BMO's Third Quarter 2021 Report to Shareholders, including the
unaudited interim consolidated financial statements for the period
ended July 31, 2021, is available online at
www.bmo.com/investorrelations and at www.sedar.com.
Financial Results Highlights
Third Quarter 2021 Compared With Third Quarter 2020:
- Net income of $2,275 million,
an increase of 85%; adjusted net income1,4 of
$2,292 million, an increase of
82%
- Reported EPS2 of $3.41, an increase of 89%; adjusted
EPS1,2,4 of $3.44, an
increase of 86%
- Recovery of credit losses of $70
million, compared with a provision for credit losses (PCL)
of $1,054 million
- Reported net efficiency ratio3 of 56.0%,
compared with 57.4%; adjusted net efficiency ratio1,3,4
of 55.7%, compared with 56.8%
- Return on equity (ROE) of 17.5%, an increase from 9.4%;
adjusted ROE1,4 of 17.6%, an increase from 9.6%
- Common Equity Tier 1 Ratio of 13.4%, an increase from 11.6%
in the prior year
Year-to-Date 2021 Compared With Year-to-Date 2020:
- Net income of $5,595 million,
an increase of 59%; adjusted net income1,4,5 of
$6,425 million, an increase of
79%
- Reported EPS2 of $8.35, an increase of 61%; adjusted
EPS1,2,4,5 of $9.63, an
increase of 82%
- PCL of $146 million, compared
with $2,521 million
- Reported net efficiency ratio3 of 60.6%,
compared with 60.8%; adjusted net efficiency
ratio1,3,4,5 of 56.2%, compared with 60.2%
- ROE of 14.5%, an increase from 9.3%; adjusted
ROE1,4,5 of 16.7%, an increase from 9.5%
TORONTO, Aug. 24, 2021 /PRNewswire/ - For the third
quarter ended July 31, 2021, BMO
Financial Group (TSX:BMO) (NYSE:BMO) recorded net income of
$2,275 million or $3.41 per share on a reported basis, and net
income of $2,292 million or
$3.44 per share on an adjusted
basis.
"Operating momentum across our diversified businesses continues
to drive strong financial performance. We recorded third quarter
adjusted earnings per share of $3.44,
with strong pre-provision pre-tax earnings of $2.9 billion, up 12% year-over-year, driven by
revenue growth of 10%," said Darryl
White, Chief Executive Officer, BMO Financial Group.
"We are executing strategies and investing in our businesses to
deliver strong returns and efficiency improvements, which this
quarter, delivered positive operating leverage of 2.1%, an
efficiency ratio of 55.7%, a 110 basis point improvement from last
year, and return on equity of 17.6%. Our leadership in risk and
balance sheet management remains a key differentiator and
contributed to continued strong credit metrics and a robust capital
position with a CET1 ratio of 13.4%."
"Our consistent financial performance enables us to deliver on
our vision for a sustainable future. This quarter, we continued to
advance our work to address the impact of climate change and
champion inclusivity, and made a long-term pledge to supporting the
development of affordable housing. With the economic recovery
continuing to take hold, and as communities adapt to the most
recent pandemic developments, we are committed to helping our
clients make real financial progress and supporting their growth
ambitions." concluded Mr. White.
(1)
|
Results and measures
in this document are presented on a GAAP basis. They are also
presented on an adjusted basis that excluded 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.
|
(2)
|
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 dividends on preferred shares and
distributions payable on other equity instruments.
|
(3)
|
On a basis that nets
insurance claims, commissions and changes in policy benefit
liabilities (CCPB) against insurance revenue.
|
(4)
|
Q3-2021 reported net
income included expenses of $18 million ($24 million pre-tax) from
the impact of divestitures related to the announced sale of our
EMEA Asset Management business and the sale of our Private Banking
business in Hong Kong and Singapore, offset by a partial reversal
of restructuring charges recorded in Q4-2019 related to severance
of $18 million ($24 million pre-tax), all recorded in non-interest
expense, in Corporate Services.
