BMO Financial Group Ontario

07.08.2025 - 18:09:03

BMO Financial Group Reports Fourth Quarter and Fiscal 2023 Results

Financial Results Highlights

Fourth Quarter 2023 Compared with Fourth Quarter 2022:

Net income of $1,617 million, compared with $4,483 million; adjusted net income 1, 3 of $2,150 million, compared with $2,136 millionReported earnings per share (EPS) 2 of $2.06, compared with $6.51; adjusted EPS 1, 2, 3 of $2.81, compared with $3.04Provision for credit losses (PCL) of $446 million, compared with $226 millionReturn on equity (ROE) of 8.6%, compared with 27.6%; adjusted ROE 1, 3 of 11.7%, compared with 12.9%Common Equity Tier 1 (CET1) Ratio 4 of 12.5%, compared with 16.7%

Fiscal 2023 Compared with Fiscal 2022:

Net income of $4,377 million, compared with $13,537 million; adjusted net income 1, 3 of $8,675 million, compared with $9,039 millionReported EPS 2 of $5.68, compared with $19.99; adjusted EPS 1, 2, 3 of $11.73, compared with $13.23PCL of $2,178 million, compared with $313 million; adjusted PCL 1, 3 of $1,473 million, compared with $313 millionROE of 6.0%, compared with 22.9%; adjusted ROE 1, 3 of 12.3%, compared with 15.2%

Adjusted 1, 3 results in the current quarter and the prior year excluded the following items:

Acquisition and integration costs of $433 million ($582 million pre-tax) in the current quarter, and $145 million ($193 million pre-tax) in the prior year.Amortization of acquisition-related intangible assets of $88 million ($119 million pre-tax) in the current quarter, and $6 million ($8 million pre-tax) in the prior year.Impact of a lawsuit associated with a predecessor bank, M&I Marshall and Ilsley Bank, of $12 million ($16 million pre-tax) in the current quarter and $846 million ($1,142 million pre-tax) in the prior year.Revenue of $3,336 million ($4,541 million pre-tax) in the prior year related to the management of the impact of interest rate changes between the announcement and closing of the Bank of the West acquisition on its fair value and goodwill.A recovery of $8 million ($6 million pre-tax) in the prior year related to the sale of our EMEA and U.S. Asset Management businesses.

TORONTO, Dec. 1, 2023 /PRNewswire/ -- For the fourth quarter ended October 31, 2023, BMO Financial Group (TSX: BMO) (NYSE: BMO) recorded net income of $1,617 million or $2.06 per share on a reported basis, and net income of $2,150 million or $2.81 per share on an adjusted basis.

"Our results this year reflect the fundamental strength and diversification of our businesses. Driven by record revenue and ongoing momentum in Canadian Personal and Commercial Banking and the contribution of Bank of the West, we delivered strong performance in a challenging economic backdrop," said Darryl White, Chief Executive Officer, BMO Financial Group.

"This year, we made significant progress against our strategic priorities to continue to grow and strengthen our bank, completing three notable acquisitions, advancing our Digital First capabilities and delivering interconnected One Client experiences. With the successful conversion of Bank of the West, BMO is the most integrated north-south bank on the continent. Our relentless focus on putting customers first and supporting their financial goals with innovative digital experiences and expert guidance continues to be recognized, including being ranked first by J.D. Power 5 for Personal Banking Customer Satisfaction among the Big 5 Banks in its 2023 Canada Retail Banking Satisfaction Study.

"Looking to 2024, we have proactively positioned the bank for future growth and are confident that our dynamic expense and capital management actions and ongoing targeted investments will drive consistent and differentiated performance. At BMO we are leveraging our position as a leading financial services provider to put our Purpose into action and help our clients and communities make progress for a thriving economy, sustainable future and an inclusive society," concluded Mr. White.

Concurrent with the release of results, BMO announced a first quarter 2024 dividend of $1.51 per common share, an increase of $0.04 from the prior quarter and an increase of $0.08 or 6% from the prior year. The quarterly dividend of $1.51 per common share is equivalent to an annual dividend of $6.04 per common share.

Caution

The foregoing section contains forward-looking statements. Please refer to the Caution Regarding Forward-Looking Statements.

