RNS Number:1492L
Bank of Montreal
24 May 2000
Bank of Montreal Reports Record Quarter Results
TORONTO, May 24, 2000 - Bank of Montreal reported record financial results today
for the quarter ended April 30, 2000. Among the highlights:
- Net income was $497 million for the quarter, an increase of 36.6 per
cent from the prior year. Included in the current quarter results were gains of
$52 million after-tax resulting from the sales of the bank's U.S. corporate
trust businesses and 17 branches in Western Canada. Excluding these gains, net
income increased 22.3 per cent over the prior year.
- Revenue growth from the prior year of $235 million excluding gains, was
generated by volume growth in retail and commercial businesses and by strong
equity market conditions in wealth management and institutional businesses.
- Expenses, excluding the impact of revenue-driven compensation, decreased from
the prior year by $32 million, due to reductions from on-going business
operations.
- Asset quality remains sound. Gross impaired loans at the end of the quarter
were $1,189 million, up from $1,047 million a year ago. The allowance for credit
losses exceeded the gross amount of impaired loans by $283 million at the end of
the second quarter, compared with a $212 million excess a year earlier.
Net income growth by operating and support groups was as follows:
- In the bank's Personal and Commercial Client group, net income, excluding the
gains referred to above, increased 23.9 per cent ($45 million) over the prior
year, driven by volume growth and strong expense controls.
- Net Income in the Private Client group increased 71.1 per cent ($24 million)
and in the Investment Banking group increased 27.4 per cent ($38 million)
year-over-year. In both groups, growth was driven by strong equity market
conditions during the quarter.
- Net Income in Corporate Support areas decreased $26 million due to the
inclusion, in the second quarter of 1999, of gains on sales of bonds of
lesser-developed countries which did not recur in 2000.
"Our results this quarter reflect strong business performance across all our
operating groups and our ability to capitalize on strong capital market
activity," said Tony Comper, Chairman and Chief Executive Officer, Bank of
Montreal
The achievement of these outstanding results reflects the bank's business
focus, our ongoing objective of getting it right with our customers and the
accomplishments of our employees."
Quarterly Highlights
Q2 2000 Q2 2000 Q2 2000 YTD
B/(W) B/(W) B/(W)
Q2 1999 Q1 2000 1999
Q2 Q2 2000
2000 $ % $ % YTD $ %
Reported
Net income ($ millions) $497 133 36.6 23 4.9 $971 245 33.7
Fully diluted EPS $1.75 0.50 40.0 0.09 5.4 $3.41 0.92 36.9
Basic EPS $1.76 0.50 39.7 0.08 4.8 $3.44 0.93 37.1
Return on equity (%) 19.8 - 4.3 - 0.8 19.4 - 4.1
Return on equity - cash
basis (%) 21.8 - 4.4 - 0.8 21.4 - 4.2
Reported results -
excluding gains*
Net income ($ millions) $445 81 22.3 38 9.4 $852 126 17.3
Fully diluted EPS $1.56 0.31 24.8 0.14 9.9 $2.98 0.49 19.7
Basic EPS $1.57 0.31 24.6 0.14 9.8 $3.00 0.49 19.5
Return on equity (%) 17.6 - 2.1 - 1.4 16.9 - 1.6
Return on equity - cash
basis (%) 19.5 - 2.1 - 1.6 18.7 - 1.5
* after-tax gains include $44 million from the sale of the bank's U.S. corporate
trust businesses and $8 million from the sale of branches in Western Canada in
the second quarter of 2000 and $67 millon from the sale of Partners First in the
first quarter of 2000.
Second Quarter 2000 Compared with Second Quarter 1999
Net income for the second quarter was $497 million, an increase of $133 million
over the prior year. Net income for the quarter included after-tax gains of $44
million from the sale of U.S. corporate trust businesses and $8 million from the
completion of certain of the previously announced sales of branches in Alberta,
Saskatchewan and Manitoba. Excluding the gains, net income increased $81 million
or 22.3 per cent. High activity levels in equity markets resulted in strong
growth in securities commissions and fees, underwriting fees and trading income
in wealth management and institutional businesses. In addition, an increase in
loan and term deposit volumes drove increased revenue in retail and wealth
management businesses. These increases were partially offset by higher
revenue-driven compensation expenses, a higher provision for credit losses, a
lower contribution from the bank's investment in Grupo Financiero Bancomer and
the impact of a reduction in net interest margin in Canada.