|
(5)
|
Q2-2021 reported net
income included a $747 million pre-tax and after-tax write-down of
goodwill related to the announced sale of our EMEA Asset Management
business, a $22 million ($29 million pre-tax) net gain on
the sale of our Private Banking business in Hong Kong and
Singapore, and $47 million ($53 million pre-tax) of
divestiture-related costs for both transactions. The net gain on
the sale was included in revenue with the goodwill write-down and
divestiture costs included in non-interest expense, all recorded in
Corporate Services.
|
Note: All ratios and
percentage changes in this document are based on unrounded
numbers.
|
Adjusted results in the current quarter excluded the impact of
divestitures and a partial reversal of restructuring charges
recorded in the fourth quarter of 2019, related to
severance. Adjusted results also excluded the amortization of
acquisition-related intangible assets and acquisition integration
costs in both the current and prior years. Reported and adjusted
net income increased from the prior year, driven by net
revenue growth of 10%, higher expenses, including higher
performance-based compensation reflective of strong revenue, and
the impact of lower provisions for credit losses. Net income
increased across all operating groups.
Return on equity (ROE) was 17.5%, an increase from 9.4% in the
prior year, and adjusted ROE was 17.6%, an increase from 9.6%.
Reported and adjusted return on tangible common equity (ROTCE) were
both 19.8% in the current quarter, an increase from 11.1% on both a
reported and an adjusted basis in the prior year.
Concurrent with the release of results, BMO announced a fourth
quarter 2021 dividend of $1.06 per
common share, unchanged from the prior quarter and the prior year.
The quarterly dividend of $1.06 per
common share is equivalent to an annual dividend of $4.24 per common share.
Third Quarter Performance Review
Canadian P&C
Reported and adjusted net income
were $815 million, both increasing
$496 million from the prior year.
Results were driven by a 14% increase in revenue with higher net
interest income and non-interest revenue, higher expenses and a
decrease in the provision for credit losses.
During the quarter, we were named Best Commercial Bank in
Canada by World Finance
magazine for the seventh consecutive year, recognized for our
innovative and client-centric approach, commitment to digital
transformation and experience, and holistic understanding of market
trends and changing client needs – especially during the COVID-19
pandemic. This award speaks to our continued focus and commitment
to our clients, and our expertise across industries to meet
clients' evolving and unique needs. In addition, to help our
business clients through the challenging times brought on by the
pandemic, we extended our Lifeworks Wellness Assistance Program to
Canadian Business Banking clients across Canada, at no additional cost.
U.S. P&C
Reported net income was $553 million, an increase of $290 million from the prior year, and adjusted
net income was $559 million, an
increase of $286 million.
Reported net income was US$448
million, an increase of US$256
million from the prior year, and adjusted net income was
US$453 million, an increase of US$254
million. Results were driven by a 7% increase in revenue
with higher net interest income and non-interest revenue, modestly
higher expenses and a decrease in the provision for credit
losses.
During the quarter, BMO Harris Bank and Lively, Inc. (Lively),
creators of the modern Health Savings Account (HSA), announced that
they will bring a modern HSA experience to eligible individual BMO
customers and commercial banking clients. Beginning this fall, new
HSAs will be delivered by Lively, providing BMO customers with a
more engaging HSA experience, designed to help them make real
financial progress through more powerful health savings tools.
BMO Wealth Management
Reported net income was
$401 million, an increase of
$60 million or 18% from the prior
year, and adjusted net income was $406
million, an increase of $57
million or 16%. Results were driven by an 11% increase in
net revenue, partially offset by higher expenses. Traditional
Wealth reported net income was $328
million, an increase of $57
million or 21%, and adjusted net income was $333 million, an increase of $54 million
or 19%, driven by higher revenue, primarily from growth in
client assets, including stronger global markets, partially offset
by higher expenses. Insurance net income was $73 million,
relatively unchanged from the prior year.