(1)

Results and measures in this document are presented on a generally accepted accounting principles (GAAP) basis. They are also presented on an adjusted basis that excludes the impact of certain specified items from reported results. Adjusted results and ratios are non-GAAP and are detailed for all reported periods in the Non-GAAP and Other Financial Measures section. For details on the composition of non-GAAP amounts, measures and ratios, as well as supplementary financial measures, refer to the Glossary of Financial Terms.

(2)

All EPS measures in this document refer to diluted EPS, unless specified otherwise.

(3)

Refer to the Non-GAAP and Other Financial Measures section for further information on adjusting items.

(4)

The CET1 Ratio is disclosed in accordance with the Office of the Superintendent of Financial Institutions' (OSFI's) Capital Adequacy Requirements (CAR) Guideline.

(5)

For more information, refer to www.jdpower.com/business.

Note: All ratios and percentage changes in this document are based on unrounded numbers.

Recent Acquisitions

On February 1, 2023, we completed our acquisition of Bank of the West, including its subsidiaries, from BNP Paribas. Bank of the West provides a broad range of banking products and services, primarily in the Western and Midwestern regions of the United States. The acquisition strengthens our position in North America with increased scale and greater access to growth opportunities in strategic new markets. We completed the conversion of Bank of the West customer accounts and systems to our respective BMO operating platforms in September 2023. The acquisition has been reflected in our results as a business combination, primarily in the U.S. P&C and BMO Wealth Management reporting segments.

On June 1, 2023, we completed the acquisition of the AIR MILES Reward Program (AIR MILES) business of LoyaltyOne Co. The AIR MILES business operates as a wholly-owned subsidiary of BMO. The acquisition was accounted for as a business combination and the acquired business and corresponding goodwill are included in our Canadian P&C reporting segment.

For more information on the acquisition of Bank of the West and AIR MILES, refer to Note 10 of the audited annual consolidated financial statements.

Caution

The foregoing section contain forward-looking statements. Please refer to the Caution Regarding Forward-Looking Statements.

Fourth Quarter 2023 Performance Review

Adjusted results and ratios in this section are on a non-GAAP basis. Refer to the Non-GAAP and Other Financial Measures section for further information on adjusting items. The order in which the impact on net income is discussed in this section follows the order of revenue, expenses and provision for credit losses, regardless of their relative impact.

Reported net income was $1,617 million, a decrease of $2,866 million or 64%, and adjusted net income was $2,150 million, an increase of $14 million or 1%. The inclusion of Bank of the West results in the current quarter decreased reported net income by $317 million, and increased adjusted net income by $195 million. Adjusted results excluded the items noted above. Reported EPS was $2.06, a decrease of $4.45, and adjusted EPS was $2.81, a decrease of $0.23, including the impact of common share issuances in the first quarter of 2023.

Canadian P&C

Reported net income was $962 million, an increase of $45 million or 5% from the prior year, and adjusted net income was $966 million, an increase of $49 million or 5%. Results reflected a 13% increase in revenue, due to higher net interest income driven by higher balance growth and margins, and higher non-interest revenue, partially offset by higher expenses and a higher provision for credit losses.

U.S. P&C

Reported net income was $661 million, an increase of $1 million from the prior year, and adjusted net income was $740 million, an increase of $78 million or 12% from the prior year. The impact of the stronger U.S. dollar increased net income by 1%.

On a U.S. dollar basis, reported net income was $486 million, a decrease of $2 million or 1% from the prior year. Adjusted net income, which excluded amortization of acquisition-related intangible assets, was $543 million, an increase of $54 million or 11% due to inclusion of Bank of the West, partially offset by a decrease in underlying revenue primarily due to lower net interest income, higher expenses and a higher provision for credit losses.

BMO Wealth Management

Reported net income was $262 million, a decrease of $36 million or 12% from the prior year, and adjusted net income was $263 million, a decrease of $35 million or 12%. Wealth and Asset Management reported net income was $212 million, a decrease of $9 million or 4%, and adjusted net income was $213 million, a decrease of $8 million or 3% as the inclusion of Bank of the West and higher revenue from growth in client assets was more than offset by higher underlying expenses. Insurance net income was $50 million, a decrease of $27 million or 36% from the prior year, primarily due to unfavourable market movements in the current year relative to favourable market movements in the prior year.