Second Quarter 2000 Compared with First Quarter 2000
Net income for the second quarter reflected an increase of $23 million over the
first quarter. The first quarter of 2000 included a $67 million after-tax gain
from the sale of the bank's investment in Partners First, a U.S. credit card
issuing business. Excluding the gains on sales in both quarters, the net income
increase was $38 million, or 9.4 per cent. Net income growth was driven by
increased revenues in wealth management and institutional businesses for the
same reasons as noted above. Revenue growth was partly offset by an increase in
revenue-driven compensation expenses and higher income taxes, due to a higher
proportion of Canadian income.
2000 Year-to-date Compared with 1999 Year-to-date
Year-to-date net income was $971 million, an increase of $245 million. Excluding
the gains on sales included in the current year-to-date results, the net income
increase was $126 million, or 17.3 per cent and was driven by revenue growth of
$312 million, partly offset by expense growth of $99 million and a $40 million
increase in the provision for credit losses.
Earnings in Canada were $276 million, or 55.4 per cent of the bank's earnings in
the quarter. Earnings from outside of Canada were $221 million, or 44.6 per cent
of total earnings, with $157 million (31.5 per cent) in the U.S., $24 million
(5.0 per cent) in Mexico, and $40 million (8.1 per cent) in other countries.
During the first half of the year, equity markets were particularly strong and
contributed to the overall increase in net income. Equity market volumes
moderated somewhat in the latter part of the second quarter from the exceptional
levels seen to that point.
Strategic Highlights
Bank of Montreal continued to make progress in implementing its six-point growth
strategy:
1.Continue to aggressively build the value of Harris
- On a U.S. GAAP basis, Harris Bank earnings were US $87 million, up US $32
million, or 59.9 per cent from the same quarter a year earlier. Excluding
the gains on sales of the corporate trust businesses and securities gains,
earnings increased 16.0 per cent.
2.Rapidly grow the wealth management business
- Private Client Group net income increased by 71.1 per cent and revenues by
42.4 per cent over the prior year.
- Assets under management and administration and term deposits increased $28.2
billion, or 14.6 per cent over the prior year.
3.Capitalize on the banks strong Canadian position in personal and commercial
banking
- Residential mortgages increased by $2.7 billion, or 7.2 per cent; credit
cards and other personal loans increased by $1.3 billion, or 7.8 per cent;
and loans to commercial enterprises, including small business increased $1.7
billion, or 8.3 per cent over the prior year.
- In-Store branches increased by 12 to a total of 58.
- Subsequent to the end of the quarter, the bank announced the purchase of 12
branches in the high-growth Kitchener-Waterloo area from TD Financial Group.
4.Build on the bank's strong leadership position in investment banking
- On a year-to-date basis, Investment Banking Group ranked #2 in corporate
underwriting and institutional equity, and #1 in research and
securitizations.
- A new team was formed to lead the U.S. media and telecommunications
investment and merchant banking business and US $450 million was committed
to merchant banking in this area over the next three years.
5. Drive e-business opportunities
- Through the bank's joint venture with American Management Systems,
Competix.com, the bank sold its state-of-the-art loan approval software to
41 American banks.
- The bank's joint venture with CIT Group Inc., FinanciaLinx, became the first
financing company to offer all automobile dealers in Canada access to
online, real-time, Internet-based car leases and loans.
- Private Client Group introduced the BMO Investing portal web-site to assist
customers with wealth management product selection.
- The bank continued to build on its leadership position in wireless financial
services through the introduction of wireless trading with BMO InvestorLine
and U.S. wireless banking in conjunction with Sprint. In addition, Bank of
Montreal's Veev wireless service offered the first Canadian wireless retail
application with indigo.ca.
- The MasterCard wallet was introduced for easy on-line purchasing.
6.Intensely focus on cost, capital and risk management
- The bank sold its U.S. corporate trust businesses for an after-tax gain of
$44 million, to re-deploy capital and resources to grow and expand its
other businesses.
