and Analysis (MD&A) for
fiscal 2012. Note 30 to the audited financial statements contains
reconciliations and descriptions of the effects of the transition
from Canadian GAAP to IFRS on BMO's financial results. The material
that precedes this section comprises part of this Financial
Review.
The annual MD&A includes a comprehensive discussion of our
businesses, strategies and objectives, and can be accessed on our
website at www.bmo.com/investorrelations. Readers are also
encouraged to visit the site to view other quarterly financial
information.
Bank of Montreal uses a unified branding approach that links all
of the organization's member companies. Bank of Montreal, together
with its subsidiaries, is known as BMO Financial Group. As such, in
this document, the names BMO and BMO Financial Group mean Bank of
Montreal, together with its subsidiaries.
Summary Data - Reported
Increase Increase
(Unaudited) (Canadian $ in (Decrease) (Decrease)
millions, except as noted) Q4-2012 vs. Q4-2011 vs. Q3-2012
----------------------------------------------------------------------------
Net interest income 2,145 (117) (5%) (80) (4%)
Non-interest revenue 2,031 471 30% 378 23%
----------------------------------------------------------------------------
Revenue 4,176 354 9% 298 8%
----------------------------------------------------------------------------
Specific provision for credit
losses 216 (83) (28%) (13) (6%)
Collective provision for credit
losses (24) (87) (+100%) (32) (+100%)
----------------------------------------------------------------------------
Total provision for credit losses 192 (170) (47%) (45) (19%)
Non-interest expense 2,701 269 11% 217 9%
Provision for income taxes 201 (59) (23%) 14 8%
----------------------------------------------------------------------------
Net income 1,082 314 41% 112 12%
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Attributable to bank
shareholders 1,064 315 42% 113 12%
Attributable to non-controlling
interest in subsidiaries 18 (1) (5%) (1) (2%)
----------------------------------------------------------------------------
Net income 1,082 314 41% 112 12%
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Earnings per share - basic ($) 1.59 0.47 42% 0.17 12%
Earnings per share - diluted ($) 1.59 0.48 43% 0.17 12%
Return on equity 15.6% 2.9% 1.1%
Efficiency ratio 64.7% 1.0% 0.6%
Operating leverage (1.7%) nm nm
Net interest margin on earning
assets 1.83% (0.18%) (0.05%)
Effective tax rate 15.7% (9.6%) (0.5%)
Capital Ratios Reported
Basel II Tier 1 Capital Ratio 12.6% 0.6% 0.2%
Common Equity Ratio - using a
Basel II approach 10.5% 0.9% 0.2%
Net income by operating group:
Personal and Commercial Banking 569 (25) (4%) (13) (2%)
P&C Canada 439 - - (14) (3%)
P&C U.S. 130 (25) (16%) 1 -
Private Client Group 166 29 21% 57 51%
BMO Capital Markets 293 150 +100% 61 26%
Corporate Services, including T&O 54 160 +100% 7 22%
----------------------------------------------------------------------------
BMO Financial Group net income 1,082 314 41% 112 12%
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Summary Data - Reported
Increase
(Unaudited) (Canadian $ in Fiscal- (Decrease)
millions, except as noted) 2012 vs. Fiscal-2011
-----------------------------------------------------------
Net interest income 8,808 1,334 18%
Non-interest revenue 7,322 853 13%
-----------------------------------------------------------
Revenue 16,130 2,187 16%
-----------------------------------------------------------
Specific provision for credit
losses 762 (364) (32%)
Collective provision for credit
losses 3 (83) (97%)
-----------------------------------------------------------
Total provision for credit losses 765 (447) (37%)
Non-interest expense 10,238 1,497 17%
Provision for income taxes 938 62 7%
-----------------------------------------------------------
Net income 4,189 1,075 35%
-----------------------------------------------------------
-----------------------------------------------------------
Attributable to bank
shareholders 4,115 1,074 35%
Attributable to non-controlling
interest in subsidiaries 74 1 -
-----------------------------------------------------------
Net income 4,189 1,075 35%
-----------------------------------------------------------
-----------------------------------------------------------
Earnings per share - basic ($) 6.18 1.28 26%
Earnings per share - diluted ($) 6.15 1.31 27%
Return on equity 15.9% 0.8%
Efficiency ratio 63.5% 0.8%
Operating leverage (1.4%) nm
Net interest margin on earning
assets 1.91% 0.06%
Effective tax rate 18.3% (3.7%)
Capital Ratios Reported
Basel II Tier 1 Capital Ratio 12.6% 0.6%
Common Equity Ratio - using a
Basel II approach 10.5% 0.9%
Net income by operating group:
Personal and Commercial Banking 2,301 176 8%
P&C Canada 1,784 11 1%
P&C U.S. 517 165 47%
Private Client Group 525 49 10%
BMO Capital Markets 948 46 5%
Corporate Services, including T&O 415 804 +100%
-----------------------------------------------------------
BMO Financial Group net income 4,189 1,075 35%
-----------------------------------------------------------
-----------------------------------------------------------
T&O means Technology and Operations.
nm - not meaningful
Summary Data - Adjusted (1)
Increase Increase
(Unaudited) (Canadian $ in (Decrease) (Decrease)
millions, except as noted) Q4-2012 vs. Q4-2011 vs. Q3-2012
----------------------------------------------------------------------------
Adjusted net interest income 1,956 (40) (2%) (56) (3%)
Adjusted non-interest
revenue 1,964 290 17% 299 18%
----------------------------------------------------------------------------
Adjusted revenue 3,920 250 7% 243 7%
----------------------------------------------------------------------------
Adjusted specific provision
and adjusted total
provision for credit losses 113 (168) (60%) (3) (2%)
Adjusted non-interest
expense 2,436 95 4% 94 4%
Adjusted provision for
income taxes 246 30 13% 40 20%
----------------------------------------------------------------------------
Adjusted net income 1,125 293 35% 112 11%
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Attributable to bank
shareholders 1,107 294 36% 113 11%
Attributable to non-
controlling interest in
subsidiaries 18 (1) (5%) (1) (2%)
----------------------------------------------------------------------------
Adjusted net income 1,125 293 35% 112 11%
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Adjusted earnings per share
- basic ($) 1.65 0.43 35% 0.16 11%
Adjusted earnings per share
- diluted ($) 1.65 0.45 38% 0.16 11%
Adjusted return on equity 16.3% 2.4% 1.1%
Adjusted efficiency ratio 62.2% (1.6%) (1.5%)
Adjusted operating leverage 2.7% nm nm
Adjusted net interest margin
on earning assets 1.67% (0.11%) (0.03%)
Adjusted effective tax rate 17.9% (2.8%) 1.0%
Adjusted net income by
operating group:
Personal and Commercial
Banking 587 (26) (4%) (14) (2%)
P&C Canada 441 - - (15) (3%)
P&C U.S. 146 (26) (15%) 1 -
Private Client Group 171 28 20% 56 48%
BMO Capital Markets 293 150 +100% 61 26%
Corporate Services,
including T&O 74 141 +100% 9 15%
----------------------------------------------------------------------------
BMO Financial Group adjusted
net income 1,125 293 35% 112 11%
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Summary Data - Adjusted (1)
Increase
(Unaudited) (Canadian $ in Fiscal- (Decrease)
millions, except as noted) 2012 vs. Fiscal-2011
---------------------------------------------------------
Adjusted net interest income 8,029 781 11%
Adjusted non-interest
revenue 7,038 544 8%
---------------------------------------------------------
Adjusted revenue 15,067 1,325 10%
---------------------------------------------------------
Adjusted specific provision
and adjusted total
provision for credit losses 471 (637) (57%)
Adjusted non-interest
expense 9,513 1,060 13%
Adjusted provision for
income taxes 991 85 9%
---------------------------------------------------------
Adjusted net income 4,092 817 25%
---------------------------------------------------------
---------------------------------------------------------
Attributable to bank
shareholders 4,018 816 25%
Attributable to non-
controlling interest in
subsidiaries 74 1 -
---------------------------------------------------------
Adjusted net income 4,092 817 25%
---------------------------------------------------------
---------------------------------------------------------
Adjusted earnings per share
- basic ($) 6.02 0.85 16%
Adjusted earnings per share
- diluted ($) 6.00 0.90 18%
Adjusted return on equity 15.5% (0.5%)
Adjusted efficiency ratio 63.1% 1.6%
Adjusted operating leverage (2.8%) nm
Adjusted net interest margin
on earning assets 1.74% (0.05%)
Adjusted effective tax rate 19.5% (2.2%)
Adjusted net income by
operating group:
Personal and Commercial
Banking 2,375 207 9%
P&C Canada 1,794 13 1%
P&C U.S. 581 194 50%
Private Client Group 546 60 12%
BMO Capital Markets 949 47 5%
Corporate Services,
including T&O 222 503 +100%
---------------------------------------------------------
BMO Financial Group adjusted
net income 4,092 817 25%
---------------------------------------------------------
---------------------------------------------------------
(1) The above results and statistics are presented on an adjusted basis.
These are non-GAAP amounts or non-GAAP measures. Please see the Non-
GAAP Measures section.
nm - not meaningful
Management's Responsibility for Financial Information
Bank of Montreal's Audit and Conduct Review Committee reviewed
this document, including the summary unaudited quarterly
consolidated financial statements, and Bank of Montreal's Board of
Directors approved the document prior to its release.
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
Exchange Commission, or in other communications. All such
statements are made pursuant to the "safe harbor" provisions of,
and are intended to be forward-looking statements under, the United
States Private Securities Litigation Reform Act of 1995 and any
applicable Canadian securities legislation. Forward-looking
statements may involve, but are not limited to, comments with
respect to our objectives and priorities for 2013 and beyond, our
strategies or future actions, our targets, expectations for our
financial condition or share price, and the results of or outlook
for our operations or for the Canadian and U.S. economies.
By their nature, forward-looking statements require us to make
assumptions and are subject to inherent risks and uncertainties.
There is significant risk that predictions, forecasts, conclusions
or projections will not prove to be accurate, that our assumptions
may not be correct and that actual results may differ materially
from such predictions, forecasts, conclusions or projections. We
caution readers of this document not to place undue reliance on our
forward-looking statements as a number of factors could cause
actual future results, conditions, actions or events to differ
materially from the targets, expectations, estimates or intentions
expressed in the forward-looking statements.
The future outcomes that relate to forward-looking statements
may be influenced by many factors, including but not limited to:
general economic and market conditions in the countries in which we
operate; weak, volatile or illiquid capital and/or credit markets;
interest rate and currency value fluctuations; changes in monetary,
fiscal or economic policy; the degree of competition in the
geographic and business areas in which we operate; changes in laws
or in supervisory expectations or requirements, including capital,
interest rate and liquidity requirements and guidance; judicial or
regulatory proceedings; the accuracy and completeness of the
information we obtain with respect to our customers and
counterparties; our ability to execute our strategic plans and to
complete and integrate acquisitions; critical accounting estimates
and the effect of changes to accounting standards, rules and
interpretations on these estimates; operational and infrastructure
risks; changes to our credit ratings; general political conditions;
global capital markets activities; the possible effects on our
business of war or terrorist activities; disease or illness that
affects local, national or international economies; natural
disasters and disruptions to public infrastructure, such as
transportation, communications, power or water supply;
technological changes; and our ability to anticipate and
effectively manage risks associated with all of the foregoing
factors.
We caution that the foregoing list is not exhaustive of all
possible factors. Other factors could adversely affect our results.
For more information, please see the discussion on pages 28 and 29
of BMO's 2012 annual MD&A, which outlines in detail certain key
factors that may affect Bank of Montreal's future results. When
relying on forward-looking statements to make decisions with
respect to Bank of Montreal, investors and others should carefully
consider these factors, as well as other uncertainties and
potential events, and the inherent uncertainty of forward-looking
statements. Bank of Montreal does not undertake to update any
forward-looking statements, whether written or oral, that may be
made from time to time by the organization or on its behalf, except
as required by law. The forward-looking information contained in
this document is presented for the purpose of assisting our
shareholders in understanding our financial position as at and for
the periods ended on the dates presented, as well as our strategic
priorities and objectives, and may not be appropriate for other
purposes.
In calculating the pro-forma impact of Basel III on our
regulatory capital, risk-weighted assets (including Counterparty
Credit Risk and Market Risk) and regulatory capital ratios, we have
assumed that our interpretation of the proposed rules and
amendments announced by the Basel Committee on Banking Supervision
(BCBS) as of this date, and our models used to assess those
requirements, are consistent with the final requirements that will
be promulgated by the Office of the Superintendent of Financial
Institutions Canada (OSFI). We have also assumed that the proposed
changes affecting capital deductions, risk-weighted assets, the
regulatory capital treatment for non-common share capital
instruments (i.e. grandfathered capital instruments) and the
minimum regulatory capital ratios will be adopted by OSFI as
proposed by BCBS, unless OSFI has expressly advised otherwise. We
have also assumed that existing capital instruments that are
non-Basel III compliant but are Basel II compliant can be fully
included in the October 31, 2012, pro-forma calculations. The full
impact of the Basel III proposals has been quantified based on our
financial and risk positions at year end or as close to year end as
was practical. In setting out the expectation that we will be able
to refinance certain capital instruments in the future, as and when
necessary to meet regulatory capital requirements, we have assumed
that factors beyond our control, including the state of the
economic and capital markets environment, will not impair our
ability to do so.
Assumptions about the performance of the Canadian and U.S.
economies, as well as overall market conditions and their combined
effect on our business, are material factors we consider when
determining our strategic priorities, objectives and expectations
for our business. In determining our expectations for economic
growth, both broadly and in the financial services sector, we
primarily consider historical economic data provided by the
Canadian and U.S. governments and their agencies. See the Economic
Developments section on page 30 of BMO's 2012 annual MD&A.
Among the material factors that we considered when establishing our
expectation of net interest margin changes in 2013 in the P&C
Canada business, were assumptions about growth in and mix of loans
and deposits, stable competitive pressures and an interest rate and
economic environment as described on page 48 of BMO's 2012 annual
MD&A.
Regulatory Filings
Our continuous disclosure materials, including our interim
filings, annual MD&A and audited consolidated financial
statements, Annual Information Form and Notice of Annual Meeting of
Shareholders and Proxy Circular are available on our website at
www.bmo.com/investorrelations, on the Canadian Securities
Administrators' website at www.sedar.com and on the EDGAR section
of the SEC's website at www.sec.gov.
Foreign Exchange
The Canadian dollar equivalents of BMO's U.S.-dollar-denominated
net income, revenues, expenses, provisions for credit losses and
income taxes were decreased relative to the fourth quarter of 2011
and third quarter of 2012 by the weakening of the U.S. dollar. The
average Canadian/U.S. dollar exchange rate for the quarter,
expressed in terms of the Canadian dollar cost of a U.S. dollar,
decreased by 1.8% from a year ago and by 2.8% from the average of
the third quarter. The following table indicates the relevant
average Canadian/U.S. dollar exchange rates and the impact of
changes in the rates. The effect of currency fluctuations on our
investments in foreign operations is discussed in the Income Taxes
section.