BMO Capital Markets

Reported net income was $489 million, an increase of $132 million or 37% from the prior year, and adjusted net income was $492 million, an increase of $129 million or 36%. Results reflected revenue growth of 19%, with higher revenue in both Global Markets and Investment and Corporate Banking, partially offset by higher expenses and a higher provision for credit losses, compared with a recovery in the prior year.

Corporate Services

Reported net loss was $757 million, compared with reported net income of $2,251 million in the prior year, and adjusted net loss was $311 million, compared with adjusted net loss of $104 million.

Capital

BMO's Common Equity Tier 1 (CET1) Ratio was 12.5% as at October 31, 2023, an increase from 12.3% at the end of the third quarter of 2023, primarily due to internal capital generation and common shares issued under the Dividend Reinvestment and Share Purchase Plan, partially offset by the impact of acquisition and integration costs related to Bank of the West and unrealized losses on fair value through other comprehensive income securities.

Credit Quality

Total provision for credit losses was $446 million, compared with a provision of $226 million in the prior year. The provision for credit losses on impaired loans was $408 million, an increase of $216 million from the prior year. The provision for credit losses on performing loans was $38 million, an increase of $4 million from the prior year.

Refer to the Critical Accounting Estimates and Judgments section of BMO's 2023 Annual Report and Note 4 of our audited annual consolidated financial statements for further information on the allowance for credit losses as at October 31, 2023.

Caution

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

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.sedarplus.ca, 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.

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. In this document, the names BMO and BMO Financial Group, as well as the words "bank", "we" and "our", mean Bank of Montreal, together with its subsidiaries.

Financial Review

Management's Discussion and Analysis (MD&A) commentary is as at December 1, 2023. The material that precedes this section comprises part of this MD&A. The MD&A should be read in conjunction with the unaudited interim consolidated financial statements for the period ended October 31, 2023, included in this document, as well as the audited annual consolidated financial statements for the year ended October 31, 2023, and the MD&A for fiscal 2023, contained in BMO's 2023 Annual Report.

BMO's 2023 Annual Report includes a comprehensive discussion of its 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 Chief Executive Officer and the Chief Financial Officer, has evaluated the effectiveness, as at October 31, 2023, of Bank of Montreal's disclosure controls and procedures (as defined in the rules of the U.S. 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 October 31, 2023, which 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.

Financial Highlights

(Canadian $ in millions, except as noted)

Q4-2023

Q3-2023

Q4-2022

Fiscal 2023

Fiscal 2022

Summary Income Statement (1) (5)

Net interest income

4,941

4,905

3,767

18,681

15,885

Non-interest revenue

3,419

3,024

6,803

12,518

17,825

Revenue

8,360

7,929

10,570

31,199

33,710

Insurance claims, commissions and changes in policy benefit liabilities (CCPB)

151

(369)

1,939

(683)

Revenue, net of CCPB (2)

8,209

7,925

10,939

29,260

34,393

Provision for credit losses on impaired loans

408

333

192

1,180

502

Provision for (recovery of) credit losses on performing loans

159

998

(189)

Total provision for credit losses (PCL)

446

492

226

2,178

313

Non-interest expense

5,700

5,594

4,776

21,219

16,194

Provision for income taxes

446

385

1,454

1,486

4,349

Net income

1,617

1,454

4,483

4,377

13,537

Net income available to common shareholders

1,485

1,411

4,406

4,034

13,306

Adjusted net income

2,150

2,037

2,136

8,675

9,039

Adjusted net income available to common shareholders

2,018

1,994

2,059

8,332

8,808

Common Share Data ($, except as noted) (1)

Basic earnings per share

2.07

1.97

6.52

5.69

20.04

Diluted earnings per share

2.06

1.97

6.51

5.68

19.99

Adjusted diluted earnings per share

2.81

2.78

3.04

11.73

13.23

Book value per share

97.17

93.79

95.60

97.17

95.60

Closing share price

104.79

122.54

125.49

104.79

125.49

Number of common shares outstanding (in millions)

End of period

720.9

716.7

677.1

720.9

677.1

Average basic

719.2

715.4

676.1

709.4

664.0

Average diluted

720.0

716.4

677.5

710.5

665.7

Market capitalization ($ billions)

75.5

87.8

85.0

75.5

85.0

Dividends declared per share

1.47

1.39

5.80

5.44

Dividend yield (%)

5.6

4.8

4.4

5.5

4.3

Dividend payout ratio (%)