- The bank announced the sale of 48 branches to a group of credit unions in
Western Canada, 17 of which were completed for an after-tax gain of $8
million. The bank plans to complete the remaining 31 branch sales during
the rest of the fiscal year.
- Further progress has been achieved in managing market risk, through the
capture of commodities exposures on a Value-at-Risk basis.
- The bank announced today that it may purchase up to 10,000,000 common
shares, or approximately 3.7 per cent of the issued and outstanding common
shares of the bank, through a normal course issuer bid expiring October 31,
2000.
Financial Statement Highlights
Revenues
Total revenues for the quarter were $2,284 million, an increase of $323 million,
or 16.5 per cent from a year ago. Excluding $74 million of revenues on the sale
of U.S. corporate trust businesses and $14 million on the sale of branches in
Western Canada, revenues increased $235 million, or 12.0 per cent.
Net interest income for the quarter was $1,084 million, a decrease of $28
million from the prior year. Net interest income increased in retail and
commercial and wealth management businesses due to loan and term deposit volume
growth, partly offset by a lower net interest margin and lower contribution from
Bancomer. Net interest margin on these businesses declined in Canada as the
positive impact of rising interest rates was more than offset by the impact of
additional higher-cost wholesale funding. Net interest income in institutional
businesses declined as the impact of volume growth and increased net interest
margin on the corporate loan portfolio was more than offset by net interest
margin declines in capital markets businesses. Also contributing to a reduction
in net interest income year-over-year, were gains from the sale of bonds of
lesser-developed countries included in revenue in the prior year.
Other income for the quarter was $1,200 million, an increase of $351 million
from the prior year. Excluding the gains on sales of businesses, other income
increased $263 million, or 31.0 per cent. Active equity markets benefited many
of the bank's businesses as reflected in increased securities commissions and
fees, underwriting fees and trading income.
Revenues for the quarter increased $161 million, or 7.5 per cent from the first
quarter of 2000. The first quarter of 2000 included $112 million of revenues
related to the sale of Partners First. Excluding gains from the sales of
businesses in both quarters, revenues increased $185 million, or 9.1 per cent.
The increase was mainly due to increased equity-related commissions and fees and
increased trading income.
Expenses
Expenses for the quarter increased $77 million, or 6.2 per cent from the second
quarter of the prior year. Excluding an increase in revenue-driven compensation
of $109 million, expenses declined by $32 million, or 2.4 per cent. This decline
reflected a reduction in ongoing business operations expenses, including $64
million of cost reduction initiatives, partially offset by spending on strategic
initiatives of $37 million.
Expenses for the quarter increased $94 million, or 7.5 per cent from the first
quarter of 2000. Excluding increased revenue-driven compensation of $71 million,
expenses increased $23 million, or 1.9 per cent. The increase was due to a
reduction in ongoing business operations expenses, which was more than offset by
higher spending on strategic initiatives.
Asset Quality
The provision for credit losses was $100 million for the quarter, versus $80
million in 1999. The quarterly provision is based on an annual forecast of $400
million, compared with $320 million in 1999. The annual forecast is based on a
methodology used for a number of years and considers the level of expected loss
in the loan portfolio, management's view of the economic cycle, the level of
impaired loans, and the balance of the general allowance for credit losses,
which is currently $970 million. The split of the specific and general provision
will be determined by the fourth quarter.
Gross impaired loans at the end of the quarter were $1,189 million, up from
$1,047 million a year ago. The allowance for credit losses exceeded the gross
amount of impaired loans by $283 million at the end of the second quarter,
compared with a $212 million excess a year earlier.
Capital Management
At April 30, 2000, the bank's Tier 1 and Total Capital ratios were 8.06 per cent
and 11.13 per cent respectively, up from 7.73 per cent and 10.85 per cent at
April 30, 1999, and up from 7.84 percent and 10.99 percent at January 31, 2000.
Risk-weighted assets were $140.5 billion, an increase of 4.8 per cent from a
year ago, and up 1.6 per cent from January 31, 2000.
