BMO Financial Group Reports Net Income of $1.1 Billion for the Second Quarter of 2014
Financial Results Highlights:
Second Quarter 2014 Compared with Second Quarter 2013:
-- Net income of $1,076 million, up 12%; adjusted net income(1) of $1,097 million, up 11%
-- EPS(2) of $1.60, up 14%; adjusted EPS(1, 2) of $1.63, up 13%
-- ROE of 14.3%, compared with 14.2%; adjusted ROE(1) of 14.6%, unchanged
-- Provisions for credit losses of $162 million, compared with $144 million; adjusted provisions for credit losses(1) of $162 million, compared with $109 million
-- Basel III Common Equity Ratio of 9.7%
-- Dividend increased by $0.02 or 3% to $0.78 per common share
Year-to-Date 2014 Compared with Year-to-Date 2013:
-- Net income of $2,137 million, up 7%; adjusted net income(1) of $2,180 million, up 8%
-- EPS(2) of $3.18, up 9%; adjusted EPS (1,2) of $3.24, up 10%
-- ROE of 14.3%, compared with 14.6%; adjusted ROE(1) of 14.6%, compared with 14.7%
-- Provisions for credit losses of $261 million, compared with $322 million; adjusted provisions for credit losses(1) of $261 million, compared with $205 million
For the second quarter ended April 30, 2014, BMO Financial Group reported net income of $1,076 million or $1.60 per share on a reported basis and net income of $1,097 million or $1.63 per share on an adjusted basis.
“Our customer-focused strategy continued to deliver strong performance and momentum across our operating groups,” said Bill Downe, Chief Executive Officer, BMO Financial Group. "Our largest business, Canadian Personal and Commercial banking, had net income growth of 14% year over year and operating leverage above 2% for the third consecutive quarter. Commercial loan growth remained robust in Canada and the United States as we continue to see benefits from our large North American platform.
"Wealth Management and BMO Capital Markets also had strong results in the second quarter, both posting double-digit revenue and earnings growth.
"Shortly after quarter-end, we closed the acquisition of F&C Asset Management. The acquisition advances BMO Global Asset Management's strategy and growth trajectory, effectively doubling client assets. Today, our asset management business has 24 offices that are strategically located across the globe serving an increasingly global client base.
“For the quarter and year to date, continuing business momentum is reflected in positive operating leverage and good balance sheet growth. Adjusted earnings per share in the quarter were up 13% over last year,” 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 third quarter 2014 dividend of $0.78 per common share, up $0.02 per share from the preceding quarter and up $0.04 per share from a year ago, equivalent to an annual dividend of $3.12 per common share.
Our complete Second Quarter 2014 Report to Shareholders, including our unaudited interim consolidated financial statements for the period ended April 30, 2014, is available online at www.bmo.com/investorrelations and at www.sedar.com.
Total Bank Overview
Net income was $1,076 million for the second quarter of 2014, up $114 million or 12% from a year ago.
Adjusted net income was $1,097 million, up $113 million or 11% from a year ago. Momentum continued with strong results in Canadian P&C, Wealth Management and BMO Capital Markets, and U.S. P&C results that reflected stable revenue compared to last quarter.
Operating Segment Overview
Canadian P&C
Net income was $480 million, up $59 million or 14% from a year ago. Adjusted net income was $482 million, up $60 million or 14% from the prior year driven by higher revenue and lower credit losses. Revenue was up $87 million or 6% year over year driven by strong balance and fee volumes, partially offset by the impact of lower net interest margin. There was year-over-year loan growth of 9% and deposit growth of 10%. Expenses increased $20 million or 3%.
In personal banking, year-over-year personal loan and deposit growth remains strong at 9% and 10%, respectively. During the quarter we upgraded our BMO mobile banking application, which provides customers with enhanced capabilities including the ability to send Interac® e-Transfers and book branch appointments anywhere, anytime. The updated application has been well received by our customers, and mobile transactions have nearly doubled since its release.