71.1

74.6

21.3

102.0

27.1

Adjusted dividend payout ratio (%)

52.3

52.7

45.6

49.4

41.0

Financial Measures and Ratios (%) (1)

Return on equity

8.6

8.3

27.6

6.0

22.9

Adjusted return on equity

11.7

12.9

12.3

15.2

Return on tangible common equity

12.5

11.9

30.1

8.2

25.1

Adjusted return on tangible common equity

16.0

15.8

14.0

15.8

16.6

Efficiency ratio

68.2

70.6

45.2

68.0

48.0

Adjusted efficiency ratio, net of CCPB (2)

60.8

61.6

57.2

59.8

55.8

Operating leverage

(40.2)

(14.9)

35.3

(38.5)

19.6

Adjusted operating leverage, net of CCPB (2)

(7.3)

(10.4)

0.4

(8.2)

1.3

Net interest margin on average earning assets

1.66

1.68

1.46

1.63

1.62

Net interest margin on average earning assets excluding trading revenue and trading assets

1.87

1.90

1.56

1.82

1.72

Effective tax rate

21.62

20.92

24.49

25.34

24.31

Adjusted effective tax rate

22.65

21.85

21.83

22.33

22.80

Total PCL-to-average net loans and acceptances

0.27

0.30

0.16

0.35

0.06

PCL on impaired loans-to-average net loans and acceptances

0.25

0.21

0.14

0.19

0.10

Liquidity coverage ratio (LCR) (3)

128

131

135

128

135

Net stable funding ratio (NSFR) (3)

115

114

115

114

Balance Sheet and other information (as at October 31, $ millions, except as noted)

Assets

1,293,276

1,248,554

1,139,199

1,293,276

1,139,199

Average earning assets

1,177,770

1,161,226

1,021,540

1,145,632

979,341

Gross loans and acceptances

668,396

643,911

567,191

668,396

567,191

Net loans and acceptances

664,589

640,391

564,574

664,589

564,574

Deposits

909,676

883,569

769,478

909,676

769,478

Common shareholders' equity

70,051

67,215

64,730

70,051

64,730

Total risk weighted assets (4)

424,197

412,943

363,997

424,197

363,997

Assets under administration

808,985

774,760

744,442

808,985

744,442

Assets under management

332,947

340,184

305,462

332,947

305,462

Capital Ratios (%) (4)

Common Equity Tier 1 Ratio

12.5

12.3

16.7

12.5

16.7

Tier 1 Capital Ratio

14.1

14.0

18.4

14.1

18.4

Total Capital Ratio

16.2

16.1

20.7

16.2

20.7

Leverage Ratio

4.2

5.6

4.2

5.6

TLAC Ratio

27.0

26.8

33.1

27.0

33.1

Foreign Exchange Rates ($)

As at October 31, Canadian/U.S. dollar

1.3868

1.3177

1.3625

1.3868

1.3625

Average Canadian/U.S. dollar

1.3648

1.3331

1.3516

1.3492

1.2918

(1)

Adjusted results exclude certain items from reported results and are used to calculate our adjusted measures as presented in the above table. Management assesses performance on a reported basis and an adjusted basis, and considers both to be useful. Revenue, net of CCPB, as well as reported ratios calculated net of CCPB, and adjusted results, measures and ratios in this table are non-GAAP amounts. For further information, refer to the Non-GAAP and Other Financial Measures section; for details on the composition of non-GAAP amounts, measures and ratios, as well as supplementary financial measures, refer to the Glossary of Financial Terms.

(2)

We present revenue, efficiency ratio and operating leverage on a basis that is net of CCPB, which reduces the variability in insurance revenue resulting from changes in fair value that are largely offset by changes in the fair value of policy benefit liabilities, the impact of which is reflected in CCPB. For further information, refer to the Insurance Claims, Commissions and Changes in Policy Benefits section.

(3)

LCR and NSFR are disclosed in accordance with the Liquidity Adequacy Requirements (LAR) Guideline as set out by Office of the Superintendent of Financial Institutions (OSFI), as applicable.

(4)

Capital ratios and risk–weighted assets are disclosed in accordance with the Capital Adequacy Requirements (CAR) Guideline, as set out by OSFI, as applicable.