Harris Bank
On a U.S. dollar/U.S. GAAP basis, Harris Bank earnings were $87 million, up $32
million, or 59.9 per cent from the same quarter a year eadier. Earnings in the
current quarter included a pre-tax gain of $50 million on the sale of corporate
trust businesses, while the corresponding quarter of 1999 included pre-tax gains
on securities sales of $8 million. Excluding these gains, earnings increased
16.0 per cent from the prior year. Earnings growth was strong in community
banking, private client and mid-market businesses, while a challenging interest
rate environment resulted in reduced contributions from treasury and trading
activities. Harris Bank earnings included in the bank's consolidated results, on
a Canadian dollar/Canadian GAAP basis, were $125 million, up 57.5 per cent from
the same period last year, with a minimal impact from the U.S./Canadian dollar
exchange rate.
Bank of Montreal, Canada's first bank, is a highly diversified financial
services institution. The bank operates in 32 lines of business within its group
of companies, including BMO Nesbitt Burns, one of Canada's largest full-service
investment firms and Chicago-based Harris Bank, a major U.S. mid-west financial
institution. Bank of Montreal has an equity position in, and a strategic
alliance with, Grupo Financiero Bancomer, a leading Mexican financial
institution.
Media Relations Contacts: Investor Relations Contacts:
Joe Barbera (416) 927-2740 Bob Wells (416) 867-4009
Rick Kuwayti (416) 927-2740 Susan Payne (416) 867-6656
Ronald Monet (514) 877-1101 Lynn Inglis (416) 867-5452
Internet: http://www.bmo.com
Notes:
A live Internet broadcast of the second quarter conference call with analysts
will take place on May 24, 2000, at 3:00 p.m. E.S.T. at
www.bmo.com/investorrelations. The second quarter financial statements,
supplemental financial information and a slide presentation to investors are
available on the site.
The live second quarter conference call can be accessed by calling
1-877-871-4065. A replay of the conference call can be accessed by calling (416)
626-4100 and entering the passcode 15233988.
Operating Group Review
During the quarter, certain business lines were transferred between client
groups to more closely align with the bank's client segments. The mid-market
corporate banking and treasury units of Harris Bank were transferred from the
Personal and Commercial Client Group (P&C) to the Investment Banking Group,
combining the strengths of the Harris client relationships with BMO Nesbitt
Burns investment banking and capital markets capabilities in Chicago. In
addition, the Canadian term deposit business and Private Client Service Centres
were transferred from P&C to the Private Client Group. All comparative figures
have been restated to reflect the transfers.
Personal and Commercial Client Group
The Personal and Commercial Client Group (P&C) provides financial services,
including electronic financial services, to households and commercial businesses
in Canada, the U.S. and Mexico.
Net income for the quarter was $279 million. an increase of $97 million, or
52.3 per cent from the comparable period last year. Excluding the gains on sales
of U.S. corporate trust businesses and Western branches, net income increased
$45 million, or 23.9 per cent.
Revenues for the quarter increased $172 million, or 16.3 per cent over last
year. Excluding the revenues from the foregoing sales, revenues were up $84
million, or 7.9 per cent. Net interest income and other income growth of $30
million and $54 million respectively, were driven by strong volume growth across
most business lines, particularly in the mortgage and commercial lines of
business in Canada. Net interest margins declined in Canada as the positive
impact of rising interest rates was more than offset by the impact of
additional higher cost wholesale funding. Gains on sales of investments
increased $15 million over the prior year.
Expenses for the quarter declined by $10 million, or 1.3 per cent from last
year, mainly due to strong expense controls.
Earnings on the bank's investment in Grupo Financiero Bancomer declined by $19
million, or 47.8 per cent from the prior year. The decline was largely due to a
narrowing of spreads as Mexican interest rates declined coincident with upgrades
in Mexico's economic status. Improvements to loan quality combined with lack of
loan growth also contributed to the decline. During the quarter, Bancomer signed
an agreement with Spain's Grupo Banco Bilbao Vizcaya Argentaria (BBVA) to
proceed with a merger and capitalization program. Subsequent to the end of the
quarter, Bancomer received an unsolicited merger and capitalization proposal
from Mexico's Grupo Financiero Banamex-Accival (Banamex). The bank is continuing
to study its options for its investment in Bancomer and is not committed to any
course of action at this time.
