Q4 2024 Bank of Montreal Earnings Call Transcript
Key Points
- Bank of Montreal (BMO) delivered resilient operating performance despite a challenging economic environment, with pre-provision, pretax earnings growing 5% to a record $13.4 billion.
- The bank achieved positive operating leverage for the full year at 1.6%, with an improved efficiency ratio by almost 100 basis points to 58.6%.
- BMO's core customer base grew significantly, with deposits increasing by $61 billion or 9%, and the bank successfully transitioned to a Category 3 bank in the US.
- The CET1 ratio increased by 110 basis points to 13.6%, providing ample capacity to support clients and return excess capital to shareholders.
- BMO announced a dividend increase of $0.04 to $1.59 per share, a 5% increase over last year, and plans to repurchase common shares under an NCIB.
- Net income for the year was $7.4 billion, and earnings per share were $9.68, both down from the previous year due to higher impaired loss rates.
- Credit performance deteriorated more than anticipated, with impaired loss rates exceeding historical ranges, impacting overall results.
- Adjusted EPS for the fourth quarter was $1.90, down from $2.93 last year, with net income down 31% due to higher provisions for credit losses (PCLs).
- The bank experienced elevated provisions for credit losses, with a total provision of $1.5 billion in the fourth quarter, reflecting higher impaired provisions.
- BMO's Capital Markets segment saw a decline in net income year-over-year, primarily due to elevated PCLs and lower results in certain areas.
This conference is being recorded. (spoken in foreign language) All participants please stand by, your meeting is ready to begin. Good morning, and welcome to BMO Financial Group's Q4 2024 earnings release and conference call for December 5, 2024. Your host for today is Christine Viau. Please go ahead.
Thank you, and good morning. We will begin with remarks from Darryl White, BMO's CEO; followed by Tayfun Tuzun, our Chief Financial Officer; and Piyush Agrawal, our Chief Risk Officer. Also present today to take questions are Ernie Johannson, Head of BMO North American Personal and Business Banking; Nadim Hirji, Head of BMO Commercial Banking; Alan Tannenbaum, Head of BMO Capital Markets; Deland Kamanga, Head of BMO Wealth Management; and Darrel Hackett, BMO US CEO. As our call will end at 9:30, I would ask you to limit to one question during the Q&A to give everyone a chance to participate.
As noted on slide 2, forward-looking statements may be made during this call, which involve
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