Effects of U.S. Dollar Exchange Rate Fluctuations on BMO's Results
Q4-2012
(Canadian $ in millions, except as noted) vs. Q4-2011 vs. Q3-2012
----------------------------------------------------------------------------
Canadian/U.S. dollar exchange rate
(average)
Current period 0.9894 0.9894
Prior period 1.0077 1.0180
Effects on reported results
Increased (decreased) net interest income (16) (24)
Increased (decreased) non-interest revenue (12) (19)
----------------------------------------------------------------------------
Increased (decreased) revenues (28) (43)
Decreased (increased) expenses 18 29
Decreased (increased) provision for credit
losses 2 3
Decreased (increased) income taxes 2 2
----------------------------------------------------------------------------
Increased (decreased) net income (6) (9)
----------------------------------------------------------------------------
Effects on adjusted results
Increased (decreased) net interest income (12) (19)
Increased (decreased) non-interest
revenues (12) (19)
----------------------------------------------------------------------------
Increased (decreased) revenues (24) (38)
Decreased (increased) expenses 15 23
Decreased (increased) provision for credit
losses (1) -
Decreased (increased) income taxes 2 3
----------------------------------------------------------------------------
Increased (decreased) adjusted net income (8) (12)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Adjusted results in this section are non-GAAP amounts or non-GAAP measures.
Please see the Non-GAAP Measures section.
Net Income
Q4 2012 vs Q4 2011
Net income was $1,082 million for the fourth quarter of 2012, up
$314 million or 41% from a year ago. Earnings per share were $1.59,
up 43% from $1.11 a year ago.
Adjusted net income was $1,125 million, up $293 million or 35%
from a year ago. Adjusted earnings per share were $1.65, up 38%
from $1.20 a year ago. Adjusted results and items excluded in
determining adjusted results are disclosed in more detail in the
preceding Adjusted Net Income section and in the Non-GAAP Measures
section, together with comments on the uses and limitations of such
measures.
There was good revenue growth and controlled expense growth,
resulting in adjusted operating leverage of 2.7%. Adjusted
provisions for credit losses were lower than in 2011 and there was
a lower effective tax rate. BMO Capital Markets adjusted net income
was significantly higher than a year ago as the market environment
improved. PCG results were also higher, due to improvements in its
insurance operations. P&C Canada's results on an expected loss
basis were unchanged from a year ago as the effects of higher
volumes across most products were offset by reduced net interest
margin. Its net income increased on an actual loss basis. P&C
U.S. results decreased from strong results a year ago due to lower
revenue, due primarily to a reduction in certain loan portfolios
and regulatory changes that lowered interchange fees. Corporate
Services adjusted net income was higher, due primarily to a
recovery of provisions for credit losses on the M&I purchased
credit impaired loan portfolio and lower provisions charged to
Corporate under BMO's expected loss provisioning methodology.
Q4 2012 vs Q3 2012
Net income increased $112 million or 12% from the third quarter
and earnings per share increased $0.16 or 12%. Adjusted net income
increased $112 million or 11% and adjusted earnings per share
increased $0.16 or 11%.
As with the year-over-year improvement, increased adjusted net
income reflected good revenue growth and controlled expense growth,
resulting in adjusted operating leverage of 2.6% from the third
quarter. On an adjusted basis, there was increased net income in
all groups except P&C Canada. There was strong growth in PCG
and BMO Capital Markets and a more modest increase in P&C U.S.
on a U.S. dollar basis. P&C Canada earnings were down due to
lower net interest margin and higher initiative spending while
Corporate Services adjusted net income was modestly higher.
Revenue
Total revenue increased $354 million or 9.3% from the fourth
quarter a year ago to $4,176 million. Adjusted revenue increased
$250 million or 6.8% to $3,920 million in the fourth quarter of
2012. There was strong growth in BMO Capital Markets in the
improved trading environment and in PCG due to better insurance
results. P&C Canada revenues were relatively unchanged as
higher volumes across most products were offset by the effects of
reduced net interest margin. P&C U.S. revenues decreased due
primarily to a reduction in certain loan portfolios and regulatory
changes that lowered interchange fees. The weaker U.S. dollar
decreased adjusted revenue growth by $24 million or 0.7%.
Revenue increased $298 million or 7.7% from the third quarter.
Adjusted revenue increased $243 million or 6.7%. There was strong
growth in BMO Capital Markets and insurance revenue in PCG.
Revenues were relatively unchanged in P&C Canada and were lower
in P&C U.S., but increased on a U.S. dollar basis. Adjusted
revenues in Corporate Services were higher. The weaker U.S. dollar
decreased adjusted revenue growth by $38 million or 1.0%.
Changes in net interest income and non-interest revenue are
reviewed in the sections that follow.
This section contains adjusted results and measures which are
non-GAAP. Please see the Non-GAAP Measures section.
Net Interest Income
Net interest income decreased $117 million or 5.2% from a year
ago to $2,145 million in the fourth quarter of 2012. Reported net
interest income includes amounts for the recognition of a portion
of the credit mark on the M&I purchased performing loan
portfolio. Adjusted net interest income decreased $40 million or
2.0% to $1,956 million. On an adjusted basis, there were reductions
in P&C Canada and P&C U.S. with increases in each of PCG,
BMO Capital Markets and, Corporate Services.
BMO's overall net interest margin decreased by 18 basis points
year over year to 1.83%. Adjusted net interest margin decreased by
11 basis points to 1.67% with decreases in each of the operating
groups. The decrease in P&C Canada was primarily driven by
deposit spread compression in a low rate environment and changes in
mix, including loan growth exceeding deposit growth. The decline in
P&C U.S. was mainly due to deposit spread compression in a low
rate environment, as well as a decline in loan spreads due to
competitive pressures, partly offset by deposit growth exceeding
loan growth. The reduction in PCG was mainly due to growth in
insurance assets, which have no impact on net interest income, and
lower loan spreads. BMO Capital Markets net interest margin
reduction was modest. Corporate Services adjusted net interest
income increased year over year and modestly reduced BMO's overall
margin decline.
Average earning assets in the fourth quarter of 2012 increased
$20.2 billion or 4.5% relative to a year ago. There was strong
growth in BMO Capital Markets due to increased holdings of
securities, resulting from improved investment opportunities, and
higher deposits at the Federal Reserve. There was also strong
growth in P&C Canada, driven by volume growth across most
products, and in Private Client Group, which benefited from
personal loan growth in private banking and higher insurance
assets. In P&C U.S., strong commercial loan growth was more
than offset by a reduction in certain loan portfolios, decreases in
our personal loan balances due in part to the current economic
environment and the effects of our continued practice of selling
most mortgage originations in the secondary market.
Relative to the third quarter, net interest income decreased $80
million or 3.6%. Adjusted net interest income decreased $56 million
or 2.7%. The more significant decrease was in BMO Capital Markets
due to lower assets and reduced margin. There were more modest
decreases in P&C Canada, P&C U.S. and in PCG, with an
increase in Corporate Services.
BMO's overall net interest margin decreased 5 basis points from
the third quarter. Adjusted net interest margin decreased 3 basis
points. BMO's overall margin decrease was relatively small as
decreases in the P&C businesses were offset by a positive
contribution from Corporate Services reflecting a decline in lower
yielding earning assets. P&C Canada's net interest margin
decreased due to deposit spread compression in a low rate
environment and changes in mix, including loan growth exceeding
deposit growth. Lower net interest margin in P&C U.S. was
mainly due to the effects of deposit spread compression in a low
rate environment, as well as a decline in loan spreads due to
competitive pressures. The margin decrease in Private Client Group
was mainly due to deposit spread compression in private banking,
and the decrease in BMO Capital Markets was due to lower spreads
and lower net interest income due to a charge on the termination of
a contract in the U.S. business.
Average earning assets decreased $5.4 billion or 1.2% from the
third quarter, including a $0.7 billion decrease as a result of the
weaker U.S. dollar. Good growth in P&C Canada and PCG was
offset by reductions in the other operating groups.
Adjusted results in this section are non-GAAP amounts or
non-GAAP measures. Please see the Non-GAAP Measures section.
Adjusted Net Interest Margin on Earning Assets (teb)(i)
Increase
Increase Increase (Decrease)
(Decrease) (Decrease) Fiscal- vs. Fiscal-
(In basis points) Q4-2012 vs. Q4-2011 vs. Q3-2012 2012 2011
----------------------------------------------------------------------------
P&C Canada 267 (21) (7) 278 (15)
P&C U.S. 426 (26) (12) 436 (9)
----------------------------------------------------------------------------
Personal and
Commercial Client
Group 308 (25) (8) 319 (4)
Private Client Group 281 (10) (8) 311 11
BMO Capital Markets 55 (3) (8) 61 (11)
Corporate Services,
including T&O(ii) nm nm nm nm nm
----------------------------------------------------------------------------
Total BMO adjusted
net interest margin
(1) 167 (11) (3) 174 (5)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Total BMO reported
net interest margin 183 (18) (5) 191 6
----------------------------------------------------------------------------
Total Canadian Retail
(reported and
adjusted)(iii) 266 (22) (7) 277 (17)
----------------------------------------------------------------------------
(i) Net interest margin is disclosed and computed with reference to
average earning assets, rather than total assets. This basis provides
a more relevant measure of margins and changes in margins. Operating
group margins are stated on a taxable equivalent basis (teb) while
total BMO margin is stated on a GAAP basis.
(ii) Corporate Services adjusted net interest income is negative in all
periods and its variability affects changes in net interest margin.
(iii) Total Canadian retail margin represents the net interest margin of
the combined Canadian business of P&C Canada and Private Client
Group.
(1) These are non-GAAP amounts or non-GAAP measures. Please see the Non-
GAAP Measures section.
nm - not meaningful
Non-Interest Revenue
Non-interest revenue increased $471 million or 30% from the
fourth quarter a year ago to $2,031 million. Adjusted non-interest
revenue increased $290 million or 17% to $1,964 million. There was
strong growth in trading revenues as the market environment
improved from the prior year. Underwriting fees also improved.
Foreign exchange revenues increased and insurance revenues were
higher, mainly as a result of the benefits from changes to our
investment portfolio to improve asset-liability management and the
annual review of actuarial assumptions. The impact of lower
interest rates reduced insurance non-interest revenue by less than
the reduction of a year ago.
Relative to the third quarter, non-interest revenue increased
$378 million or 23%. Adjusted non-interest revenue increased $299
million or 18%. There was a significant increase in trading
revenues and in insurance revenues, for the reasons discussed
above. Lower interest rates reduced insurance revenue by $61
million in the third quarter. Securities gains normalized from the
low levels in the third quarter and underwriting and advisory fees
decreased modestly.
Non-interest revenue is detailed in the attached summary
unaudited quarterly consolidated financial statements.
Adjusted results in this section are non-GAAP amounts or
non-GAAP measures. Please see the Non-GAAP Measures section.
Non-Interest Expense
Non-interest expense increased $269 million or 11% from the
fourth quarter a year ago to $2,701 million. Adjusted non-interest
expense increased $95 million or 4.1% to $2,436 million due to
higher revenue-driven costs and spending on strategic initiatives.
There were also higher technology related costs. The weaker U.S.
dollar decreased adjusted expense growth by $15 million or 0.6%.
Our increased focus on productivity has contributed to relatively
low expense growth through the year.
Relative to the third quarter, non-interest expense increased
$217 million or 8.7%. Adjusted non-interest expense increased $94
million or 4.0%, due to higher revenue-driven costs and increased
initiative and technology investment spending. The weaker U.S.
dollar decreased adjusted expense growth by $23 million or 1.0%.
There was strong quarter-over-quarter adjusted operating leverage
of 2.6%.
Non-interest expense is detailed in the attached summary
unaudited quarterly consolidated financial statements.
Adjusted results in this section are non-GAAP amounts or
non-GAAP measures. Please see the Non-GAAP Measures section.
Risk Management
In the fourth quarter of 2012, the provision for credit losses
was $192 million and the adjusted provision for credit losses was
$113 million. Adjusting items included a $103 million specific
provision on the M&I purchased performing loan portfolio, a $25
million increase in the collective allowance for the M&I
purchased performing loan portfolio and a $49 million reduction in
the collective allowance on other loan portfolios. The reduction
related to our other loan portfolios reflects an improving trend in
the credit quality and the economic environment, particularly for
our U.S. portfolio.
The adjusted provision for credit losses of $113 million
represents an annualized 20 basis points of average net loans and
acceptances, compared with $116 million or an annualized 21 basis
points in the third quarter of 2012 and $281 million or an
annualized 53 basis points in the fourth quarter of 2011. Included
in the adjusted specific provision for credit losses is a recovery
of $132 million related to the M&I purchased credit impaired
loans this quarter, compared with a $118 million recovery in the
third quarter of 2012 and $nil in the fourth quarter of 2011.
On a geographic basis, specific provisions in Canada and all
other countries (excluding the United States) were $143 million in
the fourth quarter of 2012, $138 million in the third quarter of
2012 and $180 million in the fourth quarter of 2011. Specific
provisions in the United States were $73 million in the fourth
quarter of 2012, $91 million in the third quarter of 2012 and $119
million in the fourth quarter of 2011. On an adjusted basis,
specific provisions in the United States for the comparable periods
were a $30 million recovery, a $22 million recovery and a charge of
$101 million, respectively.
Starting in the first quarter of 2012, provisions for credit
losses for the current and prior periods are reported on an IFRS
basis, and as such include provisions resulting from the
recognition of our securitized loans and certain special purpose
entities on our balance sheet. IFRS also requires that we recognize
interest income on impaired loans with a corresponding increase in
provision for credit losses.
BMO employs a methodology for segmented reporting purposes
whereby credit losses are charged to the client operating groups
quarterly, based on their share of expected credit losses. The
difference between quarterly charges based on expected losses and
required quarterly provisions based on actual losses is charged (or
credited) to Corporate Services. The second table that follows
outlines credit losses by client operating group based on actual
credit losses. The actual losses in this table, for P&C Canada
were relatively unchanged from the prior quarter. On an adjusted
basis, P&C U.S. credit quality has stabilized as actual losses
declined by $2 million to $69 million in the current quarter. There
were actual losses of $101 million in P&C U.S. related to the
M&I purchased performing loan portfolio. The potential for
losses in this portfolio was adequately provided for in the credit
mark.
On an adjusted basis, actual losses in Private Client Group and
Corporate Services increased quarter over quarter by $6 million and
$10 million, respectively. BMO Capital Markets realized credit
quality improvement quarter over quarter with increased recoveries
of previously written-off amounts.
Impaired loan formations in BMO's legacy portfolio (which
excludes the M&I purchased performing loan portfolio) totalled
$428 million in the current quarter, up from $405 million in the
third quarter of 2012 and down from $628 million a year ago.
Impaired loan formations related to the M&I purchased
performing loan portfolio were $359 million in the current quarter,
compared with $386 million in the third quarter of 2012 and $104
million a year ago.
During the quarter, US regulatory guidance on consumer loans was
issued requiring changes to impairment classification for certain
loans in our P&C U.S. portfolio. This guidance has increased
our impaired loan formations by $142 million ($67 million related
to the M&I purchased performing loan portfolio and $75 million
on the rest of the P&C U.S. portfolio). A specific provision of
$71 million was also recognized related to this change, comprised
of $38 million on the M&I purchased performing loan portfolio
and $33 million on the rest of the P&C U.S. portfolio.