BMO has been recognized as the Best Private Bank by World
Finance magazine for the eleventh consecutive year. This award
speaks to BMO Private Wealth's dedicated support to our
clients and their families, as they navigate the complexity of
managing their wealth during times of uncertainty. In addition, BMO
Global Asset Management (BMO GAM) Canada was recognized at the Responsible
Investment Association's 2021 Leadership Awards, receiving top
honours in the Stewardship and Market Education categories.
BMO GAM won the Stewardship Award for our work to
accelerate Canadian diversity and inclusion beyond gender, and the
Market Education Award for the development and launch of
the MyESGTM analytics tool, a
first-of-its-kind self-assessment tool that enables financial
advisors to better achieve our clients' ESG objectives.
BMO Capital Markets
Reported net income was
$558 million, an increase of
$132 million or 31% from the prior
year, and adjusted net income was $564
million, an increase of $129
million or 30%. Results were driven by continued strong
revenue performance, with higher Investment and Corporate Banking
revenue partially offset by lower Global Markets revenue, higher
expenses driven by increased performance-based compensation, and a
recovery of credit losses, compared with elevated levels of
provisions in the prior year.
During the quarter, BMO Capital Markets announced it is
establishing a dedicated Energy Transition Group to support our
clients in their pursuit of energy transition opportunities. This
new group is expected to accelerate BMO Capital Markets'
participation in the economy's energy transition by providing
knowledge, tools and support our industry groups as we engage with
clients on their energy transition endeavors. We also continue
to leverage our deep industry expertise and insights across
different sectors to support our clients, and acted as left lead
arranger and left lead bookrunner to support OMERS' buyout of
Gastro Health.
Corporate Services
Reported and adjusted net loss for
the quarter were $52 million,
compared with a reported and adjusted net loss of $117 million in the prior year. Adjusted results
increased due to higher revenue, driven by higher securities gains
and treasury-related activities, partially offset by higher
expenses.
Adjusted results in this Third Quarter Performance Review
section are non-GAAP amounts or non-GAAP measures. Please refer to
the Non-GAAP Measures section.
The order in which the impact on net income is discussed in this
section, and elsewhere in the MD&A, follows the order of
revenue, expenses and provision for credit losses, regardless of
their relative impact.
Capital
BMO's Common Equity Tier 1 (CET1) Ratio was
13.4% as at July 31, 2021, an
increase from 13.0% at the end of the second quarter of fiscal
2021, driven by retained earnings growth.
Credit Quality
Total recovery of credit losses was $70
million, compared with a provision for credit losses of
$1,054 million in the prior year. The
total recovery of credit losses ratio was 6 basis points, compared
with a provision for credit losses ratio of 89 basis points in the
prior year. The provision for credit losses on impaired loans was
$71 million, a decrease of
$375 million from $446 million in the prior year, largely due to
lower commercial provisions in our P&C businesses, and in BMO
Capital Markets. The provision for credit losses on impaired loans
ratio was 6 basis points, compared with 38 basis points in the
prior year. There was a $141 million recovery of credit losses
on performing loans in the current quarter, compared with a
$608 million provision in the prior
year. The $141 million recovery of
credit losses in the current quarter reflected an improving
economic outlook and positive credit migration, partially offset by
the impact of the uncertain economic environment on future credit
conditions, as well as balance growth, while the $608 million
provision in the prior year reflected the impact of the
extraordinary and highly uncertain environment on credit
conditions, the economy and scenario weights.
Refer to the Accounting Policies and Critical Accounting
Estimates section and Note 3 in our unaudited interim consolidated
financial statements for further information on the allowance for
credit losses as at July 31,
2021.
Supporting a Sustainable and Inclusive Recovery
At
BMO, we have a long-standing commitment to support a sustainable
future, a thriving economy and an inclusive society, and we are
acting with purpose. In support of our customers, communities and
employees, BMO recently:
- Announced a $12 billion
commitment to finance affordable housing in Canada over a 10-year period.
- Deployed loans and investments as part of BMO
EMpowerTM, a US$5 billion
commitment over five years to address key barriers faced by
minority businesses, communities and families in the United States.
- Pledged $200,000 in grants to
women-owned businesses in Canada
and the United States through BMO
Celebrating Women, a bank-owned recognition program for women in
North America.
