BMO Financial Group Reports Net Income of $1.1 Billion for the Third Quarter of 2014
JCN Newswire / 2014年8月27日 11時37分
Toronto, Ontario, Aug 27, 2014 - (JCN Newswire) - BMO Financial Group (TSX:BMO)(NYSE:BMO) and Bank of Montreal -
Financial Results Highlights:
Third Quarter 2014 Compared with Third Quarter 2013:
-- Net income of $1,126 million; adjusted net income(1) of $1,162 million, up 4%
-- EPS(2) of $1.67, up 1%; adjusted EPS(1,2) of $1.73, up 4%
-- ROE of 14.4%, compared with 15.5%; adjusted ROE(1) of 14.9%, compared with 15.5%
-- Provisions for credit losses of $130 million, compared with $76 million; adjusted provisions for credit losses(1) of $130 million, compared with $12 million
-- Basel III Common Equity Tier 1 Ratio of 9.6%
Year-to-Date 2014 Compared with Year-to-Date 2013:
-- Net income of $3,263 million, up 5%; adjusted net income(1) of $3,342 million, up 7%
-- EPS(2) of $4.85, up 6%; adjusted EPS (1,2) of $4.97, up 8%
-- ROE of 14.3%, compared with 14.9%; adjusted ROE(1) of 14.7%, compared with 15.0%
-- Provisions for credit losses of $391 million, compared with $398 million; adjusted provisions for credit losses(1) of $391 million, compared with $217 million
For the third quarter ended July 31, 2014, BMO Financial Group reported net income of $1,126 million or $1.67 per share on a reported basis and net income of $1,162 million or $1.73 per share on an adjusted basis.
"BMO delivered very good results in the third quarter confirming continued momentum across our businesses," said Bill Downe, Chief Executive Officer, BMO Financial Group. "Adjusted net income was up 4% from particularly strong results a year ago and adjusted earnings per share have increased 8% year-to-date.
"Personal and Commercial Banking in Canada had continuing strong performance with operating leverage above 2% for the fourth consecutive quarter. Net income and pre-provision, pre-tax earnings growth in U.S. Personal and Commercial Banking was encouraging, with improved revenue trends despite the low interest rate environment. Traditional wealth posted adjusted net income growth of 27% reflecting good organic growth in client assets and the acquired F&C business. There were also very good results in BMO Capital Markets driven by strong revenue growth in Investment and Corporate Banking.
"Our success in growing both sides of the balance sheet is directly attributable to a strategy that emphasizes the delivery of an industry-leading customer experience and a brand promise that recognizes that money is personal - and a bank should be too. The Bank is very well positioned, and we remain confident in our momentum," concluded Mr. Downe.
(1) 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. 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, where such non-GAAP measures and their closest GAAP counterparts are disclosed.
(2) 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 document are based on unrounded numbers.
Concurrent with the release of results, BMO announced a fourth quarter 2014 dividend of $0.78 per common share, unchanged from the preceding quarter and up $0.04 per share or 5% from a year ago, equivalent to an annual dividend of $3.12 per common share.
Our complete Third Quarter 2014 Report to Shareholders, including our unaudited interim consolidated financial statements for the period ended July 31, 2014, is available online at www.bmo.com/investorrelations and at www.sedar.com .
Total Bank Overview
Net income was $1,126 million for the third quarter of 2014, relatively unchanged from a year ago. Adjusted net income was $1,162 million, up $40 million or 4% from a particularly strong third quarter a year ago, as the prior year's results benefited from very low credit losses and a positive impact of long-term rates on insurance.
Momentum continued with strong results in Canadian P&C and BMO Capital Markets, and improved results in U.S. P&C. Wealth Management had good results, excluding the impact of movements in long-term interest rates.
The Basel III Common Equity Tier 1 Ratio remains strong at 9.6% following the acquisition of F&C Asset Management plc (F&C).
Operating Segment Overview
Net income was $526 million, up $40 million or 8% from a year ago. Adjusted net income was $528 million, up $39 million or 8% from the prior year, driven by higher revenue. Revenue was up $96 million or 6% year over year primarily due to strong balance and fee volumes, partially offset by the impact of lower net interest margin. Year-over-year loan growth was 7% and deposit growth was 9%. Expenses increased $34 million or 4%. Operating leverage was 2.1% and above 2% for the fourth consecutive quarter.
In personal banking, good year-over-year loan and deposit growth continued at 7% and 10%, respectively. Our Spring Home Financing Campaign was successful and our recently launched Summer Everyday Banking Campaign is attracting new customers to BMO and increasing the number of products held. During the quarter we became the first Canadian bank to provide customers with the capability to transfer money between Canadian and U.S. dollar accounts via mobile banking.
In commercial banking, year-over-year loan and deposit growth was 9% and 7%, respectively. We continue to streamline our lending processes, enabling our salesforce to spend more time acquiring new customers and strengthening existing relationships. We remain second in Canadian business banking loan market share for small and medium-sized loans.
U.S. P&C (all amounts in US$)
Net income of $147 million increased $3 million or 2% from a year ago. Adjusted net income of $158 million, increased $1 million or 1%, due to improving revenue.
There were year-over-year and quarterly sequential increases in average current loans and acceptances, led by continued strong double-digit growth in the core commercial and industrial (C&I) loan portfolio. The core C&I portfolio increased by $4.1 billion or 18% from a year ago to $27.1 billion.
BMO Harris Bank received the 2014 Community Partner Award from Latinos Progresando, in recognition of our significant impact - culturally, economically, and educationally - on Chicago's Latino community. In addition, we received the Corporation of the Year award from the Hispanic Professionals of Greater Milwaukee. These awards represent our strong commitment to the Latino community we serve throughout our footprint.
