BMO Financial Group Reports Net Income of $4.3 Billion for Fiscal 2014

JCN Newswire / 2014年12月3日 13時58分

Toronto, Ontario, Dec 3, 2014 - (JCN Newswire) - BMO Financial Group (TSX:BMO)(NYSE:BMO) and Bank of Montreal -

Financial Results Highlights:

Fiscal 2014 Compared with Fiscal 2013:

-- Net income of $4,333 million, up 3%; adjusted net income[1] of $4,453 million, up 5 %
-- EPS[2] of $6.41, up 4%; adjusted EPS[1][2] of $6.59, up 6%
-- ROE of 14.0%, compared with 14.9%; adjusted ROE[1] of 14.4%, compared with 15.0%
-- Provisions for credit losses of $561 million, compared with $587 million; adjusted provisions for credit losses[1] of $561 million, compared with $357 million
-- Basel III Common Equity Tier 1 Ratio of 10.1%

Fourth Quarter 2014 Compared with Fourth Quarter 2013:

-- Net income of $1,070 million, essentially unchanged; adjusted net income[1] of $1,111 million, up 2%
-- EPS[2] of $1.56, down 3%; adjusted EPS[1][2] of $1.63, up 1%
-- ROE of 13.1%, compared with 14.8%; adjusted ROE[1] of 13.7%, compared with 15.0%
-- Provisions for credit losses of $170 million, compared with $189 million; adjusted provisions for credit losses[1] of $170 million, compared with $140 million
-- Dividend increased by $0.02 or 3% to $0.80

For fiscal 2014, BMO Financial Group reported net income of $4,333 million or $6.41 per share on a reported basis and net income of $4,453 million or $6.59 per share on an adjusted basis. For the fourth quarter ended October 31, 2014, net income was $1,070 million and EPS was $1.56. Adjusted net income was $1,111 million and adjusted EPS was $1.63.

"BMO's fourth quarter results conclude a year in which the bank delivered $4.5 billion in adjusted net income with adjusted earnings per share up 6% from last year," said Bill Downe, Chief Executive Officer, BMO Financial Group. "This performance reflects a well-executed customer-focused strategy and the momentum we have demonstrated over a number of consecutive quarters.

"Canadian Personal and Commercial Banking had a strong year with over $2 billion in earnings and operating leverage of 2%. Our largest business continued to deliver good balance sheet growth and improved efficiency.

"U.S. Personal and Commercial Banking finished the year with good momentum and balance sheet growth, demonstrating improved revenue and earnings trends in the second half of the year. In the fourth quarter, adjusted pre-provision pre-tax earnings were up 5% year over year and adjusted operating leverage was 1.3%.

"Wealth Management posted another good year with adjusted net income over $800 million, benefiting from significant asset growth and our leading market positions. BMO's expanded global asset management business continues to innovate its distinguished product offering.

"Capital Markets generated over $1 billion in earnings with a strong ROE of 19% and good progress on our U.S. strategy.

"Credit performance was good with higher provisions largely reflecting lower recoveries compared to last year.

"BMO's Common Equity Tier 1 ratio ended the year strong at 10.1%.

"Looking ahead, we have an advantaged business mix, geographic diversification and a workforce with a deeply engrained commitment to customers, all of which provide attractive opportunities for growth. BMO's brand promise is a clear, concise expression of what we expect of ourselves and the commitment to deliver what our customers expect of us," concluded Mr. Downe. "On behalf of our more than 46,000 employees, I want to thank our customers for their loyalty."

Concurrent with the release of results, BMO announced a first quarter 2015 dividend of $0.80 per common share, up $0.02 per share or 3% from the preceding quarter and up $0.04 per share or 5% from a year ago, equivalent to an annual dividend of $3.20 per common share.

BMO's 2014 audited annual consolidated financial statements and accompanying management's discussion & analysis (MD&A) are available online at www.bmo.com/investorrelations along with the supplementary financial information report.

(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.

Total Bank Overview

Net income was $1,070 million for the fourth quarter of 2014, down $4 million from the prior year.

Adjusted net income was $1,111 million, up $23 million or 2%, driven by good results in Canadian P&C, U.S. P&C and Wealth Management. Prior year results included a $121 million after-tax security gain in Wealth Management. BMO Capital Markets results were lower than the prior year.

The Basel III Common Equity Tier 1 Ratio remains strong at 10.1%.

Operating Segment Overview

Canadian P&C

Net income was $524 million, up $66 million or 14% from a year ago. Adjusted net income was $526 million, up $65 million or 14% from the prior year, driven by higher revenue and lower provisions for credit losses, partially offset by higher expenses. Revenue was up $107 million or 7% year-over-year driven by higher balance and fee volumes across most products. Year-over-year loan growth was 5% and deposit growth was 9%. Expenses increased $47 million or 6% as a result of continued investment in the business and higher variable compensation consistent with annual business growth.

In personal banking, good year-over-year loan and deposit growth continued at 4% and 10%, respectively. We are focused on helping our customers with their financial needs, in the channel of their choice. Our Summer Everyday Banking campaign was a success with a 10% increase in chequing account openings from last year's strong levels, with 80% of new chequing accounts opened belonging to new to BMO customers. Mobile transactions continue to grow, nearly doubling for the year.

In commercial banking, strong loan and deposit growth continued at 8% and 7% respectively. During the quarter, we ran a successful pilot for our new BMO DepositEdge product which enables businesses to remotely deposit cheques into their accounts securely. This product was launched in November. Our Fall Small Business Campaign is underway, and is focused on offering our BMO Biz Starter for Small Business package, which meets both the business and personal banking needs of our small business customers. From the early results from this campaign we have been successful in attracting new customers to the bank. 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 $152 million and adjusted net income of $163 million both increased $54 million from the fourth quarter a year ago, with improved positive operating leverage of 2.1% or 1.3% on an adjusted basis. Increased net income was driven by lower provisions for credit losses and higher revenue partly offset by increased expenses.