- Continued to support economic self-sufficiency of Indigenous
communities, creating a long-term partnership with the Native
Women's Association of Canada and
making eLearning available to help foster greater understanding of
Indigenous perspectives through education.
- Assisted customers experiencing financial hardship caused by
the COVID-19 pandemic, including facilitating access to relief
programs introduced by the Canadian and U.S. governments, such as
the Canada Emergency Business
Account (CEBA) program, the Highly Affected Sector Credit
Availability Program (HASCAP) and the Trade Expansion Lending
Program (TELP) in Canada, and the
Paycheck Protection Program (PPP) in the
United States.
Regulatory Filings
BMO's continuous disclosure
materials, including interim filings, annual Management's
Discussion and Analysis and audited annual 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 U.S. Securities and Exchange Commission's website at
www.sec.gov. Information contained in or otherwise accessible
through our website (www.bmo.com), or any third party websites
mentioned herein, does not form part of this document.
Caution
The extent to which the COVID-19 pandemic
impacts BMO's business, results of operations, reputation,
financial performance and condition, including the potential for
credit, counterparty and mark-to-market losses, its credit ratings
and regulatory capital and liquidity ratios, as well as impacts to
its customers and competitors, will depend on future developments.
Such developments are highly uncertain and cannot be predicted,
including the scope, severity and duration of the pandemic and
actions taken by third parties, governments, and governmental and
regulatory authorities, which could vary by country and region. The
COVID-19 pandemic may also impact the bank's ability to achieve, or
the timing to achieve, certain previously announced targets, goals
and objectives. For additional information, refer to the Top and
Emerging Risks That May Affect Future Results section on page 34 in
our Third Quarter 2021 Report to Shareholders.
The foregoing sections contain forward-looking statements.
Please refer to the Caution Regarding Forward-Looking
Statements.
|
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 excluded the
impact of certain items, as set out in the table below. Please
refer to the Foreign Exchange section in our Third Quarter 2021
Report to Shareholders for a discussion of the effects of changes
in exchange rates on BMO's results. Pre-provision pre-tax earnings
(PPPT) is a non-GAAP measure, and is calculated as the difference
between revenue, net of insurance claims, commissions and changes
in policy benefit liabilities (CCPB), and non-interest expense.
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 the corresponding
adjusted results. Adjusted results and measures are non-GAAP and as
such do not have standardized meanings 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)
|
Q3-2021
|
Q2-2021
|
Q3-2020
|
YTD-2021
|
YTD-2020
|
Reported
Results
|
|
|
|
|
|
Revenue
|
7,562
|
6,076
|
7,189
|
20,613
|
19,200
|
Insurance claims,
commissions and changes in policy benefit liabilities
(CCPB)
|
(984)
|
283
|
(1,189)
|
(1,302)
|
(1,708)
|
Revenue, net of
CCPB
|
6,578
|
6,359
|
6,000
|
19,311
|
17,492
|
Total provision for
credit losses
|
70
|
(60)
|
(1,054)
|
(146)
|
(2,521)
|
Non-interest
expense
|
(3,684)
|
(4,409)
|
(3,444)
|
(11,706)
|
(10,629)
|
Income before income
taxes
|
2,964
|
1,890
|