(5)

Due to the increase in the bank's investments in Low Income Housing Tax Credit (LIHTC) entities following our acquisition of Bank of the West, we have updated our accounting policy related to the presentation of returns from these investments in the consolidated statement of income. As a result, amounts previously recorded in non-interest expense and provision for income taxes are both recorded in non-interest revenue. Fiscal 2023 comparatives have been reclassified to conform with the current period's methodology. The impact in fiscal 2022 was not material.

Non-GAAP and Other Financial Measures

Results and measures in this document are presented on a generally accepted accounting principles (GAAP) basis. Unless otherwise indicated, all amounts are in Canadian dollars and have been derived from our audited annual consolidated financial statements prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board. References to GAAP mean IFRS. We use a number of financial measures to assess our performance, as well as the performance of our operating segments, including amounts, measures and ratios that are presented on a non–GAAP basis, as described below. We believe that these non–GAAP amounts, measures and ratios, read together with our GAAP results, provide readers with a better understanding of how management assesses results.

Non–GAAP amounts, measures and ratios 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.

Further information regarding the composition of our non-GAAP and other financial measures, including supplementary financial measures, is provided in the Glossary of Financial Terms and available online at www.bmo.com/investorrelations and at www.sedarplus.ca.

Our non–GAAP measures broadly fall into the following categories:

Adjusted measures and ratios

Management considers both reported and adjusted results and measures to be useful in assessing underlying ongoing business performance. Adjusted results and measures remove certain specified items from revenue, non–interest expense, provision for credit losses and income taxes, as detailed in the following table. Adjusted results and measures presented in this document are non–GAAP amounts. Presenting results on both a reported basis and an adjusted basis permits readers to assess the impact of certain items on results for the periods presented, and to better assess results excluding those items that may not be reflective of ongoing business performance. 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.

Measures net of insurance claims, commissions and changes in policy benefit liabilities

We also present reported and adjusted revenue on a basis that is net of insurance claims, commissions and changes in policy benefit liabilities (CCPB), and our efficiency ratio and operating leverage are calculated on a similar basis. Measures and ratios presented on a basis net of CCPB are non-GAAP amounts. Insurance revenue can experience variability arising from fluctuations in the fair value of insurance assets caused by movements in interest rates and equity markets. The investments that support policy benefit liabilities are predominantly fixed income assets recorded at fair value, with changes in fair value recorded in insurance revenue in the Consolidated Statement of Income. These fair value changes are largely offset by changes in the fair value of policy benefit liabilities, the impact of which is reflected in CCPB. The presentation and discussion of revenue, efficiency ratios and operating leverage on a net basis reduces this variability, which allows for a better assessment of operating results. For more information, refer to the Insurance Claims, Commissions and Changes in Policy Benefit Liabilities section.

Tangible common equity and return on tangible common equity

Tangible common equity is calculated as common shareholders' equity, less goodwill and acquisition-related intangible assets, net of related deferred tax liabilities. Return on tangible common equity is commonly used in the North American banking industry and is meaningful because it measures the performance of businesses consistently, whether they were acquired or developed organically.

Caution

This Non-GAAP and Other Financial Measures section contains forward-looking statements. Please refer to the Caution Regarding Forward-Looking Statements.

Non-GAAP and Other Financial Measures

(Canadian $ in millions, except as noted)

Q4-2023

Q3-2023

Q4-2022

Fiscal 2023

Fiscal 2022

Reported Results

Net interest income

4,941

4,905

3,767

18,681

15,885

Non-interest revenue

3,419

3,024

6,803

12,518

17,825

Revenue

8,360

7,929

10,570

31,199

33,710

Insurance claims, commissions and changes in policy benefit liabilities (CCPB)

(151)

(4)

369

(1,939)

683

Revenue, net of CCPB

8,209

7,925

10,939

29,260

34,393

Provision for credit losses

(446)

(492)

(226)

(2,178)

(313)

Non-interest expense

(5,700)

(5,594)

(4,776)

(21,219)

(16,194)

Income before income taxes

2,063

1,839

5,937

5,863

17,886

Provision for income taxes

(446)

(385)

(1,454)

(1,486)

(4,349)

Net income

1,617

1,454

4,483

4,377

13,537

Diluted EPS ($)

2.06

1.97

6.51

5.68

19.99

Adjusting Items Impacting Revenue (Pre-tax)

Impact of divestitures (1)

(21)

Management of fair value changes on the purchase of Bank of the West (2)

4,541

(2,011)