The first quarter of 2000 included a $67 million after-tax gain on the sale of
Partners First. Excluding the effects of that gain and the gains on sales in the
current quarter, net income decreased $2 million, or 0.8 per cent from the first
quarter of 2000. The net decrease was due to a reduction in earnings on the
bank's investment in Grupo Financiero Bancomer and fewer days in the current
quarter, partially offset by gains on investments and reduced expenses.
In Canada, P&C introduced products tailored to the changing needs of customers,
including a Five-Year Open Term Mortgage which provides security from a
long-term fixed-rate mortgage with benefits of an open mortgage; a Six-Year Term
Flexible Below Prime Mortgage, a competitively priced mortgage with flexible
options; and Asset Based Lending, a new source of funding for mid-sized
companies. Distribution strategies implemented during the quarter included the
arrangement for the sale of 48 branches to credit unions in Saskatchewan,
Alberta and Manitoba and an agreement to open branches in IGA supermarkets in
Quebec. Twelve in-store branches were opened during the quarter. Other
initiatives were the Electronic Bill Payment at the ABM and the launch of the
Double Dip with Debit Card, enabling customers to earn Air Miles on debit card
purchases. FinanciaLinx, a joint venture with The CIT Group Inc. expanded its
product offering to cover the bank's automobile loans.
In the U.S., Chicago-based Harris Bank's retail banking provides retail and
small business customers with a broad array of products across multiple
channels, including a comprehensive on-line offering, resulting in strong
customer loyalty and satisfaction. Migration of customers to alternative
channels has enhanced retail productivity and the introduction of credit scoring
and auto decisioning is now improving small business productivity.
Private Client Group
The Private Client Group (PCG) encompasses all of the bank's wealth management
capabilities in six lines of business: retail investment products (including
term deposits), direct and full-service investing, Canadian and U.S. private
banking, and institutional asset management.
Net income for the quarter was $59 million, a substantial increase of $24
million, or 71.1 per cent from the comparable period last year. Revenues for
the quarter increased $132 million, or 42.4 per cent over 1999, primarily due to
increased client trading volumes in both full-service and direct investing,
which benefited from strong equity markets. Increased deposit volumes also
contributed to increased revenues, partially offset by reduced trading returns
in the managed futures program. Expenses increased $82 million, or 33.5 per
cent due to higher revenue-driven compensation and other expenses associated
with the higher volumes.
Net income for the quarter increased $9 million, or 20.3 per cent from the first
quarter of 2000. Revenue growth was driven by increased volumes in both
full-service and direct investing, which benefited from strong equity markets
and from increased volumes in term deposits. Expenses increased due to higher
revenue-driven compensation, expenses associated with higher business volumes
and initiative spending.
During the second quarter, PCG continued to implement its key wealth management
strategies. The PCG specialized sales force, designed to provide quality advice
and proactive sales, grew to 102 Resident Investment Advisors and 166 Investment
Funds Specialists to be deployed in branches. BMO Nesbift Burns full-service
investing had an outstanding RRSP season, experiencing a 35 per cent increase in
accounts compared to last year. BMO Nesbitt Burns continued to expand its Online
investment program with the addition of top-ranked proprietary Mutual Fund
research. The direct investing line of business achieved very strong account and
asset growth and BMO InvestorLine continued the introduction of Veev wireless
trading launched earlier this year. PCG also introduced the BMO Investing portal
web-site to assist customers with wealth management product selection. U.S.
Private Banking continued its expansion initiative, focusing on staffing and
development of new locations in fast growing affluent communities.
PCG assets under management and administration ($187.5 billion) and term
deposits ($33.9 billion) grew to a total of $221.4 billion by the end of the
quarter. This represents an increase of $18.1 billion, or 8.9 per cent over the
prior quarter, and an increase of $28.2 billion, or 14.6 per cent from the
beginning of the fiscal year. PCG's wealth management businesses are committed
to providing integrated banking and investment services to meet rapidly changing
client needs in one of the fastest growing areas, in financial services today.
Investment Banking Group
The Investment Banking Group services the corporate and investment banking needs
of larger corporate and institutional clients.