Current loans and acceptances grew year over year and on a sequential basis by 9% and 2%, respectively. The growth in average current loans and acceptances was led by continued strong double-digit growth in the core commercial and industrial (C&I) loan portfolio. The core C&I portfolio increased by $4.8 billion or 21% from a year ago to $28.5 billion.

During the quarter, the Federal Deposit Insurance Corporation released their annual deposit market share results. In the Chicago area we maintained our strong second place ranking, with deposit market share of 12.1%. In Wisconsin we also held the second place ranking with an even higher deposit market share of 13.6%. We maintained our number four market share ranking within our primary footprint of Wisconsin, Illinois, Missouri, Kansas, Indiana, and Minnesota.

Wealth Management

Net income was $226 million. Adjusted net income was $253 million compared to $318 million a year ago. The prior year included a $121 million after-tax security gain. On a basis that excludes the security gain, adjusted net income increased $56 million or 28%. On this basis, adjusted net income in traditional wealth of $136 million increased $8 million or 6% with good organic growth as well as growth from the acquired F&C business, offset by higher than run-rate expenses including the settlement of a legal matter. Adjusted net income in insurance was $117 million, up $48 million or 68% from a year ago. The increase in insurance was primarily due to the impact of beneficial changes in actuarial reserves. There was continued growth in both the underlying creditor and life insurance business.

Assets under management and administration grew by $242 billion or 44% from a year ago to $794 billion, with the acquired F&C business contributing $150 billion to the increase. Excluding F&C, assets under management and administration grew by 17%, driven by market appreciation, the stronger U.S. dollar and growth in new client assets.

In September, World Finance Magazine named BMO Harris Private Banking "Best Private Bank - Canada, 2014." This is the fourth consecutive year receiving this honour. The World Finance Banking Awards 2014 recognized BMO Harris Private Banking for strong performance, an in-depth understanding of the needs of clients, exceptional client service and strong community activities and outreach programs that support the local and regional community.

BMO Capital Markets

Net income of $191 million decreased $26 million or 12% from a year ago as higher revenue was more than offset by higher expenses and lower loan recoveries. Revenue increased 2% year over year with solid growth from Investment and Corporate Banking, partly offset by lower revenues in Trading Products, including the introduction of a funding valuation adjustment which reduced revenue by $39 million.

In the quarter, we were recognized for several different industry awards which reflect our continued focus on meeting our core clients' needs. We were selected as a 2014 Greenwich Quality Leader in Canadian Fixed Income Research, Canadian Mergers & Acquisitions and Canadian Equity Capital Markets, as well as a Greenwich Share Leader in Canadian Fixed Income, Canadian Investment Banking Market Penetration, and Canadian Large Corporate Cash Management Market Penetration. In addition, for the fourth consecutive year, we were named the 2014 award winner for Best Bank in Canadian Dollar Foreign Exchange by FX Week.

BMO Capital Markets participated in 331 new global issues in the quarter, comprised of 129 corporate debt deals, 129 government debt deals and 73 equity transactions, raising $791 billion.

Corporate Services

Corporate Services reported and adjusted net loss for the fourth quarter of 2014 was $39 million, compared with a reported net loss of $14 million and an adjusted net loss of $22 million a year ago. The decline was due to lower recoveries primarily on the purchased credit impaired loan portfolio, partially offset by above trend revenue.

Adjusted Net Income

Adjusted net income was $1,111 million, for the fourth quarter of 2014, up $23 million or 2% from a year ago. Adjusted EPS were $1.63, up $0.01 or 1% from 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 fourth quarter 2014 results in the determination of adjusted results were the amortization of acquisition-related intangible assets of $42 million ($32 million after tax) and acquisition integration costs of $11 million ($9 million after tax); or a total impact of $0.07 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.

Caution

The foregoing sections contain forward-looking statements. Please see the Caution Regarding Forward-Looking Statements.

Financial Review

The Financial Review commentary is as of December 2, 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 Financial Review should be read in conjunction with the unaudited interim consolidated financial statements for the period ended October 31, 2014, included in this document, as well as the audited consolidated financial statements for the year ended October 31, 2014, and Management's Discussion and Analysis (MD&A) for fiscal 2014. 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's Audit and Conduct Review Committee reviewed this document and Bank of Montreal's Board of Directors approved the document prior to its release.

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.

Press release: http://mwne.ws/1tKHLKn

INVESTOR AND MEDIA PRESENTATION

Investor Presentation Materials

Interested parties are invited to visit our website at www.bmo.com/investorrelations to review our 2014 annual MD&A and audited annual consolidated financial statements, 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, December 2, 2014, 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 23, 2015, 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.

Contact Information

Media Relations Contacts
Ralph Marranca, Toronto
ralph.marranca@bmo.com
416-867-3996

Ronald Monet, Montreal
ronald.monet@bmo.com
514-877-1873

Investor Relations Contacts
Sharon Haward-Laird
Head, Corporate Communications and Investor Relations
sharon.hawardlaird@bmo.com
416-867-6656

Andrew Chin
Director, Investor Relations
andrew.chin@bmo.com
416-867-7019

Chief Financial Officer
Tom Flynn
tom.flynn@bmo.com
416-867-4689

Corporate Secretary
Barbara Muir
corp.secretary@bmo.com
416-867-6423





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