Total gross impaired loans, on a basis that excludes the
purchased credit impaired loans, were $2,976 million at the end of
the current quarter, up from $2,867 million in the third quarter of
2012 and $2,685 million a year ago. At the end of the quarter,
there were $1,014 million of gross impaired loans related to the
acquired portfolios, of which $136 million is subject to a
loss-sharing agreement that expires in 2015 for commercial loans
and in 2020 for retail loans.
An active housing market in Canada with low interest rates and
high consumer debt levels could imply potential risk if there were
an economic downturn or increase in interest rates. Approximately
64% of the portfolio is insured, with an average loan-to-value
ratio of 64% (adjusted for current housing values). The remaining
36% of the portfolio is uninsured, with an average loan-to-value
ratio of 58%. BMO's Home Equity Line of Credit portfolio is
uninsured, but 95% of the exposures represent a priority claim by
BMO and there are no exposures that had a loan-to-value ratio
greater than 80% at time of origination. We remain satisfied with
our prudent and consistent lending standards throughout the credit
cycle and will continue to monitor the portfolio closely. BMO's
liquidity and funding, market and insurance risk management
practices and key measures are outlined on pages 82 to 89 of BMO's
2012 annual MD&A.
There were no significant changes to our level of liquidity and
funding risk over the quarter. We remain satisfied that our
liquidity and funding management framework provides us with a sound
liquidity position.
Total Trading and Underwriting Market Value Exposure (MVE)
remained relatively unchanged quarter over quarter. The gradual
increase through the fourth quarter was mainly due to rising
underwriting activity that subsequently subsided at the end of the
period. Exposure in the bank's available-for-sale portfolios
declined over the period mainly due to a decrease in fixed income
activity.
There were no significant changes in our structural market risk
management practices during the quarter. Structural MVE is driven
by rising interest rates and primarily reflects a lower market
value for fixed-rate loans. Structural Earnings Volatility (EV) is
driven by falling interest rates and primarily reflects the risk of
prime-based loans repricing at lower rates. Risk positions were
largely unchanged from the prior quarter.
There were no significant changes in the risk management
practices or risk levels of our insurance business during the
quarter.
This Risk Management section contains forward-looking
statements. Please see the Caution Regarding Forward-Looking
Statements.
Adjusted results in this section are non-GAAP amounts or
non-GAAP measures. Please see the Non-GAAP Measures section.
Provision for Credit Losses
----------------------------------------------------------------------------
(Canadian $ in millions, Fiscal- Fiscal-
except as noted) Q4-2012 Q3-2012 Q4-2011 2012 2011
----------------------------------------------------------------------------
New specific provisions 506 484 415 1,860 1,495
Reversals of previously
established allowances (60) (59) (45) (252) (128)
Recoveries of loans
previously written-off (230) (196) (71) (846) (241)
----------------------------------------------------------------------------
Specific provision for
credit losses 216 229 299 762 1,126
Change in collective
allowance (24) 8 63 3 86
----------------------------------------------------------------------------
Provision for credit losses
(PCL) 192 237 362 765 1,212
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Adjusted provision for
credit losses (1) 113 116 281 471 1,108
PCL as a % of average net
loans and acceptances
(annualized) 0.30% 0.38% 0.60% 0.31% 0.56%
PCL as a % of average net
loans and acceptances
excluding purchased
portfolios (annualized) (2) 0.39% 0.39% 0.52% 0.43% 0.55%
Specific PCL as a % of
average net loans and
acceptances (annualized) 0.34% 0.37% 0.50% 0.31% 0.52%
Adjusted PCL as a % of
average net loans and
acceptances (annualized)
(1) 0.20% 0.21% 0.53% 0.21% 0.54%
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) Adjusted provision for credit losses excludes provisions related to
the M&I purchased performing loan portfolio and changes to the
collective allowance.
(2) Ratio is presented excluding purchased portfolios, to provide for
better historical comparisons.
Provision for Credit Losses by Operating Group, on an Actual Loss Basis
----------------------------------------------------------------------------
(Canadian $ in millions, Fiscal- Fiscal-
except as noted) Q4-2012 Q3-2012 Q4-2011 2012 2011
----------------------------------------------------------------------------
P&C Canada 142 141 172 593 641
P&C U.S. (3) 69 71 69 251 336
Purchased credit impaired
loans (27) (70) - (236) -
----------------------------------------------------------------------------
Personal and Commercial
Banking 184 142 241 608 977
Private Client Group 10 4 2 19 8
BMO Capital Markets (5) (1) 12 - 26
Corporate Services,
including T&O (1) 29 19 26 117 97
Purchased Credit Impaired
Loans (2) (105) (48) - (273) -
----------------------------------------------------------------------------
Adjusted provision for
credit losses 113 116 281 471 1,108
----------------------------------------------------------------------------
P&C U.S. 101 99 20 263 20
Private Client Group 2 3 - 12 -
Corporate Services,
including T&O - 11 (2) 16 (2)
----------------------------------------------------------------------------
Specific provisions on
purchased performing loans 103 113 18 291 18
----------------------------------------------------------------------------
Change in collective
allowance (24) 8 63 3 86
----------------------------------------------------------------------------
Provision for credit losses 192 237 362 765 1,212
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) Corporate Services includes the actual provision for credit losses in
respect of loans transferred from P&C U.S. to Corporate Services in
Q3-2011 and the provision related to interest on impaired loans.
(2) Includes recoveries related to the M&I purchased credit impaired
loans, which are reported under Corporate Services in our financial
results.
(3) Excludes actual provision for credit losses related to the M&I
purchased performing loan portfolio. The potential for losses in this
portfolio was adequately provided for in the credit mark.
Changes in Gross Impaired Loans and Acceptances (GIL) (1)
----------------------------------------------------------------------------
(Canadian $ in millions, Fiscal- Fiscal-
except as noted) Q4-2012 Q3-2012 Q4-2011 2012 2011
----------------------------------------------------------------------------
GIL, beginning of period 2,867 2,837 2,290 2,685 2,894
Additions to impaired loans
and acceptances 787 791 732 3,101 1,992
Reductions in impaired loans
and acceptances (2) (367) (458) (124) (1,631) (1,285)
Write-offs (3) (311) (303) (213) (1,179) (916)
----------------------------------------------------------------------------
GIL, end of period (1) 2,976 2,867 2,685 2,976 2,685
----------------------------------------------------------------------------
----------------------------------------------------------------------------
GIL as a % of gross loans
and acceptances 1.16% 1.13% 1.12% 1.16% 1.12%
GIL as a % of gross loans
and acceptances excluding
purchased portfolios (4) 0.85% 0.85% 1.18% 0.85% 1.18%
GIL as a % of equity and
allowances for credit
losses 9.30% 9.15% 8.98% 9.30% 8.98%
GIL as a % of equity and
allowances for credit
losses excluding purchased
portfolios (4) 6.18% 6.24% 8.36% 6.18% 8.36%
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) GIL excludes purchased credit impaired loans.
(2) Includes impaired amounts returned to performing status, loan sales,
repayments, the impact of foreign exchange fluctuations and effects
for consumer write-offs which have not been recognized in formations.
(3) Excludes certain loans that are written-off directly and not
classified as new formations ($99 million in Q4-2012, $106 million in
Q3-2012; and $105 million in Q4-2011).
(4) Ratio is presented excluding purchased portfolios, to provide for
better historical comparisons.
This section contains adjusted results and measures which are non-GAAP.
Please see the Non-GAAP Measures section.
Total Trading and Underwriting Market Value Exposure (MVE) Summary
($ millions)(i)
----------------------------------------------------------------------------
As at As at
July October
For the quarter ended October 31, 31,
31, 2012 2012 2011
--------------------------------------------------------- ------- --------
(Pre-tax Canadian Quarter Quarter Year-
equivalent) -end Average High Low -end end
--------------------------------------------------------- ------- --------
Commodity VaR (0.6) (0.8) (0.9) (0.5) (0.6) (0.3)
Equity VaR (6.6) (6.6) (7.7) (5.6) (6.9) (5.4)
Foreign Exchange VaR (0.2) (0.3) (1.5) (0.1) (0.5) (0.9)
Interest Rate VaR (MTM) (6.9) (8.9) (13.5) (6.2) (7.8) (6.3)
Diversification 4.1 5.6 nm nm 6.1 4.2
------------------------------------------ -------- --------
Trading Market VaR (10.2) (11.0) (14.4) (8.1) (9.7) (8.7)
Trading & Underwriting
Issuer Risk (3.4) (4.6) (8.0) (2.6) (3.2) (3.6)
------------------------------------------ -------- --------
Total Trading &
Underwriting MVE (13.6) (15.6) (21.3) (10.8) (12.9) (12.3)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Interest Rate VaR (AFS) (8.2) (12.1) (15.0) (8.2) (14.9) (11.3)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(i) One-day measure using a 99% confidence interval. Losses are in
brackets and benefits are presented as positive numbers.
MTM - mark-to-market
nm - not meaningful
Total Trading Market Stressed Value at Risk (VaR) Summary
($ millions)(i)
----------------------------------------------------------------------------
As at As at
July October
(Pre-tax Canadian For the quarter ended October 31, 31,
equivalent) 31, 2012 2012 2011
Quarter Quarter Year-
-end Average High Low -end end
---------------------------------------------------------- -------- --------
Commodity Stressed VaR (1.4) (1.3) (1.8) (0.9) (0.8) (0.3)
Equity Stressed VaR (11.1) (9.8) (11.7) (8.1) (13.2) (6.4)
Foreign Exchange Stressed
VaR (0.2) (0.4) (1.7) (0.1) (0.7) (1.2)
Interest Rate Stressed VaR
(Mark-to-Market) (10.4) (11.6) (14.8) (9.5) (13.0) (13.2)
Diversification 9.0 9.4 nm nm 9.3 6.7
------------------------------------------ -------------------
Trading Market Stressed
VaR (14.1) (13.7) (16.8) (11.0) (18.4) (14.4)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(i) One-day measure using a 99% confidence interval. Losses are in
brackets and benefits are presented as positive numbers.
nm - not meaningful
Structural Balance Sheet Market Value Exposure and Earnings Volatility
($ millions)(i)
----------------------------------------------------------------------------
October July October
(Canadian equivalent) 31, 2012 31, 2012 31, 2011
----------------------------------------------------------------------------
Market value exposure (MVE) (pre-tax) (590.6) (608.9) (685.9)
12-month earnings volatility (EV) (after-
tax) (74.0) (80.4) (95.0)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(i) Losses are in brackets. Measured at a 99% confidence interval.
Structural Balance Sheet Earnings and Value Sensitivity to Changes in
Interest Rates ($ millions)(i) (ii)
----------------------------------------------------------------------------
Economic value sensitivity Earnings sensitivity over the
(Pre-tax) next 12 months (After-tax)
----------------------------------------------------------------------------
(Canadian October July October October July October
equivalent) 31, 2012 31, 2012 31, 2011 31, 2012 31, 2012 31, 2011
--------------------------------------------- ------------------------------
100 basis point
increase (537.6) (538.9) (614.3) 20.1 16.5 24.8
100 basis point
decrease 402.9 402.5 441.8 (74.6) (79.7) (102.5)
200 basis point
increase (1,223.1) (1,242.9) (1,295.7) 27.2 24.2 69.3
200 basis point
decrease 783.6 806.7 829.4 (75.1) (74.9) (63.3)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(i) Losses are in brackets and benefits are presented as positive numbers.
(ii) For BMO's insurance businesses, a 100 basis point increase in interest
rates at October 31, 2012, results in an increase in earnings after
tax of $94 million and an increase in before tax economic value of
$560 million ($101 million and $646 million, respectively, at July 31,
2012; and $88 million and $436 million, respectively, at October 31,
2011).A 100 basis point decrease in interest rates at October 31,
2012, results in a decrease in earnings after tax of $74 million and a
decrease in before tax economic value of $634 million ($89 million and
$742 million, respectively, at July 31, 2012; and $82 million and $494
million, respectively, at October 31, 2011).These impacts are not
reflected in the table above.
Income Taxes
As explained in the Review of Operating Groups' Performance
section, management assesses BMO's consolidated results and
associated provisions for income taxes on a GAAP basis. We assess
the performance of the operating groups and associated income taxes
on a taxable equivalent basis and report accordingly.
The provision for income taxes of $201 million decreased $59
million from the fourth quarter of 2011 and increased $14 million
from the third quarter of 2012. The effective tax rate for the
quarter was 15.7%, compared with 25.3% in the fourth quarter of
2011 and 16.2% in the third quarter of 2012. The lower effective
rate in the current quarter relative to the fourth quarter of 2011
was in part due to the run-off structured credit activities.
The adjusted provision for income taxes of $246 million
increased $30 million from a year ago and $40 million from the
third quarter. The adjusted effective tax rate was 17.9% in the
current quarter, compared with 20.7% in the fourth quarter of 2011
and 16.9% in the third quarter of 2012. The lower effective rate in
the current quarter relative to the fourth quarter of 2011 was
primarily due to higher recoveries of prior periods' income taxes.
The adjusted effective tax rate is computed using adjusted net
income rather than net income in the determination of income
subject to tax.
Adjusted results in this section are non-GAAP amounts or
non-GAAP measures. Please see the Non-GAAP Measures section.
Capital Management
BMO's capital ratios are strong: the pro-forma Basel III Common
Equity ratio is 8.7% and the Basel II Tier 1 Capital ratio is
12.6%. Both ratios are well in excess of regulatory minimums.
Q4-2012 Regulatory Capital Review
BMO remains well capitalized at October 31, 2012, with a Basel
II Tier 1 Capital Ratio of 12.6%. Tier 1 capital was $26 billion,
risk-weighted assets (RWA) were $205 billion and adjusted common
shareholders' equity was $22 billion. At July 31, 2012, the Tier 1
Ratio was 12.4%. Tier 1 capital increased $0.5 billion from July
31, 2012, primarily due to higher retained earnings, the issuance
of common shares through the Shareholder Dividend Reinvestment and
Share Purchase Plan, the exercise of stock options and lower Tier 1
capital deductions, partly offset by adjustments to retained
earnings as part of the transition to IFRS, which is phased in over
the five quarters ending January 2013. RWA was unchanged from July
31, 2012. The Tier 1 capital ratio increased 22 basis points from
12.4% at July 31, 2012. Total capital increased $0.4 billion due to
growth in Adjusted Tier 1 capital as noted above, partly offset by
higher Tier 2 capital deductions. BMO's Basel II Total Capital
Ratio was 14.9% at October 31, 2012.
Pending Basel III Regulatory Capital Changes
Effective the first quarter of 2013, regulatory capital
requirements for the consolidated entity will be determined on a
Basel III basis. The Basel III capital rules that come into effect
in January 2013 have now been described by OSFI in drafts disclosed
for public consultation. OSFI has indicated that it expects
deposit-taking institutions to meet the fully implemented Basel III
capital requirements early in the transition period and that it
expects such institutions to have a Common Equity Ratio target of
at least 7% (4.5% minimum plus 2.5% capital conservation buffer) in
January 2013. BMO currently surpasses the fully implemented Basel
III capital expectations on a pro-forma basis.