Net income for the quarter was $180 million, an increase of $38 million, or 27.4
per cent from the comparable period in 1999. Revenues increased by $95 million,
or 16.7 per cent, driven by increased equity market activity resulting in higher
trading gains, commissions, merger and acquisition fees and underwriting fees.
This was partially offset by an overall decline in net interest margin as the
improvement in margin in the corporate loan portfolio was less than the decline
in margins in capital markets related businesses. Expenses were up $31 million,
or 10.2 per cent over last year, due to higher revenue-driven compensation.
Net income for the quarter increased $23 million, or 15.0 per cent from the
first quarter of 2000. Revenues were up $91 million, or 16.3 per cent primarily
due to strong equity market activity resulting in higher trading gains,
commissions, merger and acquisition fees and underwriting fees, partly offset by
lower net securities gains. Expenses increased $48 million, or 17.0 per cent,
mainly due to increased revenue-driven compensation.
During the quarter, the Investment Banking Group announced the creation of a BMO
Nesbitt Burns team to grow its U.S. media and telecommunications investment
banking and merchant banking businesses. It also announced the commitment of US
$450 million ($667 million CDN) to fund merchant banking investments in this
sector. In addition, the Securitization group that traditionally focused on
issuers and the Credit Investment Management Group that focused on investors,
were brought together under single leadership. The combination of the two groups
will leverage strong securitization and credit portfolio management capabilities
to provide additional products and services to both client groups. Debt Capital
Markets led the final senior bond issue for 407 International's refinancing of
its senior bridge credit facility. The $400 million issue was sold entirely to
Canadian investors.
BANK OF MONTREAL
FINANCIAL HIGHLIGHTS
(Canadian $ in millions except as noted)
For the 3 Months ended For the six months ended
Apr 30 Jan 31 Apr 30 Change Apr 30 Apr 30 Change from
2000 2000 1999 from 2000 2000 April 30 1999
Apr 30
2000
Net Income Statement
Net interest income
(TEB)(a) $ 1,084 1,081 1,112 (2.5)% 2,165 2,201 (1.6)%
Other income 1,200 1,042 849 41.4 2,242 1,694
Total revenue
(TEB)(a) 2,264 2,123 1,961 16.5 4,407 3,895 13
Provision for
Credit losses 100 100 80 25.0 200 160 25
Not-interest expense 1,348 1,254 1,271 6.2 2,602 2,503
Provision for income
taxes (TEB) (a) 322 279 231 39.2 601 472 27
Non-controlling interest
in subsidiaries 5 4 5 (9.6) 9 12 (27
Net income before
Goodwill 509 486 374 35.9 995 748 33
Amortization of goodwill
net of applicable income
tax 12 12 10 12.3 24 22 13
Net Income 497 474 364 36.6 971 726 33
Taxable equivalent
adjustment 35 31 35 (0.9) 66 71 (6
Per Commom Share ($)
Net income before Goodwill
-basic $ 1.51 1.72 1.30 0.51 3.53 2.59 0.9
-fully diluted 1.79 1.71 1.29 0.50 3.50 2.57
Net Incoem
-basic 1.76 1.68 1.26 0.50 3.44 2.51
-fully diluted 1.75 1.66 1.25 0.50 3.41 2.49
Dividends declared 0.50 0.50 0.47 0.03 1.00 0.94
Book Value per share 37.45 35.77 33.53 3.92 37.45 33.53
Market value per
share 53.75 48.15 60.80 (7.05) 53.75 60.80 (7.0)
Total market value of
common shares
($ billions) 14.4 12.9 16.2 (1.5) 14.4 16.2 (1
As at
Apr 30 Jan 31 Apr 30 Change from
2000 2000 1999 Apr 30 1999
Balance Sheet Summary
Assets $ 238,414 228,525 219,853 8.5%
Loans 136,697 133,148 132,984 2.8
Deposits 162,067 154,469 146,985 10.3
Capital funds 16,428 15,920 15,479 6.1