Net income of $190 million decreased $27 million from a year ago. Adjusted net income of $212 million decreased $12 million or 4%. Good organic growth increased adjusted net income by 19% year over year, excluding the impact of movements in long-term interest rates. Adjusted net income in traditional wealth was $164 million, up 27% or $33 million, with approximately 60% of the increase due to the contribution from the acquired F&C business and the remainder from strong growth in client assets. Adjusted net income in insurance was $48 million, down $45 million or 48% from a year ago primarily due to a $22 million after-tax charge from unfavourable movements in long-term interest rates in the current quarter relative to a $42 million after-tax benefit a year ago.
Assets under management and administration grew by $251 billion or 48% from a year ago to $776 billion, with the acquired F&C business contributing $153 billion to the increase. Excluding F&C, assets under management and administration grew by 19%, driven by market appreciation, the stronger U.S. dollar and growth in new client assets.
On May 7, 2014, we completed the acquisition of F&C. This acquisition strengthens BMO Global Asset Management's position as a globally significant money manager, enhancing its asset management platform capabilities and providing attractive opportunities to service wealth markets in the United Kingdom and the rest of Europe. F&C contributed approximately 10% to Wealth Management's revenue, adjusted expenses and adjusted net income for the quarter.
In May, Global Banking and Finance Review (GBFR) named BMO Best Wealth Management in Canada, 2014, based on our ability to provide comprehensive wealth management services; ongoing commitment to providing clients with personalized and innovative investment and financial solutions; and access to local expertise - with a global reach - that supports international wealth management needs.
BMO Capital Markets
Net income of $306 million increased $38 million or 14% from a year ago driven by good revenue performance across the businesses, particularly in Investment and Corporate Banking. Revenue increased 15% year over year with a solid contribution from our U.S business. Return on equity of 22.4% was strong, up from 18.2% in the prior year.
In the quarter, we were selected as a 2014 Greenwich Quality Leader in both Canadian Equity Sales and in Canadian Equity Research and Analyst Service for Portfolio Managers, as well as a Greenwich Share Leader in Canadian Equity Trading Share and Canadian Equity Research/Advisory Portfolio Managers Vote Share. These awards, coupled with our recognition as the Best Trade Bank in Canada for the fifth consecutive year by Trade Finance Magazine, reflects the success of our commitment to meeting our core clients' needs.
BMO Capital Markets participated in 419 new global issues in the quarter, comprised of 173 corporate debt deals, 150 government debt deals and 96 equity transactions, raising $765 billion.
Corporate Services reported and adjusted net loss for the third quarter of 2014 was $55 million, compared with reported net income of $3 million and an adjusted net loss of $21 million a year ago. The decline was primarily due to lower recoveries on the purchased credit impaired loan portfolio partly offset by better revenue excluding the impact of the group taxable equivalent basis (teb) offset.
Adjusted Net Income
Adjusted net income was $1,162 million for the third quarter of 2014, up $40 million or 4% from a year ago. Adjusted earnings per share were $1.73, up 4% from $1.66 a year ago.
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. The items excluded from third quarter 2014 results in the determination of adjusted results were the amortization of acquisition-related intangible assets of $39 million ($29 million after tax; $0.05 per share) and acquisition integration costs of $9 million ($7 million after tax; $0.01 per share). Amounts excluded from adjusted results in prior years also included credit-related items in respect of the purchased performing loan portfolio, restructuring costs and run-off structured credit activities. 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. The impact of adjusting items for comparative periods is summarized in the Non-GAAP Measures section.
Adjusted results in these Total Bank Overview and Operating Segment Overview sections are non-GAAP amounts or non-GAAP measures. Please see the Non-GAAP Measures section.
The foregoing sections contain forward-looking statements. Please see the Caution Regarding Forward-Looking Statements.
Management's Discussion and Analysis
Management's Discussion and Analysis (MD&A) commentary is as of August 26, 2014. 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. The MD&A should be read in conjunction with the unaudited interim consolidated financial statements for the period ended July 31, 2014, as well as the audited consolidated financial statements for the year ended October 31, 2013, and the MD&A for fiscal 2013 in BMO's 2013 Annual Report. The material that precedes this section comprises part of this MD&A.
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's management, under the supervision of the CEO and CFO, has evaluated the effectiveness, as at July 31, 2014, of Bank of Montreal's disclosure controls and procedures (as defined in the rules of the Securities and Exchange Commission and the Canadian Securities Administrators) and has concluded that such disclosure controls and procedures are effective.
There were no changes in our internal control over financial reporting during the quarter ended July 31, 2014, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Because of inherent limitations, disclosure controls and procedures and internal control over financial reporting can provide only reasonable assurance and may not prevent or detect misstatements.
As in prior quarters, Bank of Montreal's Audit and Conduct Review Committee reviewed this document and Bank of Montreal's Board of Directors approved the document prior to its release.
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.
Press release: http://mwne.ws/XQULGz
INVESTOR AND MEDIA PRESENTATION
Investor Presentation Materials
Interested parties are invited to visit our website at www.bmo.com/investorrelations to review our 2013 Annual Report, this quarterly news release, presentation materials and 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, August 26, 2014, at 2:00 p.m. (EDT). 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, December 1, 2014, by calling 905-694-9451 (from within Toronto) or +1-800-408-3053 (toll-free outside Toronto) and entering passcode 6766952.
A live webcast of the call can be accessed on our website at www.bmo.com/investorrelations . A replay can also be accessed on the site.
Media Relations Contacts
Ralph Marranca, Toronto
Ronald Monet, Montreal
Investor Relations Contacts
Head, Investor Relations
Director, Investor Relations
Chief Financial Officer
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