We consider the Common Equity Ratio and the Tier 1 Capital Ratio
to be the primary capital ratios under Basel III. Based on our
analysis and assumptions and including the full phase-in of the
impacts of the adoption of IFRS, BMO's pro-forma Basel III Common
Equity Ratio and Tier 1 Capital Ratio at October 31, 2012, would be
8.7%% and 10.5%, respectively. Additional detail on BMO's Basel III
pro-forma capital ratio calculations and the impacts of changes
associated with the adoption of IFRS is available in BMO's 2012
annual MD&A.
Other Capital Developments
During the quarter, there were 3,791,000 shares issued through
the Shareholder Dividend Reinvestment and Share Purchase Plan and
the exercise of stock options.
On December 4, 2012, BMO announced that the Board of Directors
declared a quarterly dividend payable to common shareholders of
$0.72 per share, up 2 cents from a year ago and unchanged from the
preceding quarter. The dividend is payable February 26, 2013, to
shareholders of record on February 1, 2013. Common shareholders may
elect to have their cash dividends reinvested in common shares of
the bank in accordance with the bank's Shareholder Dividend
Reinvestment and Share Purchase Plan ("Plan"). Under the Plan, the
Board of Directors determines whether the common shares will be
purchased in the secondary market or issued by the bank from
treasury. At this time, the common shares purchased under the Plan
will be issued from treasury without a discount from the average
market price of the common shares (as defined in the Plan).
Qualifying Regulatory Capital
Basel II Regulatory Capital and Risk-Weighted Assets
(Canadian $ in millions) Q4-2012 Q3-2012
----------------------------------------------------------------------------
Gross common shareholders' equity 26,060 25,605
IFRS phase in not applicable to common equity 22 44
Goodwill and excess intangible assets (3,717) (3,732)
Securitization-related deductions (31) (31)
Expected loss in excess of allowance - AIRB Approach (65) (75)
Substantial investments/Investments in insurance
subsidiaries (634) (607)
Other deductions - (86)
----------------------------------------------------------------------------
Adjusted common shareholders' equity 21,635 21,118
Non-cumulative preferred shares 2,465 2,465
Innovative Tier 1 Capital Instruments 1,859 1,847
Non-controlling interest in subsidiaries 16 16
IFRS phase in only applicable to Tier 1 capital (22) (44)
Other deductions (57) -
----------------------------------------------------------------------------
Tier 1 Capital - after adjustments 25,896 25,402
----------------------------------------------------------------------------
Subordinated debt 4,351 4,386
Trust subordinated notes 800 800
Accumulated net after-tax unrealized gains on
available-for-sale equity securities 34 68
Eligible portion of collective allowance for credit
losses 318 331
----------------------------------------------------------------------------
Total Tier 2 Capital 5,503 5,585
Securitization-related deductions (31) (31)
Expected loss in excess of allowance - AIRB Approach (65) (75)
Substantial Investments/Investment in insurance
subsidiaries (634) (607)
----------------------------------------------------------------------------
Tier 2 Capital - after adjustments 4,773 4,872
----------------------------------------------------------------------------
Total Capital 30,669 30,274
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Risk-Weighted Assets
(Canadian $ in millions) Q4-2012 Q3-2012
----------------------------------------------------------------------------
Credit risk 171,955 172,050
Market risk 7,598 7,320
Operational risk 25,677 25,417
----------------------------------------------------------------------------
Total risk-weighted assets 205,230 204,787
----------------------------------------------------------------------------
----------------------------------------------------------------------------
On December 4, 2012, BMO announced its intention, subject to the
approval of OSFI and the Toronto Stock Exchange (TSX), to initiate
a normal course issuer bid for up to 15,000,000 of the bank's own
common shares. Once approvals are obtained, the share repurchase
program will permit us to purchase BMO's own common shares on the
TSX for the purpose of cancellation. The timing and amount of any
purchases under the program is subject to regulatory approvals and
to management discretion based on factors such as market
conditions.
Caution
The foregoing Capital Management sections contain
forward-looking statements. Please see the Caution Regarding
Forward-Looking Statements.
The foregoing Capital Management sections contain adjusted
results and measures, which are non-GAAP. Please see the Non-GAAP
Measures section.
Eligible Dividends Designation
For the purposes of the Income Tax Act (Canada) and any similar
provincial and territorial legislation, BMO designates all
dividends paid or deemed to be paid on both its common and
preferred shares as "eligible dividends", unless indicated
otherwise.
Review of Operating Groups' Performance
Operating Groups' Summary Income Statements and Statistics for
Q4-2012
Q4-2012
--------------------------------
(Canadian $ in millions, except as Total
noted) P&C PCG BMO CM Corp BMO
----------------------------------------------------------------------------
Net interest income (teb) (1) 1,674 131 268 72 2,145
Non-interest revenue 616 652 630 133 2,031
----------------------------------------------------------------------------
Total revenue (teb) (1) 2,290 783 898 205 4,176
Provision for credit losses 227 3 24 (62) 192
Non-interest expense 1,274 563 519 345 2,701
----------------------------------------------------------------------------
Income before income taxes 789 217 355 (78) 1,283
Income taxes (recovery) (teb) (1) 220 51 62 (132) 201
----------------------------------------------------------------------------
Reported net income Q4-2012 569 166 293 54 1,082
Reported net income Q3-2012 582 109 232 47 970
Reported net income Q4-2011 594 137 143 (106) 768
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Adjusted net income Q4-2012 587 171 293 74 1,125
Adjusted net income Q3-2012 601 115 232 65 1,013
Adjusted net income Q4-2011 613 143 143 (67) 832
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Other statistics
----------------------------------------------------------------------------
Net economic profit (2) 236 111 166 (152) 361
Return on equity 17.4% 29.8% 25.2% nm 15.6%
Adjusted return on equity 18.0% 30.7% 25.3% nm 16.3%
Operating leverage (1.9%) 5.5% 22.7% nm (1.7%)
Adjusted operating leverage (2.0%) 5.6% 22.7% nm 2.7%
Efficiency ratio (teb) 55.7% 71.9% 57.8% nm 64.7%
Adjusted efficiency ratio (teb) 54.6% 71.0% 57.7% nm 62.2%
Net interest margin on earning
assets (teb) 3.08% 2.81% 0.55% nm 1.83%
Adjusted net interest margin (teb) 3.08% 2.81% 0.55% nm 1.67%
Average common equity 12,538 2,184 4,474 7,071 26,267
Average earning assets ($ billions) 216.5 18.5 195.8 34.8 465.7
Full-time equivalent staff 23,900 6,347 2,283 13,742 46,272
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Fiscal-2012
----------------------------------------
(Canadian $ in millions, except as Total
noted) P&C PCG BMO CM Corp BMO
----------------------------------------------------------------------------
Net interest income (teb) (1) 6,775 555 1,180 298 8,808
Non-interest revenue 2,414 2,344 2,085 479 7,322
----------------------------------------------------------------------------
Total revenue (teb) (1) 9,189 2,899 3,265 777 16,130
Provision for credit losses 903 14 97 (249) 765
Non-interest expense 5,097 2,217 1,953 971 10,238
----------------------------------------------------------------------------
Income before income taxes 3,189 668 1,215 55 5,127
Income taxes (recovery) (teb) (1) 888 143 267 (360) 938
----------------------------------------------------------------------------
Reported net income Q4-2012 2,301 525 948 415 4,189
Reported net income Q3-2012
Reported net income Q4-2011 2,125 476 902 (389) 3,114
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Adjusted net income Q4-2012 2,375 546 949 222 4,092
Adjusted net income Q3-2012
Adjusted net income Q4-2011 2,168 486 902 (281) 3,275
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Other statistics
----------------------------------------------------------------------------
Net economic profit (2) 971 313 436 (281) 1,439
Return on equity 17.6% 24.1% 20.1% nm 15.9%
Adjusted return on equity 18.2% 25.1% 20.2% nm 15.5%
Operating leverage (3.5%) (1.2%) (4.2%) nm (1.4%)
Adjusted operating leverage (2.6%) (0.5%) (4.2%) nm (2.8%)
Efficiency ratio (teb) 55.5% 76.5% 59.8% nm 63.5%
Adjusted efficiency ratio (teb) 54.3% 75.5% 59.8% nm 63.1%
Net interest margin on earning
assets (teb) 3.19% 3.11% 0.61% nm 1.91%
Adjusted net interest margin (teb) 3.19% 3.11% 0.61% nm 1.74%
Average common equity 12,611 2,143 4,526 5,826 25,106
Average earning assets ($ billions) 212.1 17.8 193.9 36.4 460.2
Full-time equivalent staff
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) Operating group revenues, income taxes and net interest margin are
stated on a taxable equivalent basis (teb). The group teb adjustments
are offset in Corporate Services, and Total BMO revenue, income taxes
and net interest margin are stated on a GAAP basis.
(2) Net economic profit is a non-GAAP measure. Please see the Non-GAAP
Measures section.
Adjusted results in this chart are non-GAAP amounts or non-GAAP measures.
Please see the Non-GAAP Measures section.
Corp means Corporate Services including T&O.
nm - not meaningful
The following sections review the financial results of each of
our operating segments and operating groups for the fourth quarter
of 2012.
Periodically, certain business lines and units within the
business lines are transferred between client groups to more
closely align BMO's organizational structure with its strategic
priorities. Results for prior periods are restated to conform to
the current presentation.
Effective in the first quarter of 2012, Private Client Group and
P&C Canada entered into a revised agreement that changes the
way they report financial results related to retail mutual fund
sales. Prior periods have been restated.
Corporate Services is generally charged (or credited) with
differences between the periodic provisions for credit losses
charged to the client groups under our expected loss provisioning
methodology and the periodic provisions required under GAAP.
BMO analyzes revenue at the consolidated level based on GAAP
revenues reflected in the consolidated financial statements rather
than on a taxable equivalent basis (teb), which is consistent with
our Canadian peer group. Like many banks, we continue to analyze
revenue on a teb basis at the operating group level. This basis
includes an adjustment that increases GAAP revenues and the GAAP
provision for income taxes by an amount that would raise revenues
on certain tax-exempt items to a level equivalent to amounts that
would incur tax at the statutory rate. The offset to the group teb
adjustments is reflected in Corporate Services revenues and income
tax provisions. The teb adjustments for the fourth quarter of 2012
totalled $92 million, up from $51 million in the fourth quarter of
2011 and up from $66 million in the third quarter of 2012.
Personal and Commercial Banking (P&C)
Increase Increase
(Canadian $ in millions, (Decrease) (Decrease)
except as noted) Q4-2012 vs. Q4-2011 vs. Q3-2012
----------------------------------------------------------------------------
Net interest income (teb) 1,674 (75) (4%) (25) (2%)
Non-interest revenue 616 20 3% 8 1%
----------------------------------------------------------------------------
Total revenue (teb) 2,290 (55) (2%) (17) (1%)
Provision for credit losses 227 11 5% (1) (1%)
Non-interest expense 1,274 (8) - 2 -
----------------------------------------------------------------------------
Income before income taxes 789 (58) (7%) (18) (2%)
Income taxes (teb) 220 (33) (14%) (5) (3%)
----------------------------------------------------------------------------
Reported net income 569 (25) (4%) (13) (2%)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Adjusted net income 587 (26) (4%) (14) (2%)
----------------------------------------------------------------------------
Return on equity 17.4% (1.8%) (0.5%)
Adjusted return on equity 18.0% (1.9%) (0.5%)
Operating leverage (1.9%) nm nm
Adjusted operating leverage (2.0%) nm nm
Efficiency ratio (teb) 55.7% 1.0% 0.6%
Adjusted efficiency ratio
(teb) 54.6% 1.1% 0.6%
Net interest margin on
earning assets (teb) 3.08% (0.25%) (0.08%)
Average earning assets ($
billions) 216.5 8.1 4% 2.5 1%
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Increase
(Canadian $ in millions, Fiscal- (Decrease)
except as noted) 2012 vs. Fiscal-2011
----------------------------------------------------------
Net interest income (teb) 6,775 789 13%
Non-interest revenue 2,414 260 12%
----------------------------------------------------------
Total revenue (teb) 9,189 1,049 13%
Provision for credit losses 903 155 21%
Non-interest expense 5,097 717 16%
----------------------------------------------------------
Income before income taxes 3,189 177 6%
Income taxes (teb) 888 1 -
----------------------------------------------------------
Reported net income 2,301 176 8%
----------------------------------------------------------
----------------------------------------------------------
Adjusted net income 2,375 207 9%
----------------------------------------------------------
Return on equity 17.6% (5.9%)
Adjusted return on equity 18.2% (5.8%)
Operating leverage (3.5%) nm
Adjusted operating leverage (2.6%) nm
Efficiency ratio (teb) 55.5% 1.7%
Adjusted efficiency ratio
(teb) 54.3% 1.2%
Net interest margin on
earning assets (teb) 3.19% (0.04%)
Average earning assets ($
billions) 212.1 26.8 14%
----------------------------------------------------------
----------------------------------------------------------
Adjusted results in this chart are non-GAAP amounts or non-GAAP measures.
Please see the Non-GAAP Measures section.
nm - not meaningful
The Personal and Commercial Banking (P&C) operating group
represents the sum of our two retail and business banking operating
segments, Personal and Commercial Banking Canada (P&C Canada)
and Personal and Commercial Banking U.S. (P&C U.S.). These
operating segments are reviewed separately in the sections that
follow.
Personal and Commercial Banking Canada (P&C Canada)
Increase Increase
(Canadian $ in millions, (Decrease) (Decrease)
except as noted) Q4-2012 vs. Q4-2011 vs. Q3-2012
----------------------------------------------------------------------------
Net interest income (teb) 1,083 (16) (1%) (4) -
Non-interest revenue 470 11 2% 1 -
----------------------------------------------------------------------------
Total revenue (teb) 1,553 (5) - (3) -
Provision for credit losses 145 7 6% 2 1%
Non-interest expense 812 4 1% 17 2%
----------------------------------------------------------------------------
Income before income taxes 596 (16) (3%) (22) (3%)
Provision for income taxes
(teb) 157 (16) (10%) (8) (4%)
----------------------------------------------------------------------------
Reported net income 439 - - (14) (3%)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Adjusted net income 441 - - (15) (3%)
----------------------------------------------------------------------------
Personal revenue 970 - - 7 1%
Commercial revenue 583 (5) (1%) (10) (2%)
Operating leverage (1.0%) nm nm
Efficiency ratio (teb) 52.3% 0.5% 1.2%
Net interest margin on
earning assets (teb) 2.67% (0.21%) (0.07%)
Average earning assets ($
billions) 161.4 10.1 7% 3.7 2%
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Increase
(Canadian $ in millions, Fiscal- (Decrease)
except as noted) 2012 vs. Fiscal-2011
----------------------------------------------------------
Net interest income (teb) 4,342 (20) -
Non-interest revenue 1,846 40 2%
----------------------------------------------------------
Total revenue (teb) 6,188 20 -
Provision for credit losses 567 20 4%
Non-interest expense 3,196 48 2%
----------------------------------------------------------
Income before income taxes 2,425 (48) (2%)
Provision for income taxes
(teb) 641 (59) (8%)
----------------------------------------------------------
Reported net income 1,784 11 1%
----------------------------------------------------------
----------------------------------------------------------
Adjusted net income 1,794 13 1%
----------------------------------------------------------
Personal revenue 3,857 28 1%
Commercial revenue 2,331 (8) -
Operating leverage (1.3%) nm
Efficiency ratio (teb) 51.7% 0.7%
Net interest margin on
earning assets (teb) 2.78% (0.15%)
Average earning assets ($
billions) 156.3 7.4 5%
----------------------------------------------------------
----------------------------------------------------------
Adjusted results in this chart are non-GAAP amounts or non-GAAP measures.