Common equity 10,037 9,571 8,916 12.6
Net impaired loans and
acceptances (283) (240) (212) (33.3)
Average Balances
Loans 136,538 135,859 134,806 1.3
Assets 233,354 230,195 224,762 3.8
For the 3 months ended For the 6 months ended
Apr 30 Jan 31 Apr 30 Apr 30 Apr 30
2000 2000 1999 2000 1999
Primary Financial Measures (%)(b)
5 year total shareholder return 18.2 17.5 23.4 18.2 23.4
Net economic profit ($millions) 226 201 132 427 282
Earnings per share growth 40.0 33.9 (5.3) 36.9 (3.9)
Return on Equity 19.8 19.0 15.5 19.4 15.3
Revenue growth 15.5 9.8 2.7 13.2 4.1
Expense-to-revenue ratio 59.1 59.0 64.8 59.1 64.3
Provision for credit losses as
a % of average loans and
acceptances 0.28 0.28 0.23 0.28 0.22
Gross impaired loans and
acceptances as a % of equity
and allowance for credit losses 3.71 8.89 8.36 9.71 8.36
Liquidity Ratio 30.1 29.9 28.3 30.1 28.3
Tier 1 Capital ratio 8.06 7.64 7.73 8.06 7.73
Credit rating AA- AA- AA- AA- AA-
Other financial ratios
(% except as noted) (b)
Total shareholder return (1.0) (12.0) (0.8) (1.0) (0.8)
Dividend yield 4.2 3.3 2.9 3.4 2.9
Price-to-earnings ratio(times) 9.4 9.3 13.2 9.4 13.2
Market to book value (times) 1.44 1.35 1.81 1.44 1.81
Cash earnings per share
- basic ($) 1.83 1.74 1.32 1.57 2.54
Cash return on common
shareholders equity 21.8 21.0 11.4 21.4 17.2
Return on average assets 0.87 0.62 0.86 0.84 0.64
Net interest margin 1.89 1.57 2.03 1.85 1.95
Other Income as a % of total
revenue 52.5 49.1 43.3 50.9 43.5
Expense growth 6.2 1.8 8.3 4.0 6.2
Tier 1 capital ratio-U.S. basis 7.67 7.63 7.38 7.67 7.38
Total capital ratio 11.13 10.99 10.85 11.13 10.85
Equity-to-assets ratio 5.1 5.1 5.1 5.1 5.1
(a) Reported on a taxable equivalent basis (TEB)
(b) For the period ended or as at, as appropriate.
(c) All ratios in this report are based on unrounded numbers
BANK OF MONTREAL
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
(Canadian $ in millions except number of common shares)
For the 3 months ended For the 6 months ended
Apr 30 Jan 31 Apr 30 Apr 30 Apr 30
2000 2000 1999 2000 1999
Interest, Dividend and Fee
income
Loans $ 2,654 2,448 2,321 5,103 4,887
Securities 673 701 611 1,374 1,248
Deposits with banks 263 231 260 494 537
----- ----- ----- ----- -----
3,590 3,381 3,192 6,971 6,672
Interest Expense
Deposits 1,905 1,754 1,482 3,659 3,212
Subordinated debt 83 88 63 169 169
Other liabilities 553 491 550 1,044 1,161
----- ----- ----- ----- -----
2,541 2,331 2,115 4,872 4,542
Net interest income 1,049 1,050 1,077 2,099 2,130
Provision for credit losses 100 100 80 200 160
Net interest Income After
Provision for Credit losses 949 950 997 1,899 1,970
Other Income
Deposit and payment service
charges 159 164 150 323 296
Lending fees 72 80 71 152 149
Capital market fees 341 224 185 565 369
Card services 47 53 48 100 94
Investment management and
Custodial fees 100 104 101 204 205
Mutual fund revenues 57 52 45 109 95
Trading revenues 140 77 92 217 157
Securitization revenues 81 70 68 151 143
Other fees and commissions 203 218 90 421 186
----- ----- ----- ----- -----
1,200 1,042 849 2,242 1,694
Net Interest and Other Income 2,149 1,992 1,846 4,141 3,664
Non-Interest Expense
Salaries and employee benefits 805 734 698 1,539 1,365
Premises and equipment 272 257 274 529 548
Communications 64 85 68 129 134
Other expenses 201 194 226 396 444
---- ---- ---- ----- -----
1,342 1,250 1,266 2,592 2,492
Amortization of intangible
assets 6 4 5 10 11
Total non-interest expense 1,348 1,254 1,271 2,602 2,503
Income Before Provision for
Income Taxes, Non-Controlling
Interest in Subsidiaries and