1,502
|
7,459
|
4,342
|
Provision for income
taxes
|
(689)
|
(587)
|
(270)
|
(1,864)
|
(829)
|
Net income
|
2,275
|
1,303
|
1,232
|
5,595
|
3,513
|
EPS ($)
|
3.41
|
1.91
|
1.81
|
8.35
|
5.18
|
Adjusting Items
(Pre-tax) (1)
|
|
|
|
|
|
Acquisition
integration costs (2)
|
(3)
|
(2)
|
(5)
|
(8)
|
(11)
|
Amortization of
acquisition-related intangible assets (2)
|
(19)
|
(24)
|
(32)
|
(68)
|
(91)
|
Impact of
divestitures (3) (4)
|
(24)
|
(771)
|
-
|
(795)
|
-
|
Restructuring costs
(reversals) (4)
|
24
|
-
|
-
|
24
|
-
|
Adjusting items
included in reported pre-tax income
|
(22)
|
(797)
|
(37)
|
(847)
|
(102)
|
Adjusting Items
(After tax) (1)
|
|
|
|
|
|
Acquisition
integration costs (2)
|
(2)
|
(2)
|
(4)
|
(6)
|
(8)
|
Amortization of
acquisition-related intangible assets (2)
|
(15)
|
(18)
|
(23)
|
(52)
|
(70)
|
Impact of
divestitures (3) (4)
|
(18)
|
(772)
|
-
|
(790)
|
-
|
Restructuring costs
(reversals) (4)
|
18
|
-
|
-
|
18
|
-
|
Adjusting items
included in reported net income after tax
|
(17)
|
(792)
|
(27)
|
(830)
|
(78)
|
Impact on EPS
($)
|
(0.03)
|
(1.22)
|
(0.04)
|
(1.28)
|
(0.12)
|
Adjusted
Results
|
|
|
|
|
|
Revenue
|
7,562
|
6,047
|
7,189
|
20,584
|
19,200
|
Insurance claims,
commissions and changes in policy benefit liabilities
(CCPB)
|
(984)
|
283
|
(1,189)
|
(1,302)
|
(1,708)
|
Revenue, net of
CCPB
|
6,578
|
6,330
|
6,000
|
19,282
|
17,492
|
Total provision for
credit losses
|
70
|
(60)
|
(1,054)
|
(146)
|
(2,521)
|
Non-interest
expense
|
(3,662)
|
(3,583)
|
(3,407)
|
(10,830)
|
(10,527)
|
Income before income
taxes
|
2,986
|
2,687
|
1,539
|
8,306
|
4,444
|
Provision for income
taxes
|
(694)
|
(592)
|
(280)
|
(1,881)
|
(853)
|
Net income
|
2,292
|
2,095
|
1,259
|
6,425
|
3,591
|
EPS ($)
|
3.44
|
3.13
|
1.85
|
9.63
|
5.30
|
|
|
(1)
|
Adjusting items are
generally included in Corporate Services, with the exception of the
amortization of acquisition-related intangible assets and certain
acquisition integration costs, which are charged to the operating
groups.
|
(2)
|
These amounts were
charged to the non-interest expense of the operating groups.
Before-tax and after-tax amounts for each operating group are
provided on pages 20, 22, 24, 26 and 28 of our Third
Quarter 2021 Report to Shareholders.
|
(3)
|
Q2-2021 reported net
income included a $747 million pre-tax and after-tax write-down of
goodwill related to the announced sale of our EMEA Asset Management
business, a $22 million ($29 million pre-tax) net gain on
the sale of our Private Banking business in Hong Kong and
Singapore, and $47 million ($53 million pre-tax) of
divestiture-related costs for both transactions. The net gain on
the sale was included in revenue with the goodwill write-down and
divestiture costs included in non-interest expense, all recorded in
Corporate Services.
|
(4)
|
Q3-2021 reported net
income included expenses of $18 million ($24 million pre-tax) from
the impact of divestitures related to the announced sale of our
EMEA Asset Management business and the sale of our Private Banking
business in Hong Kong and Singapore, offset by a partial reversal
of restructuring charges recorded in Q4-2019 related to severance
of $18 million ($24 million pre-tax), all recorded in non-interest
expense, in Corporate Services.
|
Adjusted results and
measures in this table are non-GAAP amounts or non-GAAP
measures.
|
Summary of Reported and Adjusted Results by Operating
Group
|
|
|
|
BMO
Wealth
|
BMO
Capital
|
Corporate
|
|
(Canadian $ in
millions)
|
Canadian P&C
|
U.S.