Please see the Non-GAAP Measures section.
nm - not meaningful
Q4 2012 VS Q4 2011
P&C Canada net income of $439 million was unchanged from a
year ago. Reported results reflect provisions for credit losses in
BMO's operating groups on an expected loss basis. On a basis that
adjusts reported results to reflect provisions on an actual loss
basis, P&C Canada's net income was up $26 million or 6.2%.
Revenue was essentially unchanged, as the effects of increased
balances and fees across most products were offset by lower net
interest margin. Net interest margin declined 21 basis points to
2.67% primarily due to deposit spread compression in a low rate
environment and changes in mix, including loan growth exceeding
deposit growth.
In the personal banking segment, revenue was unchanged year over
year. Balance growth across most products was offset by the impact
of lower net interest margin. Total personal lending balances
(including mortgages, Homeowner ReadiLine and other consumer
lending products) increased 7.8% year over year, while total
personal lending market share was up 19 basis points from last
year.
Our goal is to grow market share while remaining attentive to
the credit quality of the portfolio. We continue to focus on
strengthening the total personal lending business through focused
investment and improved productivity in the sales force.
Personal deposit balances increased 3.5% year over year due to
an increase in retail operating deposits. Market share for personal
deposits decreased 47 basis points year over year due to slow
growth in term deposits.
In the commercial banking segment, revenue was down a modest $5
million as the effects of higher balances and fees across most
products were more than offset by lower net interest margin.
Commercial loan balances increased 8.1% year over year, and
commercial deposit balances grew 6.2%. We continue to rank second
in Canadian business banking market share of small and mid-sized
business loans.
Non-interest expense increased marginally, rising $4 million or
0.7% from the prior year as the impact of higher initiative
spending and advertising costs was mitigated by continued cost
management actions.
Average current loans and acceptances increased $11.2 billion or
7.3% from a year ago, and personal and commercial deposits grew
$4.6 billion or 4.4%.
Q4 2012 vs Q3 2012
Net income decreased $14 million or 3.2% from the third quarter.
On a basis that adjusts reported results to reflect provisions on
an actual loss basis, net income was down $13 million or 2.9% from
the third quarter.
Revenue fell $3 million as the effects of higher balances across
most products were offset by lower net interest margin. Net
interest margin decreased 7 basis points due to deposit spread
compression in a low rate environment and changes in mix, including
loan growth exceeding deposit growth. The rate of net interest
margin decline is expected to moderate in 2013.
Personal revenue increased $7 million quarter over quarter due
to balance and fee growth, partially offset by lower net interest
margin. Quarter-over-quarter personal lending market share was up
10 basis points and personal deposits market share was down 7 basis
points.
Commercial revenue was $10 million lower than in the prior
quarter due to reduced net interest margin, partially offset by
balance growth.
Non-interest expense was $17 million or 2.2% higher primarily
due to initiative spending, with increased costs for our
distribution network, including ABMs. We continue to prudently
manage expenses while still investing in the business.
Average current loans and acceptances increased $4.0 billion or
2.5% from last quarter, while personal and commercial deposits
increased $1.9 billion or 1.7%.
Personal and Commercial Banking U.S. (P&C U.S.)
Increase Increase
(Canadian $ in millions, (Decrease) (Decrease)
except as noted) Q4-2012 vs. Q4-2011 vs. Q3-2012
----------------------------------------------------------------------------
Net interest income (teb) 591 (59) (9%) (21) (4%)
Non-interest revenue 146 9 6% 7 4%
----------------------------------------------------------------------------
Total revenue (teb) 737 (50) (7%) (14) (2%)
Provision for credit losses 82 4 4% (3) (4%)
Non-interest expense 462 (12) (2%) (15) (3%)
----------------------------------------------------------------------------
Income before income taxes 193 (42) (18%) 4 -
Provision for income taxes
(teb) 63 (17) (23%) 3 -
----------------------------------------------------------------------------
Reported net income 130 (25) (16%) 1 -
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Adjusted net income 146 (26) (15%) 1 -
----------------------------------------------------------------------------
Operating leverage (3.9%) nm nm
Adjusted operating leverage (4.3%) nm nm
Efficiency ratio (teb) 62.8% 2.5% (0.5%)
Adjusted efficiency ratio
(teb) 59.7% 2.6% (0.5%)
Net interest margin on
earning assets (teb) 4.26% (0.26%) (0.12%)
Adjusted net interest margin
on earning assets 4.26% (0.26%) (0.12%)
Average earning assets ($
billions) 55.1 (2.0) (3%) (1.1) (2%)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
U.S. Select Financial Data
(US$ in millions, except as
noted)
Net interest income (teb) 596 (49) (7%) (6) (1%)
Non-interest revenue 147 11 8% 10 7%
----------------------------------------------------------------------------
Total revenue (teb) 743 (38) (5%) 4 1%
Non-interest expense 467 (5) (1%) (1) -
Reported net Income 132 (21) (14%) 5 3%
Adjusted net income 147 (24) (13%) 4 3%
Average earning assets (US$
billions) 55.7 (0.9) (2%) 0.5 1%
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Increase
(Canadian $ in millions, Fiscal- (Decrease)
except as noted) 2012 vs. Fiscal-2011
----------------------------------------------------------
Net interest income (teb) 2,433 809 50%
Non-interest revenue 568 220 63%
----------------------------------------------------------
Total revenue (teb) 3,001 1,029 52%
Provision for credit losses 336 135 67%
Non-interest expense 1,901 669 54%
----------------------------------------------------------
Income before income taxes 764 225 42%
Provision for income taxes
(teb) 247 60 32%
----------------------------------------------------------
Reported net income 517 165 47%
----------------------------------------------------------
----------------------------------------------------------
Adjusted net income 581 194 50%
----------------------------------------------------------
Operating leverage (2.1%) nm
Adjusted operating leverage (0.5%) nm
Efficiency ratio (teb) 63.3% 0.8%
Adjusted efficiency ratio
(teb) 60.2% 0.2%
Net interest margin on
earning assets (teb) 4.36% (0.09%)
Adjusted net interest margin
on earning assets 4.36% (0.09%)
Average earning assets ($
billions) 55.9 19.4 53%
----------------------------------------------------------
----------------------------------------------------------
U.S. Select Financial Data
(US$ in millions, except as
noted)
Net interest income (teb) 2,425 781 48%
Non-interest revenue 566 214 61%
----------------------------------------------------------
Total revenue (teb) 2,991 995 50%
Non-interest expense 1,895 647 52%
Reported net Income 516 160 45%
Adjusted net income 579 187 48%
Average earning assets (US$
billions) 55.7 18.8 51%
----------------------------------------------------------
----------------------------------------------------------
Adjusted results in this chart are non-GAAP amounts or non-GAAP measures.
Please see the Non-GAAP Measures section.
nm - not meaningful
Q4 2012 vs Q4 2011 (in U.S. $)
Net income of $132 million decreased $21 million or 14% from
$153 million in the fourth quarter a year ago. Adjusted net income
was $147 million, down $24 million or 13% from strong results a
year ago due to lower revenue, due primarily to a reduction in
certain loan portfolios and regulatory changes that lowered
interchange fees.
Revenue of $743 million decreased $38 million from a year ago
for the reasons mentioned above. A decrease in net interest margin
also contributed to the decline.
Adjusted net interest margin decreased by 26 basis points due to
deposit spread compression in a low rate environment, as well as a
decline in loan spread due to competitive pressures, partly offset
by deposit growth exceeding loan growth.
Non-interest expense of $467 million decreased $5 million.
Adjusted non-interest expense of $444 million was $1 million
lower.
Average current loans and acceptances decreased $1.7 billion
year over year to $50.2 billion. The core commercial and industrial
loan portfolio continues to grow, having now increased in four
sequential quarters, with growth of $2.6 billion or 15% from the
fourth quarter a year ago. As expected, there were declines in
certain loan portfolios and decreases in our personal loan balances
due in part to the current economic environment and the effects of
our continued practice of selling most mortgage originations in the
secondary market.
Average deposits increased $1.9 billion year over year to $59.3
billion as growth in our commercial business and in our personal
chequing and savings accounts more than offset a decline in
personal money market accounts and the impact of time deposit as
well as maturities.
Q4 2012 vs Q3 2012 (in U.S. $)
Net income increased $5 million or 3.2% from the prior quarter
and reflects a second consecutive quarter of sequential growth.
Adjusted net income increased 2.9%, primarily due to increased
revenue.
Revenue increased $4 million or 0.6%, due to higher fee revenue
on the sale of newly originated mortgages and increases in
commercial lending and deposit fees, partly offset by the effects
of deposit spread compression in a low rate environment as well as
a decline in loan spreads due to competitive pressures, which
together lowered net interest margin by 12 basis points.
Non-interest expense and adjusted non-interest expense both
decreased $1 million as effects of investments in the business were
offset by expense management.
Average current loans and acceptances were essentially unchanged
from the prior quarter as commercial banking loan growth in key
segments was offset by decreases in personal banking loans and a
reduction in certain loan portfolios, as expected. Core commercial
and industrial loans increased more than $800 million or an
annualized 17% from the third quarter, and have seen four
sequential quarters of growth post acquisition.
Average deposits increased $0.4 billion from the prior quarter
as increases in our commercial deposits outpaced decreases in money
market and time deposit maturities in the low rate environment.
Adjusted results in the foregoing P&C U.S. sections are
non-GAAP amounts or non-GAAP measures. Please see the Non-GAAP
Measures section.
Private Client Group (PCG)
Increase Increase
(Canadian $ in millions, (Decrease) (Decrease)
except as noted) Q4-2012 vs. Q4-2011 vs. Q3-2012
----------------------------------------------------------------------------
Net interest income (teb) 131 9 7% (1) -
Non-interest revenue 652 68 12% 106 19%
----------------------------------------------------------------------------
Total revenue (teb) 783 77 11% 105 16%
Provision for credit losses 3 - - (1) (25%)
Non-interest expense 563 29 5% 19 4%
----------------------------------------------------------------------------
Income before income taxes 217 48 28% 87 67%
Provision for income taxes
(teb) 51 19 58% 30 +100%
----------------------------------------------------------------------------
Reported net income 166 29 21% 57 51%
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Adjusted net income 171 28 20% 56 48%
----------------------------------------------------------------------------
Adjusted return on equity 30.7% (0.6%) 9.9%
Return on equity 29.8% (0.2%) 10.0%
Operating leverage 5.5% nm nm
Efficiency ratio (teb) 71.9% (3.8%) (8.4%)
Adjusted efficiency ratio
(teb) 71.0% (3.8%) (8.2%)
Net interest margin on
earning assets (teb) 2.81% (0.10%) (0.08%)
Average earning assets 18,528 1,903 11% 429 2%
----------------------------------------------------------------------------
----------------------------------------------------------------------------
U.S. Select Financial Data
(US$ in millions)
Total revenue (teb) 170 3 1% (1) (1%)
Non-interest expense 141 7 5% 5 3%
Reported net income 18 (2) (19%) (4) (24%)
Adjusted net income 21 (4) (16%) (5) (20%)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Increase
(Canadian $ in millions, Fiscal- (Decrease)
except as noted) 2012 vs. Fiscal-2011
----------------------------------------------------------
Net interest income (teb) 555 100 22%
Non-interest revenue 2,344 214 10%
----------------------------------------------------------
Total revenue (teb) 2,899 314 12%
Provision for credit losses 14 4 48%
Non-interest expense 2,217 261 13%
----------------------------------------------------------
Income before income taxes 668 49 8%
Provision for income taxes
(teb) 143 - -
----------------------------------------------------------
Reported net income 525 49 10%
----------------------------------------------------------
----------------------------------------------------------
Adjusted net income 546 60 12%
----------------------------------------------------------
Adjusted return on equity 25.1% (8.2%)
Return on equity 24.1% (8.5%)
Operating leverage (1.2%) nm
Efficiency ratio (teb) 76.5% 0.8%
Adjusted efficiency ratio
(teb) 75.5% 0.3%
Net interest margin on
earning assets (teb) 3.11% 0.11%
Average earning assets 17,825 2,634 17%
----------------------------------------------------------
----------------------------------------------------------
U.S. Select Financial Data
(US$ in millions)
Total revenue (teb) 697 270 63%
Non-interest expense 552 203 58%
Reported net income 89 42 85%
Adjusted net income 104 51 96%
----------------------------------------------------------
----------------------------------------------------------
Adjusted results in this chart are non-GAAP amounts or non-GAAP measures.
Please see the Non-GAAP Measures section.
nm - not meaningful
Q4 2012 vs Q4 2011
Net income was $166 million, up $29 million or 21% from a year
ago. Adjusted net income was $171 million, up $28 million or 20%
from a year ago. Adjusted net income in PCG excluding insurance was
$95 million, down $8 million or 7.1% from a year ago. These results
reflect higher revenue across most businesses, offset by higher
strategic initiative spending to drive future revenue growth.
Adjusted net income in PCG Insurance was $76 million, up $36
million or 86% from a year ago. These results benefited from
changes to our investment portfolio to improve asset-liability
management and the annual review of actuarial assumptions. Lower
interest rates reduced insurance net income in the current quarter
by less than the reduction of a year ago.
Revenue was $783 million, up $77 million or 11% from a year ago.
Revenue in PCG excluding insurance was up 3.0% from a year ago due
to growth across most businesses. Insurance revenue was up 90% from
a year ago due to the factors mentioned above. The weaker U.S.
dollar lowered revenue by $3 million or 0.5%.
Non-interest expense was $563 million, up $29 million or 5.4%.
Adjusted non-interest expense was $556 million, up $28 million or
5.3%, primarily due to higher initiative spending. We continue to
strategically invest in our businesses for future growth while
remaining focused on cost management. The weaker U.S. dollar
lowered adjusted expense by $3 million or 0.5%.
Assets under management and administration grew $40 billion to
$465 billion due to market appreciation and new client assets.
Q4 2012 vs Q3 2012
Net income increased $57 million or 51% and adjusted net income
increased $56 million or 48% from the third quarter. Adjusted net
income in PCG excluding insurance declined $2 million. Adjusted
insurance net income increased $58 million due to a less
unfavourable impact from movements in interest rates relative to
the prior quarter, changes to our investment portfolio to improve
asset-liability management, and the benefit from the annual review
of actuarial assumptions.
Revenue increased $105 million or 16%. PCG revenue excluding
insurance increased 2.3% due to growth across most businesses.
Insurance revenue more than tripled from the prior quarter mainly
due to the factors mentioned above. The weaker U.S. dollar
decreased revenue by $5 million or 0.8%.