Goodwill 501 738 576 1,539 1,161
Income Taxes 287 248 196 535 401
--- --- --- ----- -----
514 490 379 1,004 760
Non-controlling Interest 5 4 5 9 12
Net income before Goodwill 509 466 374 995 748
Amortization of goodwill, net
of applicable income tax 12 12 10 24 22
Net Income $ 497 474 384 971 726
Dividends Declared
- preferred shares $ 28 25 30 51 60
- common shares $ 134 134 125 268 250
Average number of Common
Shares Outstanding 267,820,009 267,248,718 265,695,473 267,531,225 265,317,845
Average Assets 233,354 230,195 224,762 231,757 227,510
Net income Per Common
Share Before Goodwill
Basic $ 1.81 1.72 1.30 3.63 2.59
Fully Diluted 1.79 1.71 1.29 3.50 2.57
Net Income per Common
Share
Basic 1.76 1.68 1.26 3.44 2.51
Fully Diluted 1.75 1.66 1.25 3.41 2.49
Note: Reporting under United States generally accepted accounting principles
would have resulted in consolidated net income of $479, basic earnings per share
of $1.69 and fully diluted earnings per share of $1.68 for the three months and
$935, $3.31 and $3.27 respectively, for the six onths ended
April 30, 2000
BANK OF MONTREAL CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
(Canadian $ in millions) As at
April 30 January 31 October 31 April 31
2000 2000 1999 1999
Cash resources $ 23,257 23,441 24,036 23,215
Securities 48,398 44,913 43,273 39,035
71,655 68,354 67,309 62,250
Loans
Residential mortgages 39,190 38,598 38,189 36,196
Consumer instalment and other
Personal loans 17,589 17,052 16,912 16,226
Credit card loans 1,275 1,217 1,160 919
Loans to businesses and
governments 58,887 59,727 57,998 51,999
Securities purchased under
resale agreements 21,228 17,958 25,090 28,903
Allowance for credit losses 138,169 134,552 139,349 134,243
(1,472) (1,404) (1,348) (1,259)
136,697 133,148 138,001 132,984
Customers' liability under
acceptances 8,227 8,195 6,753 6,530
Other assets 21,835 18,828 18,552 17,889
Total Assets $ 238,414 228,525 230,615 219,653
Deposits
Banks $ 30,248 27,869 30,398 27,930
Businesses and govemments 68,253 64,564 65,459 58,199
Individuals 63,566 62,O36 61,017 60,836
162,067 154,469 156,874 146,965
Acceptances 8,227 8,195 6,753 6,530
Securities sold but not yet
purchased 14,334 14,161 10,450 9,181
Securities sold under repurchase
agreements 18,425 19,504 24,177 26,526
Other liabilities 18,933 16,276 16,668 14,972
59,919 58,136 58,048 57,209
Subordinated debt 4,721 4,688 4,712 4,699
Shareholders' equity
Share capital
Preferred shares 1,670 1,661 1,668 1,864
Common shares 3,219 3,205 3,190 3,152
Retained earnings 6,818 6,366 6,123 5,764
11,707 11,232 10,981 10,780
Total Liabilities and
Sharehold Equity $ 238,414 228,525 230,615 219,653
Notes:
1. These consolidated financial statements should be read in conjuntion with
our consolidated financial statements for the year ended October 31, 1999
as set out on pages 73 to 99 of our 1999 Annual Report. These consolidated
financial statements have been prepared in accordance with Canadian
generally accepted accounting principles, including the requirements of the
Superintendent of Financial Institutions Canada, using the same accounting
policies and methods of computation as were used for our consolidated
financial statements for the year ended October 31, 1999.
2. During the quarter the aggregate consideration for which our shares may
be issued was increased to an unlimited amount upon approval by our
shareholders and regulators. For additional information refer to
pages 86 and 87 of our Annual Report, and pages 10 to 12 of our Proxy
Circular.
END
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