7,713

Legal provision (including related interest expense and legal fees) (3)

(14)

(3)

(515)

(30)

(515)

Impact of Canadian tax measures (4)

(138)

Impact of adjusting items on revenue (pre-tax)

(14)

(141)

4,026

(2,179)

7,177

Adjusting Items Impacting Provision for Credit Losses (Pre-tax)

Initial provision for credit losses on purchased performing loans (pre-tax) (5)

(705)

Adjusting Items Impacting Non-Interest Expense (Pre-tax)

Acquisition and integration costs (6)

(582)

(497)

(193)

(2,045)

(326)

Amortization of acquisition-related intangible assets (7)

(119)

(115)

(8)

(357)

(31)

Impact of divestitures (1)

(16)

Legal provision (including related interest expense and legal fees) (3)

(2)

(627)

Impact of Canadian tax measures (4)

(22)

Impact of adjusting items on non-interest expense (pre-tax)

(703)

(627)

(822)

(2,421)

(1,000)

Impact of adjusting items on reported net income (pre-tax)

(717)

(768)

3,204

(5,305)

6,177

Adjusting Items Impacting Revenue (After-tax)

Impact of divestitures (1)

(23)

Management of fair value changes on the purchase of Bank of the West (2)

3,336

(1,461)

5,667

Legal provision (including related interest expense and legal fees) (3)

(10)

(2)

(382)

(23)

(382)

Impact of Canadian tax measures (4)

(115)

Impact of adjusting items on revenue (after-tax)

(10)

(117)

2,954

(1,599)

5,262

Adjusting Items Impacting Provision for Credit Losses (After-tax)

Initial provision for credit losses on purchased performing loans (after-tax) (5)

(517)

Adjusting Items Impacting Non-Interest Expense (After-tax)

Acquisition and integration costs (6)

(433)

(370)

(145)

(1,533)

(245)

Amortization of acquisition-related intangible assets (7)

(88)

(85)

(6)

(264)

(23)

Impact of divestitures (1)

(32)

Legal provision (including related interest expense and legal fees) (3)

(2)

(464)

Impact of Canadian tax measures (4)

(16)

Impact of adjusting items on non-interest expense (after-tax)

(523)

(466)

(607)

(1,811)

(764)

Adjusting Items Impacting Provision for Income Taxes (After-tax)

Impact of Canadian tax measures (4)

(371)

Impact of adjusting items on reported net income (after-tax)

(533)

(583)

2,347

(4,298)

4,498

Impact on diluted EPS ($)

(0.75)

(0.81)

3.47

(6.05)

6.76

Adjusted Results

Net interest income

4,955

4,908

4,439

19,094

16,352

Non-interest revenue

3,419

3,162

2,105

14,284

10,181

Revenue

8,374

8,070

6,544

33,378

26,533

Insurance claims, commissions and changes in policy benefit liabilities (CCPB)

(151)

(4)

369

(1,939)

683

Revenue, net of CCPB

8,223

8,066

6,913

31,439

27,216

Provision for credit losses

(446)

(492)

(226)

(1,473)

(313)

Non-interest expense

(4,997)

(4,967)

(3,954)

(18,798)

(15,194)

Income before income taxes

2,780

2,607

2,733

11,168

11,709

Provision for income taxes

(630)

(570)

(597)

(2,493)

(2,670)

Net income

2,150

2,037

2,136

8,675

9,039

Diluted EPS ($)

2.81

2.78

3.04

11.73

13.23

(1)

Reported net income in fiscal 2022 included the impact of divestitures related to the sale of our EMEA and U.S. Asset Management businesses: Q4-2022 included a $8 million ($6 million pre-tax) recovery of non-interest expense; Q3-2022 included non-interest expense of $6 million ($7 million pre-tax); Q2-2022 included a loss of $9 million ($10 million pre-tax), comprising a gain of $8 million related to the transfer of certain U.S. asset management clients recorded in non-interest revenue and non-interest expense of $18 million; and Q1-2022 included a loss of $48 million ($26 million pre-tax), comprising a $29 million loss related to foreign currency translation reclassified from accumulated other comprehensive income to non-interest revenue, and a $3 million net recovery of non-interest expense, including taxes of $22 million on the closing of the sale of our EMEA Asset Management businesses. These amounts were recorded in Corporate Services.