Adjusted non-interest expense increased $19 million or 3.6% due
to higher strategic initiative spending. The weaker U.S. dollar
decreased adjusted expense by $4 million or 0.8%.
Assets under management and administration grew $20 billion due
to market appreciation and new client assets.
Adjusted results in the foregoing Private Client Group sections
are non-GAAP amounts or non-GAAP measures. Please see the Non-GAAP
Measures section.
BMO Capital Markets
Increase Increase
(Canadian $ in millions, (Decrease) (Decrease)
except as noted) Q4-2012 vs. Q4-2011 vs. Q3-2012
----------------------------------------------------------------------------
Net interest income (teb) 268 11 5% (49) (15%)
Non-interest revenue 630 194 44% 141 29%
----------------------------------------------------------------------------
Total revenue (teb) 898 205 30% 92 11%
Provision for credit losses 24 (6) (20%) (1) (1%)
Non-interest expense 519 34 7% 39 8%
----------------------------------------------------------------------------
Income before income taxes 355 177 100% 54 18%
Provision for income taxes
(teb) 62 27 82% (7) (11%)
----------------------------------------------------------------------------
Reported net income 293 150 +100% 61 26%
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Adjusted net income 293 150 +100% 61 26%
----------------------------------------------------------------------------
Trading Products revenue 584 148 34% 96 20%
Investment and Corporate
Banking revenue 314 57 22% (4) (1%)
Return on equity 25.2% 11.3% 5.9%
Operating leverage 22.7% nm nm
Efficiency ratio (teb) 57.8% (12.2%) (1.8%)
Adjusted efficiency ratio
(teb) 57.7% (12.3)% (1.9%)
Net interest margin on
earning assets (teb) 0.55% (0.03%) (0.08%)
Average earning assets ($
billions) 195.8 19.3 11% (4.9) (2%)
----------------------------------------------------------------------------
U.S. Select Financial Data
(US$ in millions, except as
noted)
Total revenue (teb) 266 33 14% (10) (4%)
Non-interest expense 220 10 5% 18 9%
Reported net income 16 9 +100% (26) (62%)
Adjusted net income 17 10 +100% (25) (61%)
Average earning assets (US$
billions) 73.1 4.1 6% (2.8) (4%)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Increase
(Canadian $ in millions, Fiscal- (Decrease)
except as noted) 2012 vs. Fiscal-2011
----------------------------------------------------------
Net interest income (teb) 1,180 (33) (3%)
Non-interest revenue 2,085 (1) -
----------------------------------------------------------
Total revenue (teb) 3,265 (34) (1%)
Provision for credit losses 97 (22) (19%)
Non-interest expense 1,953 58 3%
----------------------------------------------------------
Income before income taxes 1,215 (70) (5%)
Provision for income taxes
(teb) 267 (116) (30%)
----------------------------------------------------------
Reported net income 948 46 5%
----------------------------------------------------------
----------------------------------------------------------
Adjusted net income 949 47 5%
----------------------------------------------------------
Trading Products revenue 2,056 44 2%
Investment and Corporate
Banking revenue 1,209 (78) (6%)
Return on equity 20.1% (3.0%)
Operating leverage (4.2%) nm
Efficiency ratio (teb) 59.8% 2.4%
Adjusted efficiency ratio
(teb) 59.8% 2.4%
Net interest margin on
earning assets (teb) 0.61% (0.11%)
Average earning assets ($
billions) 193.9 26.3 16%
----------------------------------------------------------
U.S. Select Financial Data
(US$ in millions, except as
noted)
Total revenue (teb) 1,027 (1) -
Non-interest expense 827 30 4%
Reported net income 93 35 60%
Adjusted net income 94 36 62%
Average earning assets (US$
billions) 72.2 8.8 14%
----------------------------------------------------------
----------------------------------------------------------
Adjusted results in this chart are non-GAAP amounts or non-GAAP measures.
Please see the Non-GAAP Measures section.
nm - not meaningful
Q4 2012 vs Q4 2011
Net income was $293 million, an increase of $150 million as
earnings more than doubled from the previous year. This significant
improvement was driven by an increase in revenues as the market
environment improved from the prior year. There was a recovery of
prior periods' income taxes recorded in the current quarter and a
reduction in the provision for credit losses, which is charged to
BMO's operating groups on an expected loss basis. Return on equity
was 25.2% compared with 13.9% a year ago.
Revenues increased $205 million or 30% to $898 million. Trading
revenues improved significantly, primarily interest rate and equity
trading revenues, as the market environment improved relative to
the prior year. Underwriting fees also increased from the previous
year. The overall improvement was dampened by reductions in
securities commissions due to lower client activities. The weaker
U.S. dollar decreased revenue by $7 million.
Non-interest expense increased $34 million or 6.9% primarily due
to higher employee compensation costs, consistent with improved
business performance, and higher technology and support costs. The
weaker U.S. dollar decreased expense by $3 million.
Q4 2012 vs Q3 2012
Net income increased $61 million or 26% from the third quarter.
Revenue increased $92 million or 11%, due to higher trading
revenues as market conditions were improved, higher equity
underwriting fees and increased securities gains from the lower
levels of the previous quarter. Lowering the overall increase were
reductions in mergers and acquisitions revenues and debt
underwriting fees. Income taxes were lower in the current quarter
due to a recovery of prior periods' taxes.
Non-interest expense increased $39 million or 8.0% primarily due
to higher employee compensation costs, in line with the strong
business performance.
Corporate Services, Including Technology and Operations
Increase Increase
(Canadian $ in millions, (Decrease) (Decrease)
except as noted) Q4-2012 vs. Q4-2011 vs. Q3-2012
----------------------------------------------------------------------------
Net interest income before
group teb offset 164 (21) (11%) 21 14%
Group teb offset (92) (41) (82%) (26) (37%)
----------------------------------------------------------------------------
Net interest income (teb) 72 (62) (46%) (5) (6%)
Non-interest revenue 133 189 +100% 123 +100%
----------------------------------------------------------------------------
Total revenue (teb) 205 127 +100% 118 +100%
Provision for (recovery of)
credit losses (62) (175) (+100%) (42) (+100%)
Non-interest expense 345 214 +100% 157 82%
----------------------------------------------------------------------------
Profit before income taxes (78) 88 54% 3 8%
Provision for (recovery of)
income taxes (teb) (132) (72) (+100%) (4) (2%)
----------------------------------------------------------------------------
Reported net income 54 160 +100% 7 22%
----------------------------------------------------------------------------
Adjusted Results (1)
Adjusted total revenue (teb) (51) 23 31% 63 55%
Adjusted non-interest expense 114 41 56% 35 44%
Adjusted net income 74 141 +100% 9 15%
----------------------------------------------------------------------------
Corporate Services Provision
for (Recovery of) Credit
Losses
Impaired real estate loan
portfolio 1 (8) (89%) 5 +100%
Purchased credit impaired
loans (132) (132) nm (14) (12%)
Interest on impaired loans 28 11 65% 5 22%
Expected loss to actual loss
adjustment (2) (38) (44) (+100%) 3 7%
----------------------------------------------------------------------------
Provision for (recovery of)
credit losses, adjusted
basis (141) (173) (+100%) (1) (1%)
Collective provision (24) (87) (+100%) (32) (+100%)
Purchased performing loans 103 85 +100% (9) (8%)
----------------------------------------------------------------------------
Provision for (recovery of)
credit losses, reported
basis (62) (175) (+100%) (42) (+100%)
----------------------------------------------------------------------------
Average loans and acceptances 1,397 (546) (28%) (399) (22%)
Period end loans and
acceptances 1,314 (532) (29%) (246) (16%)
----------------------------------------------------------------------------
U.S. Select Financial Data
(US$ in millions)
Total revenue (teb) 174 (44) (19%) 54 46%
Provision for (recovery of)
credit losses (88) (192) (+100%) (114) (+100%)
Non-interest expense 196 122 +100% 77 67%
Provision for (recovery of)
income taxes (teb) (13) (13) (+100%) 24 61%
----------------------------------------------------------------------------
Reported net income 79 39 97% 67 +100%
Adjusted net income 95 121 +100% 54 +100%
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Increase
(Canadian $ in millions, Fiscal- (Decrease)
except as noted) 2012 vs. Fiscal-2011
----------------------------------------------------------
Net interest income before
group teb offset 564 524 +100%
Group teb offset (266) (46) (21%)
----------------------------------------------------------
Net interest income (teb) 298 478 +100%
Non-interest revenue 479 380 +100%
----------------------------------------------------------
Total revenue (teb) 777 858 +100%
Provision for (recovery of)
credit losses (249) (584) (+100%)
Non-interest expense 971 461 90%
----------------------------------------------------------
Profit before income taxes 55 981 +100%
Provision for (recovery of)
income taxes (teb) (360) 177 33%
----------------------------------------------------------
Reported net income 415 804 +100%
----------------------------------------------------------
Adjusted Results (1)
Adjusted total revenue (teb) (286) (4) (1%)
Adjusted non-interest expense 380 88 30%
Adjusted net income 222 503 +100%
----------------------------------------------------------
Corporate Services Provision
for (Recovery of) Credit
Losses
Impaired real estate loan
portfolio 19 (9) (32%)
Purchased credit impaired
loans (509) (509) nm
Interest on impaired loans 98 29 42%
Expected loss to actual loss
adjustment (2) (151) (285) (+100%)
----------------------------------------------------------
Provision for (recovery of)
credit losses, adjusted
basis (543) (774) (+100%)
Collective provision 3 (83) (97%)
Purchased performing loans 291 273 +100%
----------------------------------------------------------
Provision for (recovery of)
credit losses, reported
basis (249) (584) (+100%)
----------------------------------------------------------
Average loans and acceptances 1,847 580 46%
Period end loans and
acceptances 1,314 (532) (29%)
----------------------------------------------------------
U.S. Select Financial Data
(US$ in millions)
Total revenue (teb) 572 557 +100%
Provision for (recovery of)
credit losses (290) (537) (+100%)
Non-interest expense 538 283 +100%
Provision for (recovery of)
income taxes (teb) 19 276 +100%
----------------------------------------------------------
Reported net income 305 535 +100%
Adjusted net income 266 447 +100%
----------------------------------------------------------
----------------------------------------------------------
(1) Adjusted results in this chart are non-GAAP amounts or non-GAAP
measures. Please see the Non-GAAP Measures section.
(2) Credit losses are charged to operating groups on an expected loss
basis. The difference between provisions charge to the operating
groups on an expected loss basis and the actual provision for credit
losses is charged to Corporate Services.
nm - not meaningful
Corporate Services
Corporate Services consists of Corporate Units and Technology
and Operations.
Corporate Units provides enterprise-wide expertise and
governance support in a variety of areas, including strategic
planning, risk management, finance, legal and compliance,
marketing, communications and human resources.
Technology and Operations (T&O) manages, maintains and
provides governance over information technology, operations
services, real estate and sourcing for BMO Financial Group.
The costs of Corporate Units and T&O services are
transferred to the three client operating groups (P&C, PCG and
BMO Capital Markets), and only minor amounts are retained in
Corporate Services results. As such, Corporate Services adjusted
operating results reflect the impact of certain asset-liability
management activities, the elimination of taxable equivalent
adjustments, the results from certain impaired asset portfolios,
recovery of provisions for credit losses on the M&I purchased
credit impaired loan portfolio and the application of our expected
loss provisioning methodology. Corporate Services reported results
also reflect a number of items and activities that are excluded
from BMO's adjusted results to help assess BMO's performance. These
adjusting items are not reflective of core operating results. They
are itemized in the Non-GAAP Measures section on pages 22 and 23.
All adjusting items are recorded in Corporate Services except the
amortization of acquisition-related intangible assets, which is
recorded in the client operating groups.
Corporate Services focuses on enterprise-wide priorities that
improve service quality and efficiency to deliver an excellent
customer experience.
Financial Performance Review
Corporate Services' net income for the quarter was $54 million,
an improvement of $160 million from a year ago. Corporate Services'
results reflect a number of items and activities that are excluded
from BMO's adjusted results to help assess BMO's performance. As
discussed above, these adjusting items are not reflective of core
operating results.
Adjusted net income was $74 million, an improvement of $141
million from a year ago. Adjusted provisions for credit losses
decreased by $173 million due in part to a $132 million ($82
million after tax) recovery of provisions for credit losses on the
M&I purchased credit impaired loan portfolio, primarily as a
result of the timing and amount of repayments of loans in excess of
expectations at closing. The accounting policy for purchased loans
is discussed in the Purchased Loans section on page 133 of the
audited annual consolidated financial statements for the year ended
October 31, 2012, which are available on our website. The remaining
decrease was attributable to lower provisions charged to Corporate
Services under BMO's expected loss provisioning methodology.
Expected loss incorporates a through-the-cycle view of credit
losses on portfolios versus actual losses that occurred on
defaulted loans in the year or quarter. During economic downturns
the actual provision for credit losses may be higher than the
provision for credit losses on an expected loss basis. In the
current quarter, the actual provision for credit losses exceeded
the provision for credit losses on an expected loss basis.
Adjusted revenues were $23 million higher, due to a number of
small items. Adjusted expenses were $41 million higher, primarily
due to increases in technology investment spending and higher
professional fees.
Corporate Services net income in the current quarter increased
$7 million relative to the third quarter. Adjusted net income
increased by $9 million. Adjusted revenues were $63 million higher
than the low levels of the third quarter due to a number of small
items. Adjusted expenses were $35 million higher, mainly due to
increased technology investment spending. Adjusted provisions for
credit losses were unchanged.
Loans and acceptances at the end of the current quarter were
$1,314 million, a reduction of $532 million from the prior year and
$246 million from the preceding quarter, reflecting run-off in the
impaired real estate secured loan portfolio.
Adjusted results in the foregoing Corporate Services section are
non-GAAP amounts or non-GAAP measures. Please see the Non-GAAP
Measures section.