In commercial banking, we continue to streamline our processes, enabling our salesforce to spend more time acquiring new customers and strengthening existing relationships. Volume growth continues to be strong with year-over-year loan and deposit growth of 10% and 9%, respectively. We remain second in Canadian business banking loan market share for small and medium-sized loans.
U.S. P&C (all amounts in US$)
Net income of $140 million and adjusted net income of $151 million both decreased $8 million or 6% from the second quarter a year ago. The benefits from strong commercial loan growth and lower provisions for credit losses were more than offset by the effects of lower net interest margin and reduced gains on sales of newly originated mortgages.
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 $4.2 billion or 19% from a year ago to $26.3 billion.
To demonstrate our commitment to providing financial literacy outreach to the communities in which we serve, we sponsored multiple financial education and homeownership workshops throughout our markets as part of the Federal Reserve Bank's Money Smart Week. In addition, we recently partnered with the Chicago Office of the City Treasurer and the Canadian Foundation for Economic Education to launch Talk With Our Kids About Money Day, which encourages families, students and teachers to have conversations about money and personal finance.
Wealth Management
Net income of $194 million increased $54 million or 38% from a year ago. Adjusted net income of $200 million increased $53 million or 36%. Adjusted net income in traditional wealth was $139 million, up $27 million or 23% resulting from strong growth in client assets. Adjusted net income in insurance was $61 million, up $26 million from a year ago.
Assets under management and administration grew by $91 billion or 17% from a year ago to $612 billion, driven by market appreciation, the stronger U.S. dollar and growth in new client assets.
This past quarter, BMO's wealth businesses received a number of awards from Global Banking and Finance Review, including:
BMO Harris Private Banking was named Best Private Bank in Canada for the fourth consecutive year; BMO Nesbitt Burns was named Best Full Service Investment Advisory in Canada; and BMO Private Bank Asia was named Best New Private Bank in Hong Kong and Best New Private Bank in Singapore.
On May 7, 2014, we announced that we had completed the acquisition of F&C Asset Management plc (F&C). This acquisition strengthens BMO Global Asset Management's position as a globally significant money manager, enhancing its investment platform capabilities and providing attractive opportunities to service wealth markets in the United Kingdom and the rest of Europe.
BMO Capital Markets
Net income of $305 million increased $44 million or 17% from a year ago due to good revenue growth across the businesses and a more favourable tax rate. Revenue increased 14% year over year, driven by good performance in both the Investment and Corporate Banking and the Trading Products businesses and continued good contribution from our U.S. segment. Return on equity of 20.8% was strong, up from 18.3% in the prior year.
Our continued focus on understanding and meeting our core clients‘ needs was rewarded, having been named World’s Best Metals and Mining Investment Bank for the fifth consecutive year by Global Finance magazine this quarter. This focus also contributed to our selection as a 2014 Greenwich Share Leader in Canadian Foreign Exchange Market Share.
BMO Capital Markets participated in 372 new global issues in the quarter, comprised of 172 corporate debt deals, 131 government debt deals and 69 equity transactions, raising $822 billion.
Corporate Services
Corporate Services net loss on a reported and adjusted basis was $58 million for the second quarter of 2014, compared with a net loss of $11 million a year ago. The decline in results was primarily due to lower recoveries on the purchased credit impaired loan portfolio.
Adjusted Net Income
Adjusted net income was $1,097 million for the second quarter of 2014, up $113 million or 11% from a year ago. Adjusted earnings per share were $1.63, up 13% from $1.44 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 only item excluded from second quarter 2014 results in the determination of adjusted results was the amortization of acquisition-related intangible assets of $28 million ($21 million after tax; $0.03 per share). Amounts excluded from adjusted results in prior years also included credit-related items in respect of the purchased performing loan portfolio, acquisition integration costs, 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.
Caution
The foregoing sections contain forward-looking statements. Please see the Caution Regarding Forward-Looking Statements.
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.
Management's Discussion and Analysis
Management‘s Discussion and Analysis (MD&A) commentary is as of May 28, 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 April 30, 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 April 30, 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 April 30, 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.
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.
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.
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2016년 2월 25일 08:29