(2)

Reported net income included revenue (losses) related to the acquisition of Bank of the West resulting from the management of the impact of interest rate changes between the announcement and closing of the acquisition on its fair value and goodwill:Q1-2023 included a loss of $1,461 million ($2,011 million pre-tax), comprising $1,628 million of mark-to-market losses on certain interest rate swaps recorded in non-interest trading revenue and $383 million of losses on a portfolio of primarily U.S. treasuries and other balance sheet instruments recorded in net interest income; Q4-2022 included revenue of $3,336 million ($4,541 million pre-tax), comprising $4,698 million of mark-to-market gains and $157 million of net interest losses; Q3-2022 included a loss of $694 million ($945 million pre-tax), comprising $983 million of mark-to-market losses and $38 million of net interest income; Q2-2022 included revenue of $2,612 million ($3,555 million pre-tax), comprising $3,433 million of mark-to-market gains and $122 million pre-tax net interest income; and Q1-2022 included revenue of $413 million ($562 million pre-tax), comprising $517 million of mark-to-market gains and $45 million of net interest income. These amounts were recorded in Corporate Services. For further information on this acquisition, refer to the Recent Acquisitions section.

(3)

Reported net income included the impact of a lawsuit associated with a predecessor bank, M&I Marshall and Ilsley Bank: Q4-2023 included $12 million ($16 million pre-tax), comprising interest expense of $14 million and non-interest expense of $2 million; Q3-2023 included a net recovery of $3 million ($4 million pre-tax), comprising interest expense of $3 million and a non-interest expense recovery of $7 million; Q2-2023 included interest expense of $6 million ($7 million pre-tax); Q1-2023 included $6 million ($8 million pre-tax), comprising interest expense of $6 million and non-interest expense of $2 million; and Q4-2022 included a legal provision of $846 million ($1,142 million pre-tax), comprising interest expense of $515 million and non-interest expense of $627 million. These amounts were recorded in Corporate Services. For further information, refer to the Provisions and Contingent Liabilities section in Note 24 of the audited annual consolidated financial statements of BMO's 2023 Annual Report.

(4)

Reported net income included the impact of certain tax measures enacted by the Canadian government: Q3-2023 included a charge of $131 million ($160 million pre-tax) related to the amended GST/HST definition for financial services, comprising $138 million recorded in non-interest revenue and $22 million recorded in non-interest expense; and Q1-2023 included a one-time tax expense of $371 million, comprising a Canada Recovery Dividend (CRD) of $312 million and $59 million related to the pro-rated fiscal 2022 impact of the 1.5% tax rate increase, net of a deferred tax asset remeasurement. These amounts were recorded in Corporate Services.

(5)

Reported net income in Q2-2023 included an initial provision for credit losses of $517 million ($705 million pre-tax) on the purchased Bank of the West performing loan portfolio, recorded in Corporate Services.

(6)

Reported net income included acquisition and integration costs, recorded in non-interest expense. Costs related to the acquisition of Bank of the West were recorded in Corporate Services: In fiscal 2023, Q4-2023 included $434 million ($583 million pre-tax), Q3-2023 included $363 million ($487 million pre-tax), Q2-2023 included $545 million ($722 million pre-tax), and Q1-2023 included $178 million ($235 million pre-tax); and in fiscal 2022, Q4-2022 included $143 million ($191 million pre-tax), Q3-2022 included $61 million ($82 million pre-tax), Q2-2022 included $26 million ($35 million pre-tax) and Q1-2022 included $7 million ($8 million pre-tax). Costs related to the acquisitions of Radicle and Clearpool were recorded in BMO Capital Markets: In fiscal 2023, Q4-2023 included a recovery of $2 million ($3 million pre-tax), Q3-2023 included $1 million ($2 million pre-tax), Q2-2023 included $2 million ($2 million pre-tax), Q1-2023 included $3 million ($4 million pre-tax); and in fiscal 2022, Q4-2022 included $2 million ($2 million pre-tax), Q3-2022 included $1 million ($2 million pre-tax), Q2-2022 included $2 million ($2 million pre-tax) and Q1-2022 included $3 million ($4 million pre-tax). Costs related to the acquisition of AIR MILES were recorded in Canadian P&C: In fiscal 2023, Q4-2023 included $1 million ($2 million pre-tax), Q3-2023 included $6 million ($8 million pre-tax) and Q2-2023 included $2 million ($3 million pre-tax).