Non-GAAP Measures (1)
(Canadian $ in millions, Fiscal- Fiscal-
except as noted) Q4-2012 Q3-2012 Q4-2011 2012 2011
----------------------------------------------------------------------------
Reported Results
Revenue 4,176 3,878 3,822 16,130 13,943
Non-interest expense (2,701) (2,484) (2,432) (10,238) (8,741)
----------------------------------------------------------------------------
Pre-provision, pre-tax
earnings 1,475 1,394 1,390 5,892 5,202
Provision for credit
losses (192) (237) (362) (765) (1,212)
Provision for income taxes (201) (187) (260) (938) (876)
----------------------------------------------------------------------------
Net Income 1,082 970 768 4,189 3,114
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Reported Measures
EPS ($) 1.59 1.42 1.11 6.15 4.84
Net income growth (%) 40.8 36.9 1.4 34.5 8.0
EPS growth (%) 43.2 30.3 (10.5) 27.1 1.9
Revenue growth (%) 9.3 16.8 18.1 15.7 13.9
Non-interest expense
growth (%) 11.0 11.9 19.9 17.1 14.7
Efficiency ratio (%) 64.7 64.1 63.7 63.5 62.7
Operating leverage (%) (1.7) 4.9 (1.8) (1.4) (0.8)
Return on equity (%) 15.6 14.5 12.7 15.9 15.1
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Adjusting Items (Pre-tax)
Credit-related items on
the M&I purchased
performing loan portfolio
(2) 57 76 173 407 173
Hedge costs related to
foreign currency risk on
purchase of M&I - - - - (20)
M&I integration costs (4) (153) (105) (53) (402) (131)
M&I acquisition-related
costs - - (5) - (87)
Amortization of
acquisition-related
intangible assets (4) (34) (33) (33) (134) (70)
Decrease (increase) in the
collective allowance for
credit losses 49 15 17 82 (6)
Run-off structured credit
activities (3) 67 (15) (119) 264 (50)
Restructuring costs (4) (74) - - (173) -
----------------------------------------------------------------------------
Adjusting items included
in reported pre-tax
income (88) (62) (20) 44 (191)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Adjusting Items (After-
tax)
Credit-related items on
the M&I purchased
performing loan portfolio 35 47 107 251 107
Hedge costs related to
foreign currency risk on
purchase of M&I - - - - (14)
M&I integration costs (95) (65) (35) (250) (84)
M&I acquisition-related
costs - - (4) - (62)
Amortization of
acquisition-related
intangible assets (24) (24) (25) (96) (54)
Decrease (increase) in the
collective allowance for
credit losses 27 14 12 53 (4)
Run-off structured credit
activities 67 (15) (119) 261 (50)
Restructuring costs (53) - - (122) -
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Adjusting items included
in reported after-tax net
income (43) (43) (64) 97 (161)
EPS ($) (0.06) (0.07) (0.09) 0.15 (0.26)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Adjusted Results (1)
Revenue 3,920 3,677 3,670 15,067 13,742
Non-interest expense (2,436) (2,342) (2,341) (9,513) (8,453)
----------------------------------------------------------------------------
Pre-provision, pre-tax
earnings 1,484 1,335 1,329 5,554 5,289
Provision for credit
losses (113) (116) (281) (471) (1,108)
Provision for income taxes (246) (206) (216) (991) (906)
----------------------------------------------------------------------------
Adjusted net Income 1,125 1,013 832 4,092 3,275
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Adjusted Measures (1) (5)
EPS ($) 1.65 1.49 1.20 6.00 5.10
Net income growth (%) 35.1 18.4 8.6 24.9 12.3
EPS growth (%) 37.5 11.2 (4.8) 17.6 6.0
Revenue growth (%) 6.8 8.8 13.4 9.7 12.3
Non-interest expense
growth (%) 4.1 13.2 16.0 12.5 11.5
Efficiency ratio (%) 62.2 63.7 63.8 63.1 61.5
Operating leverage (%) 2.7 (4.4) (2.6) (2.8) 0.8
Return on equity (%) 16.3 15.2 13.9 15.5 16.0
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) Adjusted results in this chart are non-GAAP amounts or non-GAAP
measures.
(2) Comprised of $185 million of net interest income, $103 million of
specific provisions for credit losses and $25 million of collective
provisions in Q4-2012; $212 million of net interest income, $113
million of specific provisions for credit losses and $23 million of
collective provisions in Q3-2012; and $271 million of net interest
income, $18 million of specific provisions for credit losses and $80
million of collective provisions in Q4-2011.
(3) Substantially all included in trading revenue, in non-interest
revenue.
(4) Included in non-interest expense.
(5) Amounts for periods prior to fiscal 2011 have not been restated to
conform to IFRS. As a result, growth measures for 2011 may not be
meaningful.
Non-GAAP Measures (Cont'd.)
Results and measures in this Financial Review are presented on a
GAAP basis. They are also presented on an adjusted basis that
excludes the impact of certain items as set out in the preceding
table. Management assesses performance on both a reported and
adjusted basis and considers both bases to be useful in assessing
underlying, ongoing business performance. Presenting results on
both bases provides readers with an enhanced understanding of how
management views results. It also permits readers to assess the
impact of the specified items on results for the periods presented
and to better assess results excluding those items if they consider
the items to not be reflective of ongoing results. As such, the
presentation may facilitate readers' analysis of trends as well as
comparisons with our competitors. Adjusted results and measures are
non-GAAP and as such do not have standardized meaning under GAAP.
They are unlikely to be comparable to similar measures presented by
other companies and should not be viewed in isolation from or as a
substitute for GAAP results. Details of adjustments are also set
out in the Adjusted Net Income section.
Certain of the adjusting items relate to expenses that arise as
a result of acquisitions including the amortization of
acquisition-related intangible assets, and are adjusted because the
purchase decision may not consider the amortization of such assets
to be a relevant expense. Certain other acquisition-related costs
in respect of the acquired business have been designated as
adjusting items due to the significance of the amounts and the fact
that they can impact trend analysis. Certain other items have also
been designated as adjusting items due to their effects on trend
analysis. They include changes in the collective allowance and
credit-related amounts in respect of the M&I purchased
performing loan portfolio, structured credit run-off activities and
restructuring costs.
Net economic profit represents net income available to common
shareholders after deduction of a charge for capital, and is
considered an effective measure of added economic value. Income
before provision for credit losses and income taxes (pre-provision,
pre-tax earnings) is considered useful information as it provides a
measure of performance that excludes the effects of credit losses
and income taxes, which can at times mask performance because of
their size and variability.
In the fourth quarter of 2012, adjusting items reduced reported
net income by $43 million after tax, comprised of a $35 million
after-tax net benefit of credit-related items in respect of the
M&I purchased performing loan portfolio (including $185 million
in net interest income, net of a $128 million provision for credit
losses and related income taxes of $22 million); a $49 million ($27
million after tax) decrease in the collective allowance; costs of
$153 million ($95 million after tax) for the integration of the
acquired business; a $34 million ($24 million after tax) charge for
amortization of acquisition-related intangible assets on all
acquisitions; a benefit on run-off structured credit activities of
$67 million ($67 million after tax) primarily included in trading
revenue; and a restructuring charge of $74 million ($53 million
after tax) to align our cost structure for the current and future
business environment. Adjusting items were charged to Corporate
Services with the exception of the amortization of
acquisition-related intangible assets, which was charged to the
operating groups as follows: P&C Canada $3 million ($2 million
after tax); P&C U.S. $24 million ($16 million after tax); and
Private Client Group $7 million ($6 million after tax).
In the fourth quarter of 2011, adjusting reduced reported net
income by $64 million after tax. Adjusting items consisted of a
$107 million after-tax net benefit of credit-related items in
respect of the M&I purchased performing loan portfolio
(including $271 million in net interest income, net of a $98
million provision for credit losses and related income taxes of $66
million); a $53 million charge ($35 million after tax) for the
integration costs of the acquired business; a $33 million ($25
million after tax) charge for amortization of acquisition-related
intangible assets on all acquisitions; a $119 million loss ($119
million after tax) from the results of run-off structured credit
activities, primarily included in trading revenue; a $17 million
($12 million after tax) increase in the collective allowance; and a
$5 million charge ($4 million after tax) on M&I acquisition
related costs. Adjusting items were charged to Corporate Services
with the exception of the amortization of acquisition-related
intangible assets, which was charged to the operating groups as
follows: P&C Canada $3 million ($2 million after tax); P&C
U.S. $25 million ($17 million after tax); and Private Client Group
$6 million ($6 million after tax).
In the third quarter of 2012, adjusting items reduced reported
net income by $43 million after tax, comprised of a $47 million
after-tax net benefit of credit-related items in respect of the
M&I purchased performing loan portfolio (including $212 million
in net interest income, net of a $136 million provision for credit
losses and related income taxes of $29 million); a $15 million ($14
million after tax) decrease in the collective allowance; costs of
$105 million ($65 million after tax) for the integration of the
acquired business; a $33 million ($24 million after tax) charge for
the amortization of acquisition-related intangible assets; and a
$15 million ($14 million after tax) loss from the results of
run-off structured credit activities, primarily included in trading
revenue. All of the above adjusting items were charged to Corporate
Services except for the amortization of acquisition-related
intangible assets, which was charged to the operating groups as
follows: P&C Canada $3 million ($3 million after tax); P&C
U.S. $23 million ($15 million after tax); and Private Client Group
$7 million ($6 million after tax).
INVESTOR AND MEDIA PRESENTATION
Investor Presentation Materials
Interested parties are invited to visit our website at
www.bmo.com/investorrelations to review our 2012 annual report,
this quarterly news release, presentation materials and a
supplementary financial information package online.
Quarterly Conference Call and Webcast Presentations
Interested parties are also invited to listen to our quarterly
conference call on Tuesday, December 4, 2012, at 2:00 p.m. (EST).
At that time, senior BMO executives will comment on results for the
quarter and respond to questions from the investor community. The
call may be accessed by telephone at 416-695-9753 (from within
Toronto) or 1-888-789-0089 (toll-free outside Toronto). A replay of
the conference call can be accessed until Monday, February 25,
2013, by calling 905-694-9451 (from within Toronto) or
1-800-408-3053 (toll-free outside Toronto) and entering passcode
6850310.
A live webcast of the call can be accessed on our website at
www.bmo.com/investorrelations. A replay can be accessed on the site
until Monday, February 25, 2013.
Media Relations Contacts
Ralph Marranca, Toronto, ralph.marranca@bmo.com, 416-867-3996
Valerie Doucet, Montreal, valerie.doucet@bmo.com, 514-877-8224
Investor Relations Contacts
Sharon Haward-Laird, Head, Investor Relations, sharon.hawardlaird@bmo.com,
416-867-6656
Andrew Chin, Senior Manager, andrew.chin@bmo.com, 416-867-7019
Chief Financial Officer
Tom Flynn, Executive Vice-President and CFO,
tom.flynn@bmo.com, 416-867-4689
Corporate Secretary
Barbara Muir, Senior Vice-President, Deputy General Counsel,
Corporate Affairs and Corporate Secretary
corp.secretary@bmo.com, 416-867-6423
----------------------------------------------------------------------------
Shareholder Dividend Reinvestment and For other shareholder information,
Share Purchase Plan please contact
Average market price Bank of Montreal
August 2012 $57.77 ($56.61(i)) Shareholder Services
September 2012 $57.98 Corporate Secretary's Department
October 2012 $59.42 One First Canadian Place, 21st Floor
(i) reflects 2% discount for dividend Toronto, Ontario M5X 1A1
reinvestment Telephone: (416) 867-6785
Fax: (416) 867-6793
For dividend information, change in E-mail: corp.secretary@bmo.com
shareholder address or to advise of
duplicate mailings, please contact For further information on this
Computershare Trust Company of Canada report, please contact
100 University Avenue, 9th Floor Bank of Montreal
Toronto, Ontario M5J 2Y1 Investor Relations Department
Telephone: 1-800-340-5021 P.O. Box 1, One First Canadian Place,
(Canada and the United States) 18th Floor
Telephone: (514) 982-7800 Toronto, Ontario M5X 1A1
(international)
Fax: 1-888-453-0330 To review financial results online,
(Canada and the United States) please visit our website at
Fax: (416) 263-9394 http://www.bmo.com/
(international)
E-mail: service@computershare.com
----------------------------------------------------------------------------
® Registered trademark of Bank of Montreal
----------------------------------------------------------------------------
Annual Meeting 2013
The next Annual Meeting of Shareholders will be held on
Wednesday, April 10, 2013, in Saskatoon, Saskatchewan.