P&C
|
Total
P&C
|
Management
|
Markets
|
Services
|
Total
Bank
|
Q3-2021
|
|
|
|
|
|
|
|
Reported net income
(loss)
|
815
|
553
|
1,368
|
401
|
558
|
(52)
|
2,275
|
Acquisition
integration costs (1)
|
-
|
-
|
-
|
-
|
2
|
-
|
2
|
Amortization of
acquisition-related intangible assets (2)
|
-
|
6
|
6
|
5
|
4
|
-
|
15
|
Impact of divestitures
(3)
|
-
|
-
|
-
|
-
|
-
|
18
|
18
|
Restructuring costs
(reversals) (3)
|
-
|
-
|
-
|
-
|
-
|
(18)
|
(18)
|
Adjusted net income
(loss)
|
815
|
559
|
1,374
|
406
|
564
|
(52)
|
2,292
|
Q2-2021
|
|
|
|
|
|
|
|
Reported net income
(loss)
|
764
|
542
|
1,306
|
346
|
563
|
(912)
|
1,303
|
Acquisition
integration costs (1)
|
-
|
-
|
-
|
-
|
2
|
-
|
2
|
Amortization of
acquisition-related intangible assets (2)
|
1
|
5
|
6
|
7
|
5
|
-
|
18
|
Impact of divestitures
(4)
|
-
|
-
|
-
|
-
|
-
|
772
|
772
|
Adjusted net income
(loss)
|
765
|
547
|
1,312
|
353
|
570
|
(140)
|
2,095
|
Q3-2020
|
|
|
|
|
|
|
|
Reported net income
(loss)
|
319
|
263
|
582
|
341
|
426
|
(117)
|
1,232
|
Acquisition
integration costs (1)
|
-
|
-
|
-
|
-
|
4
|
-
|
4
|
Amortization of
acquisition-related intangible assets (2)
|
-
|
10
|
10
|
8
|
5
|
-
|
23
|
Adjusted net income
(loss)
|
319
|
273
|
592
|
349
|
435
|
(117)
|
1,259
|
YTD-2021
|
|
|
|
|
|
|
|
Reported net income
(loss)
|
2,316
|
1,677
|
3,993
|
1,105
|
1,604
|
(1,107)
|
5,595
|
Acquisition
integration costs (1)
|
-
|
-
|
-
|
-
|
6
|
-
|
6
|
Amortization of
acquisition-related intangible assets (2)
|
1
|
18
|
19
|
20
|
13
|
-
|
52
|
Impact of divestitures
(3) (4)
|
-
|
-
|
-
|
-
|
-
|
790
|
790
|
Restructuring costs
(reversals) (3)
|
-
|
-
|
-
|
-
|
-
|
(18)
|
(18)
|
Adjusted net income
(loss)
|
2,317
|
1,695
|
4,012
|
1,125
|
1,623
|
(335)
|
6,425
|
YTD-2020
|
|
|
|
|
|
|
|
Reported net income
(loss)
|
1,380
|
953
|
2,333
|
776
|
708
|
(304)
|
3,513
|
Acquisition
integration costs (1)
|
-
|
-
|
-
|
-
|
8
|
-
|
8
|
Amortization of
acquisition-related intangible assets (2)
|
1
|
30
|
31
|
26
|
13
|
-
|
70
|
Adjusted net income
(loss)
|
1,381
|
983
|
2,364
|
802
|
729
|
(304)
|
3,591
|
|
|
(1)
|
KGS-Alpha and
Clearpool acquisition integration costs before tax amounts of $3
million in Q3-2021, $2 million in Q2-2021, $5 million in Q3-2020;
$8 million for YTD-2021 and $11 million for YTD-2020 are
included in non-interest expense in BMO Capital Markets.
|
(2)
|
Amortization of
acquisition-related intangible assets before tax is charged to the
non-interest expense of the operating groups. Canadian P&C
amounts of $nil in Q3-2021, $1 million in Q2-2021, and $nil in
Q3-2020; $1 million for both YTD-2021 and YTD-2020. U.S. P&C
amounts of $9 million in Q3-2021, $7 million in Q2-2021, and $13
million in Q3-2020; $25 million for YTD-2021 and $40 million for
YTD-2020. BMO Wealth Management amounts of $5 million in Q3-2021,
$10 million in Q2-2021, and $11 million in Q3-2020; $25
million for YTD-2021 and $33 million for YTD-2020. BMO Capital
Markets amounts of $5 million in Q3-2021, $6 million in
Q2-2021, and $8 million in Q3-2020; $17 million for both YTD-2021
and YTD-2020.