(7)

Reported net income included amortization of acquisition-related intangible assets recorded in non-interest expense in the related operating group:Q4-2023 included $88 million ($119 million pre-tax), Q3-2023 and Q2-2023 both included $85 million ($115 million pre-tax); Q1-2023 included $6 million ($8 million pre-tax); Q4-2022 included $6 million ($8 million pre-tax); Q3-2022 included $5 million ($7 million pre-tax); and Q2-2022 and Q1-2022 both included $6 million ($8 million pre-tax).

Summary of Reported and Adjusted Results by Operating Segment

BMO Wealth

BMO Capital

Corporate

U.S. Segment (1)

(Canadian $ in millions, except as noted)

Canadian P&C

U.S. P&C

Total P&C

Management

Markets

Services

Total Bank

(US$ in millions)

Q4-2023

Reported net income (loss)

962

661

1,623

262

489

(757)

1,617

388

Acquisition and integration costs

(2)

434

433

317

Amortization of acquisition-related intangible assets

Legal provision (including related interest expense

and legal fees)

Adjusted net income (loss)

966

740

1,706

263

492

(311)

2,150

774

Q3-2023

Reported net income (loss)

915

576

1,491

303

310

(650)

1,454

364

Acquisition and integration costs

363

370

275

Amortization of acquisition-related intangible assets

Legal provision (including related interest expense

and legal fees)

(3)

(2)

Impact of Canadian tax measures

131

Adjusted net income (loss)

923

653

1,576

304

316

(159)

2,037

697

Q4-2022

Reported net income

917

660

1,577

298

357

2,251

4,483

2,306

Acquisition and integration costs

143

145

106

Amortization of acquisition-related intangible assets

Impact of divestitures

(8)

(3)

Management of fair value changes on the purchase of

Bank of the West

(3,336)

(2,470)

Legal provision (including related interest expense

and legal fees)

846

621

Adjusted net income (loss)

917

662

1,579

298

363

(104)

2,136

564

Fiscal 2023

Reported net income (loss)

3,718

2,724

6,442

1,126

1,682

(4,873)

4,377

Acquisition and integration costs

1,520

1,533

1,124

Amortization of acquisition-related intangible assets

234

240

264

186

Management of fair value changes on the purchase of

Bank of the West

1,461

1,093

Legal provision (including related interest expense

and legal fees)

Impact of Canadian tax measures

502

Initial provision for credit losses on purchased

performing loans

517

379

Adjusted net income (loss)

3,733

2,958

6,691

1,130

1,706

(852)

8,675

2,887

Fiscal 2022

Reported net income

3,826

2,497

6,323

1,251

1,772

4,191

13,537

6,079

Acquisition and integration costs

237

245

185

Amortization of acquisition-related intangible assets

Impact of divestitures

(45)

Management of fair value changes on the purchase of

Bank of the West

(5,667)

(4,312)

Legal provision (including related interest expense

and legal fees)

846

621

Adjusted net income (loss)

3,827

2,502

6,329

1,254

1,794

(338)

9,039

2,545

(1) U.S. segment reported and adjusted results comprise net income recorded in U.S. P&C and our U.S. operations in BMO Wealth Management, BMO Capital Markets and Corporate Services.

Refer to footnotes (1) to (7) in the Non-GAAP and Other Financial Measures table for details on adjusting items.

Net Revenue, Efficiency Ratio and Operating Leverage

(Canadian $ in millions, except as noted)

Q4-2023

Q3-2023

Q4-2022

Fiscal 2023

Fiscal 2022

Reported

Net interest income

4,941

4,905

3,767

18,681

15,885

Non-interest revenue

3,419

3,024

6,803

12,518

17,825

Revenue

8,360

7,929

10,570

31,199

33,710

Insurance claims, commissions and changes in policy benefit liabilities (CCPB)

151

(369)

1,939

(683)

Revenue, net of CCPB

8,209

7,925

10,939

29,260

34,393

Non-interest expense

5,700

5,594

4,776

21,219

16,194

Efficiency ratio (%)

68.2

70.6

45.2

68.0

48.0

Efficiency ratio, net of CCPB (%)

69.4

70.6

43.7

72.5

BMO Financial Group Ontario

Aktienkurse

Nachrichten

broker

Service

Weitere Angebote

Kursinformationen