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26.02.2019 12:01
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BMO Financial Group Reports First Quarter 2019 Results
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PR Newswire
TORONTO, Feb. 26, 2019
Financial Results Highlights
First Quarter 2019 Compared With First Quarter 2018:
- Net income1 of $1,510 million, up 55%; adjusted net income2 of $1,538 million, up 8%
- Net revenue3,4 of $5,591 million, up 6%
- EPS5 of $2.28, up 59%; adjusted EPS2,5 of $2.32, up 10%
- ROE of 13.6%; adjusted ROE2 of 13.9% unchanged from the prior year
- Provision for credit losses (PCL) of $137 million, compared with $141 million in the prior year
- Common Equity Tier 1 Ratio of 11.4%
TORONTO, Feb. 26, 2019 /PRNewswire/ - For the first quarter ended January 31, 2019, BMO Financial Group (TSX:BMO) (NYSE:BMO) recorded net income of $1,510 million or $2.28 per share on a reported basis, and net income of $1,538 million or $2.32 per share on an adjusted basis.
"BMO's good performance this quarter reflects the benefits of our diversified and attractive business mix which continues to deliver sustainable growth, with adjusted earnings per share up 10% from last year. Our North American P&C banking businesses performed very well, particularly across our U.S. platform and in commercial banking, reflecting strong performance against solid economic fundamentals in Canada and the United States and a credit environment that remains strong and stable, while our market-sensitive businesses were impacted by the challenging revenue environment earlier in the quarter," said Darryl White, Chief Executive Officer, BMO Financial Group.
"Across our businesses, we are accelerating growth on both sides of the balance sheet, by serving more customers, expanding relationships and delivering more value while maintaining our consistent and disciplined risk and underwriting practices. We continue to invest in our digital and innovation agenda for the benefit of our customers and to create sustainable efficiency and positive operating leverage, which we achieved once again this quarter. We are well-positioned to build on our performance through the year," concluded Mr. White.
Reported net income in the first quarter of 2018 included a $425 million charge due to the revaluation of our U.S. net deferred tax asset as a result of the enactment of the U.S. Tax Cuts and Jobs Act.
Return on equity (ROE) was 13.6%, up from 9.4% in the prior year and adjusted ROE was 13.9%, unchanged from the prior year. Return on tangible common equity (ROTCE) was 16.5%, compared with 11.5% in the prior year and adjusted ROTCE was 16.6%, down from 16.7% in the prior year.
Concurrent with the release of results, BMO announced a second quarter 2019 dividend of $1.00 per common share, unchanged from the preceding quarter and up $0.07 per share or 8% from the prior year. The quarterly dividend of $1.00 per common share is equivalent to an annual dividend of $4.00 per common share.
Our complete First Quarter 2019 Report to Shareholders, including our unaudited interim consolidated financial statements for the period ended January 31, 2019, is available online at www.bmo.com/investorrelations and at www.sedar.com.
| (1) | Reported net income in the first quarter of 2018 included a $425 million charge due to the revaluation of our U.S. net deferred tax asset as a result of the enactment of the U.S. Tax Cuts and Jobs Act. |
| (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. Adjusted results and measures are non-GAAP and are detailed for all reported periods in the Non-GAAP Measures section, where such non-GAAP measures and their closest GAAP counterparts are disclosed. |
| (3) | Net revenue is reported on a basis that nets insurance claims, commissions and changes in policy benefit liabilities (CCPB) against insurance revenue. |
| (4) | Effective the first quarter of 2019, the bank adopted IFRS 15, Revenue from Contracts with Customers (IFRS 15) and elected to retrospectively present prior periods as if IFRS 15 had always been applied. As a result, loyalty rewards and cash promotion costs on cards previously recorded in non-interest expense are presented as a reduction in non-interest revenue. In addition, certain out-of-pocket expenses reimbursed to BMO from customers have been reclassified from a reduction in non-interest expense to non-interest revenue. Refer to the Changes in Accounting Policies section on page 23 of our |
| (5) | All Earnings per Share (EPS) measures in this document refer to diluted EPS, unless specified otherwise. EPS is calculated using net income after deducting total preferred share dividends. |
| Note: All ratios and percentage changes in this document are based on unrounded numbers. | |
First Quarter Operating Segment Overview
Canadian P&C
Reported net income of $647 million increased $1 million and adjusted net income of $648 million increased $2 million from the prior year. Adjusted net income excludes the amortization of acquisition-related intangible assets. Results reflect revenue growth, partially offset by higher expenses and higher provisions for credit losses. Prior year results benefited from a gain.
During the quarter, we received the Top Digital Innovation Award at the 2018 Banking Technology Awards for BMO QuickPay, a new and simple way for customers to pay their bills, utilizing optical character recognition and machine learning capabilities. BMO QuickPay is currently in pilot and is expected to be rolled out by the end of the year. It is designed to help customers avoid missing bill payments and make their day-to-day financial lives easier.
U.S. P&C
Reported net income of $444 million increased $134 million or 43%, and adjusted net income of $454 million increased $133 million or 42% from the prior year. Adjusted net income excludes the amortization of acquisition-related intangible assets.
Reported net income of US$332 million increased US$85 million or 34%, and adjusted net income of US$340 million increased US$84 million or 33% from the prior year largely due to strong revenue growth, the full quarter benefit from U.S. tax reform and lower provisions for credit losses, partially offset by higher expenses.