|
(3)
|
Q3-2021 reported net
income included expenses of $18 million ($24 million pre-tax) from
the impact of divestitures related to the announced sale of our
EMEA Asset Management business and the sale of our Private Banking
business in Hong Kong and Singapore, offset by a partial reversal
of restructuring charges recorded in Q4-2019 related to severance
of $18 million ($24 million pre-tax), all recorded in non-interest
expense, in Corporate Services.
|
(4)
|
Q2-2021 reported net
income included a $747 million pre-tax and after-tax write-down of
goodwill related to the announced sale of our EMEA Asset Management
business, a $22 million ($29 million pre-tax) net gain on
the sale of our Private Banking business in Hong Kong and
Singapore, and $47 million ($53 million pre-tax) of
divestiture-related costs for both transactions. The net gain on
the sale was included in revenue with the goodwill write-down and
divestiture costs included in non-interest expense, all recorded in
Corporate Services.
|
Adjusted results and
measures in this table are non-GAAP amounts or non-GAAP
measures.
|
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 in this document may include, but are
not limited to, statements with respect to our objectives and
priorities for fiscal 2021 and beyond, our strategies or future
actions, our targets, expectations for our financial condition or
share price, the regulatory environment in which we operate and the
results of or outlook for our operations or for the Canadian, U.S.
and international economies, the expected impact of the COVID-19
pandemic on our business, operations, earnings, results, and
financial performance and condition, as well as its impact on our
customers, competitors, reputation and trading exposures, and
include statements of our management. Forward-looking statements
are typically identified by words such as "will", "would",
"should", "believe", "expect", "anticipate", "project", "intend",
"estimate", "plan", "goal", "target", "may" and "could."
By their nature, forward-looking statements require us to make
assumptions and are subject to inherent risks and uncertainties,
both general and specific in nature. 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. The uncertainty created by
the COVID-19 pandemic has heightened this risk given the increased
challenge in making assumptions, 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 – many of which are beyond our control and the
effects of which can be difficult to predict – 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:
the severity, duration and spread of the COVID-19 pandemic, its
impact on local, national or international economies, and its
heightening of certain risks that may affect our future results;
the possible impact on our business and operations of outbreaks of
disease or illness that affect local, national or international
economies; general economic and market conditions in the countries
in which we operate; information, privacy and cyber security,
including the threat of data breaches, hacking, identity theft and
corporate espionage, as well as the possibility of denial of
service resulting from efforts targeted at causing system failure
and service disruption; changes in monetary, fiscal, or economic
policy, and tax legislation and interpretation; interest rate and
currency value fluctuations, as well as benchmark interest rate
reforms; technological changes and technology resiliency; political
conditions, including changes relating to or affecting economic or
trade matters; the Canadian housing market and consumer leverage;
climate change and other environmental and social risks; weak,
volatile or illiquid capital or credit markets; the level 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, and the effect of such changes on
funding costs; judicial or regulatory proceedings; the accuracy and
completeness of the information we obtain with respect to our
customers and counterparties; failure of third parties to comply
with their obligations to us; our ability to execute our strategic
plans and to complete proposed acquisitions or dispositions,
including obtaining regulatory approvals; critical accounting
estimates and the effect of changes to accounting standards, rules
and interpretations on these estimates; operational and
infrastructure risks, including with respect to reliance on third
parties; changes to our credit ratings; global capital markets
activities; the possible effects on our business of war or
terrorist activities; natural disasters and disruptions to public
infrastructure, such as transportation, communications, power or
water supply; and our ability to anticipate and effectively manage
risks arising from all of the foregoing factors.