----------------------------------------------------------------------------
Interim Consolidated Financial Statements
Consolidated Statement of Income
(Unaudited)
(Canadian $ in
millions, except
as noted) For the three months ended
----------------------------------------------------------------------------
October July April January October
31, 2012 31, 2012 30, 2012 31, 2012 31, 2011
----------------------------------------------------------------------------
Interest, Dividend and
Fee Income
Loans $ 2,786 $ 2,807 $ 2,680 $ 2,868 $ 3,020
Securities 570 568 536 591 484
Deposits with banks 58 72 64 45 44
----------------------------------------------------------------------------
3,414 3,447 3,280 3,504 3,548
----------------------------------------------------------------------------
Interest Expense
Deposits 700 680 570 628 674
Subordinated debt 32 37 47 49 43
Capital trust securities 12 12 11 16 18
Other liabilities 525 493 532 493 551
----------------------------------------------------------------------------
1,269 1,222 1,160 1,186 1,286
----------------------------------------------------------------------------
Net Interest Income 2,145 2,225 2,120 2,318 2,262
----------------------------------------------------------------------------
Non-Interest Revenue
Securities commissions
and fees 282 276 303 285 292
Deposit and payment
service charges 230 232 227 240 246
Trading revenues (losses) 312 140 228 345 (15)
Lending fees 175 169 137 160 152
Card fees 181 186 174 167 188
Investment management and
custodial fees 186 188 179 172 176
Mutual fund revenues 168 161 159 159 157
Underwriting and advisory
fees 111 123 130 78 76
Securities gains, other
than trading 56 14 40 42 61
Foreign exchange, other
than trading 35 28 51 39 11
Insurance income 144 40 105 46 74
Other 151 96 106 66 142
----------------------------------------------------------------------------
2,031 1,653 1,839 1,799 1,560
----------------------------------------------------------------------------
Total Revenue 4,176 3,878 3,959 4,117 3,822
----------------------------------------------------------------------------
Provision for Credit
Losses 192 237 195 141 362
----------------------------------------------------------------------------
Non-Interest Expense
Employee compensation 1,454 1,337 1,391 1,446 1,311
Premises and equipment 527 473 461 455 464
Amortization of
intangible assets 88 86 82 83 81
Travel and business
development 129 116 118 128 106
Communications 78 79 72 72 75
Business and capital
taxes 13 10 11 12 14
Professional fees 168 161 141 123 154
Other 244 222 223 235 227
----------------------------------------------------------------------------
2,701 2,484 2,499 2,554 2,432
----------------------------------------------------------------------------
Income Before Provision
for Income Taxes 1,283 1,157 1,265 1,422 1,028
Provision for income
taxes 201 187 237 313 260
----------------------------------------------------------------------------
Net Income $ 1,082 $ 970 $ 1,028 $ 1,109 $ 768
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Attributable to:
Bank shareholders 1,064 951 1,010 1,090 749
Non-controlling
interest in
subsidiaries 18 19 18 19 19
----------------------------------------------------------------------------
Net Income $ 1,082 $ 970 $ 1,028 $ 1,109 $ 768
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Earnings Per Share
(Canadian $)
Basic $ 1.59 $ 1.42 $ 1.52 $ 1.65 $ 1.12
Diluted 1.59 1.42 1.51 1.63 1.11
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(Unaudited)
(Canadian $ in
millions, except For the twelve
as noted) months ended
---------------------------------------------
October October
31, 2012 31, 2011
---------------------------------------------
Interest, Dividend and
Fee Income
Loans $ 11,141 $ 10,203
Securities 2,265 2,176
Deposits with banks 239 145
---------------------------------------------
13,645 12,524
---------------------------------------------
Interest Expense
Deposits 2,578 2,693
Subordinated debt 165 157
Capital trust securities 51 76
Other liabilities 2,043 2,124
---------------------------------------------
4,837 5,050
---------------------------------------------
Net Interest Income 8,808 7,474
---------------------------------------------
Non-Interest Revenue
Securities commissions
and fees 1,146 1,215
Deposit and payment
service charges 929 834
Trading revenues (losses) 1,025 549
Lending fees 641 593
Card fees 708 689
Investment management and
custodial fees 725 496
Mutual fund revenues 647 633
Underwriting and advisory
fees 442 512
Securities gains, other
than trading 152 189
Foreign exchange, other
than trading 153 130
Insurance income 335 283
Other 419 346
---------------------------------------------
7,322 6,469
---------------------------------------------
Total Revenue 16,130 13,943
---------------------------------------------
Provision for Credit
Losses 765 1,212
---------------------------------------------
Non-Interest Expense
Employee compensation 5,628 4,827
Premises and equipment 1,916 1,578
Amortization of
intangible assets 339 231
Travel and business
development 491 382
Communications 301 259
Business and capital
taxes 46 51
Professional fees 593 624
Other 924 789
---------------------------------------------
10,238 8,741
---------------------------------------------
Income Before Provision
for Income Taxes 5,127 3,990
Provision for income
taxes 938 876
---------------------------------------------
Net Income $ 4,189 $ 3,114
---------------------------------------------
---------------------------------------------
Attributable to:
Bank shareholders 4,115 3,041
Non-controlling
interest in
subsidiaries 74 73
---------------------------------------------
Net Income $ 4,189 $ 3,114
---------------------------------------------
---------------------------------------------
Earnings Per Share
(Canadian $)
Basic $ 6.18 $ 4.90
Diluted 6.15 4.84
---------------------------------------------
---------------------------------------------
Interim Consolidated Financial Statements
Consolidated Statement of Comprehensive Income
(Unaudited)
(Canadian $ in
millions) For the three months ended
----------------------------------------------------------------------------
October July April January October
31, 2012 31, 2012 30, 2012 31, 2012 31, 2011
----------------------------------------------------------------------------
Net income $ 1,082 $ 970 $ 1,028 $ 1,109 $ 768
Other Comprehensive
Income (Loss)
Net change in
unrealized gains
(losses) on
available-for-sale
securities
Unrealized gains
(losses) on
available-for-sale
securities arising
during the period
(net of income tax
(provision)
recovery of $(12),
$(9), $(2), $10,
$(20), $(13) and
$(11)) 22 26 6 (30) 23
Reclassification to
earnings of
(gains) losses in
the period (net of
income tax
provision
(recovery) of $14,
$14, $(11), $22,
$37, $39 and $51) (39) 14 (23) (33) (67)
----------------------------------------------------------------------------
(17) 40 (17) (63) (44)
----------------------------------------------------------------------------
Net change in
unrealized gains
(losses) on cash
flow hedges
Gains (losses) on
cash flow hedges
arising during the
period(net of
income tax
(provision)
recovery of $(7),
$(63), $99, $(19),
$(89), $10 and
$(137)) 15 177 (300) 46 230
Reclassification to
earnings of
(gains) on cash
flow hedges (net
of income tax
provision of $14,
$9, $15, $nil,
$11, $38 and $9) (40) (29) (38) - (30)
----------------------------------------------------------------------------
(25) 148 (338) 46 200
----------------------------------------------------------------------------
Net gain (loss) on
translation of net
foreign operations
Unrealized gain
(loss) on
translation of net
foreign operations (63) 260 (255) 133 759
Impact of hedging
unrealized gain
(loss) on
translation of net
foreign operations
(net of income tax
(provision)
recovery of $(5),
$24, $(23), $17,
$144, $13 and
$(26)) 17 (70) 66 (48) (317)
----------------------------------------------------------------------------
(46) 190 (189) 85 442
----------------------------------------------------------------------------
Other Comprehensive
Income (Loss) (88) 378 (544) 68 598
----------------------------------------------------------------------------
Total Comprehensive
Income $ 994 $ 1,348 $ 484 $ 1,177 $ 1,366
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Attributable to:
Bank shareholders 976 1,329 466 1,158 1,347
Non-controlling
interest in
subsidiaries 18 19 18 19 19
----------------------------------------------------------------------------
Total Comprehensive
Income $ 994 $ 1,348 $ 484 $ 1,177 $ 1,366
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(Unaudited)
(Canadian $ in For the twelve
millions) months ended
-------------------------------------------
October October
31, 2012 31, 2011
-------------------------------------------
Net income $ 4,189 $ 3,114
Other Comprehensive
Income (Loss)
Net change in
unrealized gains
(losses) on
available-for-sale
securities
Unrealized gains
(losses) on
available-for-sale
securities arising
during the period
(net of income tax
(provision)
recovery of $(12),
$(9), $(2), $10,
$(20), $(13) and
$(11)) 24 18
Reclassification to
earnings of
(gains) losses in
the period (net of
income tax
provision
(recovery) of $14,
$14, $(11), $22,
$37, $39 and $51) (81) (104)
-------------------------------------------
(57) (86)
-------------------------------------------
Net change in
unrealized gains
(losses) on cash
flow hedges
Gains (losses) on
cash flow hedges
arising during the
period(net of
income tax
(provision)
recovery of $(7),
$(63), $99, $(19),
$(89), $10 and
$(137)) (62) 328
Reclassification to
earnings of
(gains) on cash
flow hedges (net
of income tax
provision of $14,
$9, $15, $nil,
$11, $38 and $9) (107) (21)
-------------------------------------------
(169) 307
-------------------------------------------
Net gain (loss) on
translation of net
foreign operations
Unrealized gain
(loss) on
translation of net
foreign operations 75 (90)
Impact of hedging
unrealized gain
(loss) on
translation of net
foreign operations
(net of income tax
(provision)
recovery of $(5),
$24, $(23), $17,
$144, $13 and
$(26)) (35) 123
-------------------------------------------
40 33
-------------------------------------------
Other Comprehensive
Income (Loss) (186) 254
-------------------------------------------
Total Comprehensive
Income $ 4,003 $ 3,368
-------------------------------------------
-------------------------------------------
Attributable to:
Bank shareholders 3,929 3,295
Non-controlling
interest in
subsidiaries 74 73
-------------------------------------------
Total Comprehensive
Income $ 4,003 $ 3,368
-------------------------------------------
-------------------------------------------
Interim Consolidated Financial Statements
Consolidated Balance Sheet
(Unaudited)
(Canadian $ in
millions) As at
----------------------------------------------------------------------------
October July April January October
31, 2012 31, 2012 30, 2012 31, 2012 31, 2011
----------------------------------------------------------------------------
Assets
Cash and Cash
Equivalents $ 19,941 $ 33,592 $ 34,117 $ 39,553 $ 19,676
----------------------------------------------------------------------------
Interest Bearing
Deposits with Banks 6,341 5,995 7,010 7,603 5,980
----------------------------------------------------------------------------
Securities
Trading 70,109 70,045 71,432 71,018 69,925
Available-for-sale 56,382 59,297 54,906 54,545 51,426
Held-to-maturity 875 - - - -
Other 958 877 781 825 764
----------------------------------------------------------------------------
128,324 130,219 127,119 126,388 122,115
----------------------------------------------------------------------------
Securities Borrowed
or Purchased Under
Resale Agreements 44,238 45,535 42,253 42,608 37,970
----------------------------------------------------------------------------
Loans
Residential
mortgages 87,870 85,595 82,260 81,317 81,075
Consumer instalment
and other personal 61,436 60,792 60,002 59,688 59,445
Credit cards 7,814 7,837 7,861 7,871 8,038
Businesses and
governments 93,175 92,870 89,800 88,719 84,883
----------------------------------------------------------------------------
250,295 247,094 239,923 237,595 233,441
Customers' liability
under acceptances 8,019 8,013 7,406 6,782 7,227
Allowance for credit
losses (1,706) (1,755) (1,807) (1,756) (1,783)
----------------------------------------------------------------------------
256,608 253,352 245,522 242,621 238,885
----------------------------------------------------------------------------
Other Assets
Derivative
instruments 48,071 52,263 46,760 58,219 55,113
Premises and
equipment 2,120 2,059 2,033 2,020 2,061
Goodwill 3,717 3,732 3,702 3,656 3,649
Intangible assets 1,552 1,572 1,541 1,558 1,562
Current tax assets 1,293 1,141 2,187 1,504 1,319
Deferred tax assets 2,906 3,000 2,820 3,090 3,355
Other 10,338 9,788 10,439 9,440 8,890
----------------------------------------------------------------------------
69,997 73,555 69,482 79,487 75,949
----------------------------------------------------------------------------
Total Assets $ 525,449 $ 542,248 $ 525,503 $ 538,260 $ 500,575
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Liabilities and
Equity
Deposits
Banks $ 17,290 $ 23,314 $ 22,508 $ 20,150 $ 20,877
Businesses and
governments 185,182 183,698 171,539 173,852 159,209
Individuals 121,230 121,956 122,020 122,555 122,287
----------------------------------------------------------------------------
323,702 328,968 316,067 316,557 302,373
----------------------------------------------------------------------------
Other Liabilities
Derivative
instruments 48,736 53,132 46,472 55,157 50,934
Acceptances 8,019 8,013 7,406 6,782 7,227
Securities sold but
not yet purchased 23,439 22,523 23,834 21,269 20,207
Securities lent or
sold under
repurchase
agreements 39,737 47,145 46,076 51,952 32,078
Current tax
liabilities 404 294 1,017 634 591
Deferred tax
liabilities 171 191 207 225 314
Other 46,596 48,029 50,295 51,342 52,846
----------------------------------------------------------------------------
167,102 179,327 175,307 187,361 164,197
----------------------------------------------------------------------------
Subordinated Debt 4,093 4,107 5,276 5,362 5,348
----------------------------------------------------------------------------
Capital Trust
Securities 462 450 462 450 821
----------------------------------------------------------------------------
Equity
Share capital 14,422 14,213 14,033 14,260 14,193
Contributed surplus 213 216 215 119 113
Retained earnings 13,540 12,977 12,512 11,986 11,381
Accumulated other
comprehensive
income 480 568 190 734 666
----------------------------------------------------------------------------
Total shareholders'
equity 28,655 27,974 26,950 27,099 26,353
Non-controlling
interest in
subsidiaries 1,435 1,422 1,441 1,431 1,483
----------------------------------------------------------------------------
Total Equity 30,090 29,396 28,391 28,530 27,836
----------------------------------------------------------------------------
Total Liabilities
and Equity $ 525,449 $ 542,248 $ 525,503 $ 538,260 $ 500,575
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Interim Consolidated Financial Statements
Consolidated Statement of Changes in Equity
For the three For the twelve
(Unaudited) (Canadian $ in millions) months ended months ended
----------------------------------------------------------------------------
October October October October
31, 2012 31, 2011 31, 2012 31, 2011
----------------------------------------------------------------------------
Preferred Shares
Balance at beginning of period $ 2,465 $ 2,861 $ 2,861 $ 2,571
Issued during the period - - - 290
Redeemed during the period - - (396) -
----------------------------------------------------------------------------
Balance at End of Period 2,465 2,861 2,465 2,861
----------------------------------------------------------------------------
Common Shares
Balance at beginning of period 11,748 11,253 11,332 6,927
Issued under the Shareholder
Dividend Reinvestment and Share 176 44 543 179
Purchase Plan
Issued under the Stock Option Plan 33 34 80 122
Issued on the exchange of shares of
a subsidiary corporation - 1 2 1
Issued on the acquisition of a
business - - - 4,103
----------------------------------------------------------------------------
Balance at End of Period 11,957 11,332 11,957 11,332
----------------------------------------------------------------------------
Contributed Surplus
Balance at beginning of period 216 111 113 91
Stock option expense/exercised (3) 2 4 22
Foreign exchange on redemption of
preferred shares - - 96 -
----------------------------------------------------------------------------
Balance at End of Period 213 113 213 113
----------------------------------------------------------------------------
Retained Earnings
Balance at beginning of period 12,977 11,117 11,381 10,181
Net income attributable to Bank
shareholders 1,064 749 4,115 3,041
Dividends - Preferred shares (33) (37) (136) (146)
- Common shares (468) (448) (1,820) (1,690)
Share issue expense - - - (5)
----------------------------------------------------------------------------
Balance at End of Period 13,540 11,381 13,540 11,381
----------------------------------------------------------------------------
Accumulated Other Comprehensive
Income on Available-for-Sale
Securities
Balance at beginning of period 282 366 322 408
Unrealized gains on available-for-
sale securities arising during the
period (net of income tax
(provision) of $(12), $(20), $(13)
and $(11)) 22 23 24 18
Reclassification to earnings of
(gains) in the period (net of
income tax provision of $14, $37,
$39 and $51) (39) (67) (81) (104)
----------------------------------------------------------------------------
Balance at End of Period 265 322 265 322
----------------------------------------------------------------------------
Accumulated Other Comprehensive
Income on Cash Flow Hedges
Balance at beginning of period 167 111 311 4
Gains (losses) on cash flow hedges
arising during the period (net of
income tax (provision) recovery of
$(7), $(89), $10 and $(137)) 15 230 (62) 328
Reclassification to earnings of
(gains) on cash flow hedges (net of
income tax provision of $14, $11,
$38 and $9) (40) (30) (107) (21)
----------------------------------------------------------------------------
Balance at End of Period 142 311 142 311
----------------------------------------------------------------------------
Accumulated Other Comprehensive
Income on Translation of Net
Foreign Operations
Balance at beginning of period 119 (409) 33 -
Unrealized gain (loss) on
translation of net foreign
operations (63) 759 75 (90)
Impact of hedging unrealized gain
(loss) on translation of net
foreign operations (net of income
tax (provision) recovery of $(5),
$144, $13 and $(26)) 17 (317) (35) 123
----------------------------------------------------------------------------
Balance at End of Period 73 33 73 33
----------------------------------------------------------------------------
Total Accumulated Other
Comprehensive Income 480 666 480 666
----------------------------------------------------------------------------
Total Shareholders' Equity $ 28,655 $ 26,353 $ 28,655 $ 26,353
----------------------------------------------------------------------------
Non-controlling Interest in
Subsidiaries
Balance at beginning of period 1,422 1,464 1,483 1,501
Net income attributable to non-
controlling interest 18 19 74 73
Dividends to non-controlling
interest (5) (5) (73) (71)
Other - 5 (49) (20)
----------------------------------------------------------------------------
Balance at End of Period 1,435 1,483 1,435 1,483
----------------------------------------------------------------------------
Total Equity $ 30,090 $ 27,836 $ 30,090 $ 27,836
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Contacts: Media Relations Contacts Ralph Marranca, Toronto
416-867-3996ralph.marranca@bmo.com Valerie Doucet, Montreal
514-877-8224valerie.doucet@bmo.com Investor Relations Contacts
Sharon Haward-Laird Head, Investor Relations
416-867-6656sharon.hawardlaird@bmo.com Andrew Chin Senior Manager
416-867-7019andrew.chin@bmo.com Chief Financial Officer Tom Flynn
Executive Vice-President and CFO 416-867-4689tom.flynn@bmo.com
Corporate Secretary Barbara Muir Senior Vice-President, Deputy
General Counsel, Corporate Affairs and Corporate Secretary
416-867-6423corp.secretary@bmo.com
Bank of Montreal (TSX:BMO)
Historical Stock Chart
From Mar 2024 to Apr 2024
Bank of Montreal (TSX:BMO)
Historical Stock Chart
From Apr 2023 to Apr 2024