During the quarter, BMO Harris Bank was featured on Forbes annual America's Best Employers for Diversity 2019 list, which is based on an independent survey from a sample of more than 50,000 U.S.-based employees. In addition, we enhanced our digital capabilities by launching our new digital banking online and mobile experience to a large portion of our U.S. customers. This new platform will play an important role as we adapt to the continuously evolving needs of our employees and customers.
BMO Wealth Management
Reported net income of $239 million compared with $266 million in the prior year, and adjusted net income of $249 million compared with $276 million. Adjusted net income excludes the amortization of acquisition-related intangible assets. Traditional wealth reported net income of $174 million and adjusted net income of $184 million both decreased $10 million or 6%, reflecting weaker global market conditions. Insurance net income of $65 million was down from a higher level in the prior year.
BMO Global Asset Management was recognized at the 2018 Thomson Reuters Lipper Fund Awards with three BMO Exchange Traded Funds (ETFs) and three BMO Mutual Funds claiming top honours for providing consistently strong, risk-adjusted performance, relative to their peers.
BMO Capital Markets
Reported net income of $255 million and adjusted net income of $262 million compared with $271 million on both a reported and an adjusted basis in the prior year. Adjusted net income excludes amortization of acquisition-related intangible assets and acquisition integration costs in the current quarter. Higher Investment and Corporate Banking revenue was more than offset by higher expenses and provisions for credit losses, and lower Trading Products revenue.
BMO Capital Markets was a lead manager in the largest-ever Sovereign, Supranational Agency bond issue of $1.5 billion in the Canadian market with the World Bank's Sustainable Development Bond, which raised awareness for the benefits of investing in health and nutrition of women, children and adolescents around the world.
Corporate Services
Corporate Services reported and adjusted net loss of $75 million for the quarter compared with a reported net loss of $520 million and an adjusted net loss of $92 million in the prior year. Adjusted results in the prior year exclude a one-time non-cash charge due to the revaluation of our U.S. net deferred tax asset of $425 million.
Adjusted results in this Operating Segment Overview section are non-GAAP amounts or non-GAAP measures. Please see the Non-GAAP Measures section.
Capital
BMO's Common Equity Tier 1 (CET1) Ratio was 11.4% at January 31, 2019. The CET1 Ratio increased from 11.3% at the end of the fourth quarter as retained earnings growth, higher accumulated other comprehensive income from unrealized gains on securities and other smaller items, more than offset strong business growth, impacts from regulatory changes and share repurchases during the quarter.
Provision for Credit Losses
Total provision for credit losses was $137 million, a decrease of $4 million from the prior year. The provision for credit losses on impaired loans of $127 million decreased $47 million from $174 million in the prior year, primarily due to lower provisions in the U.S. P&C business, in part due to a recovery in the current quarter. There was a $10 million provision for credit losses on performing loans in the quarter, compared with a recovery of credit losses of $33 million in the prior year.
Caution
The foregoing sections contain forward-looking statements. Please see the Caution Regarding Forward-Looking Statements.
Regulatory Filings
Our continuous disclosure materials, including our interim filings, annual Management's Discussion and Analysis 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.
Non-GAAP Measures
Results and measures in this document are presented on a GAAP basis. 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. They are also presented on an adjusted basis that excludes the impact of certain items as set out in the table below. Results and measures that exclude the impact of Canadian/U.S. dollar exchange rate movements on our U.S. segment are non-GAAP measures (please see the Foreign Exchange section for a discussion of the effects of changes in exchange rates on our results). Management assesses performance on a reported basis and on an adjusted basis and considers both to be useful in assessing underlying ongoing business performance. Presenting results on both bases provides readers with a better understanding of how management assesses results. It also permits readers to assess the impact of certain specified items on results for the periods presented, and to better assess results excluding those items that may not be reflective of ongoing results. As such, the presentation may facilitate readers' analysis of trends. Except as otherwise noted, management's discussion of changes in reported results in this document applies equally to changes in corresponding adjusted results. 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.
Non-GAAP Measures
| (Canadian $ in millions, except as noted) | Q1-2019 | Q4-2018 | Q1-2018 |
| Reported Results | | | |
| Revenue | 6,517 | 5,893 | 5,638 |
| Insurance claims, commissions and changes in policy benefit liabilities (CCPB) | (926) | (390) | (361) |
| Revenue, net of CCPB | 5,591 | 5,503 | 5,277 |
| Total provision for credit losses | (137) | (175) | (141) |
| Non-interest expense | (3,557) | (3,193) | (3,400) |
| Income before income taxes | 1,897 | 2,135 | 1,736 |
| Provision for income taxes | (387) | (438) | (763) |
| Net income | 1,510 | 1,697 | 973 |
| EPS ($) | 2.28 | 2.58 | 1.43 |
| Adjusting Items (Pre-tax) (1) | | | |
| Acquisition integration costs (2) | (6) | (18) | (4) |
| Amortization of acquisition-related intangible assets (3) | (31) | (31) | (28) |
| Benefit from the remeasurement of an employee benefit liability (4) | - | 277 | - |
| Adjusting items included in reported pre-tax income | (37) | 228 | (32) Werbung Mehr Nachrichten zur Bank Of Montreal CD 2 Aktie kostenlos abonnieren
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