We caution that the foregoing list is not exhaustive of all
possible factors. Other factors and risks could adversely affect
our results. For more information, please refer to the discussion
in the Risks That May Affect Future Results section, and the
sections related to credit and counterparty, market, insurance,
liquidity and funding, operational, legal and regulatory,
strategic, environmental and social, and reputation risk, in the
Enterprise-Wide Risk Management section that starts on page 73 of
BMO's 2020 Annual Report, and the Risk Management section that
starts on page 34 of our Third Quarter 2021 Report to Shareholders,
all of which outline certain key factors and risks that may affect
our future results. Investors and others should carefully consider
these factors and risks, as well as other uncertainties and
potential events, and the inherent uncertainty of forward-looking
statements. We do 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.
Material economic assumptions underlying the forward-looking
statements contained in this document are set out in the Economic
Developments and Outlook section on page 18 of BMO's 2020 Annual
Report and updated in the Economic Review and Outlook section set
forth in our Third Quarter 2021 Report to Shareholders, as well as
in the Allowance for Credit Losses section on page 114 of BMO's
2020 Annual Report and the Allowance for Credit Losses section set
forth in our Third Quarter 2021 Report to Shareholders. 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, we primarily
consider historical economic data, past relationships between
economic and financial variables, changes in government policies,
and the risks to the domestic and global economy. Please refer to
the Economic Review and Outlook and Allowance for Credit Losses
sections in our Third Quarter 2021 Report to Shareholders.
INVESTOR AND MEDIA PRESENTATION
Investor Presentation Materials
Interested parties are invited to visit BMO's website at
www.bmo.com/investorrelations to review the 2020 Annual MD&A
and audited annual consolidated financial statements, quarterly
presentation materials and supplementary financial and regulatory
information package.
Quarterly Conference Call and Webcast Presentations
Interested parties are also invited to listen to our quarterly
conference call on Tuesday, August 24,
2021, at 8.15 a.m. (ET). The
call may be accessed by telephone at 416-406-0743 (from within
Toronto) or 1-800-898-3989
(toll-free outside Toronto),
entering Passcode: 1365804#. A replay of the conference call can be
accessed until September 21, 2021, by
calling 905-694-9451 (from within Toronto) or 1-800-408-3053 (toll-free outside
Toronto) and entering Passcode:
9195676#.
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
website.
Shareholder
Dividend Reinvestment and Share Purchase
Plan (the
Plan)
Average market price
as defined under the Plan
May 2021:
$123.83
June 2021:
$127.28
July 2021:
$125.28
For dividend
information, change in shareholder address
or to advise of
duplicate mailings, please contact
Computershare Trust
Company of Canada
100 University
Avenue, 8th Floor
Toronto, Ontario M5J
2Y1
Telephone:
1-800-340-5021 (Canada and the United States)
Telephone: (514)
982-7800 (international)
Fax: 1-888-453-0330
(Canada and the United States)
Fax: (416) 263-9394
(international)
E-mail:
service@computershare.com
|
For other
shareholder information, please contact
Bank of
Montreal
Shareholder
Services
Corporate Secretary's
Department
One First Canadian
Place, 21st Floor
Toronto, Ontario M5X
1A1
Telephone: (416)
867-6785
Fax: (416)
867-6793
E-mail:
corp.secretary@bmo.com
For further
information on this document, please contact
Bank of
Montreal
Investor Relations
Department
P.O. Box 1, One First
Canadian Place, 10th Floor
Toronto, Ontario M5X
1A1
To review
financial results and regulatory filings and disclosures
online,
please visit BMO's website at
www.bmo.com/investorrelations.
|
BMO's 2020 Annual MD&A, audited consolidated financial
statements, annual information form and annual report on Form 40-F
(filed with the U.S. Securities and Exchange Commission) are
available online at www.bmo.com/investorrelations and at
www.sedar.com. Printed copies of the bank's complete 2020 audited
consolidated financial statements are available free of charge upon
request at 416-867-6785 or corp.secretary@bmo.com.
Annual Meeting 2022
The next Annual Meeting of
Shareholders will be held on Wednesday,
April 13, 2022, in Toronto,
Ontario.
® Registered trademark of Bank of Montreal
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SOURCE BMO Financial Group