Topic |
EDTF Disclosure |
Page number |
||||||||||||
Annual Report |
SFI |
SRCI |
||||||||||||
General |
1. Risk-related information in each report, including an index for easy navigation |
78-118 | Index | Index | ||||||||||
2. Risk terminology, measures and key parameters |
82-118,126-128 |
|||||||||||||
3. Top and emerging risks |
78-80 | |||||||||||||
4. Plans to meet new key regulatory ratios once applicable rules are finalized |
72 | |||||||||||||
Risk Governance, Risk Management and Business Model |
5. Risk management and governance framework, processes and key functions |
82-86 | ||||||||||||
6. Risk culture, risk appetite and procedures to support the culture |
86 | |||||||||||||
7. Risks that arise from business models and activities |
84-85 | |||||||||||||
8. Stress testing within the risk governance and capital frameworks |
85-86 | |||||||||||||
Capital Adequacy and Risk-Weighted Assets (RWA) |
9. Pillar 1 capital requirements |
70-73 | 5-6,13 | |||||||||||
10. Composition of capital components and reconciliation of the accounting balance sheet to the regulatory balance sheet. A main features template can be found at: https://www.bmo.com/main/about-bmo/investor-relations/regulatory-disclosure |
73-74 | 5-7,16-17 | ||||||||||||
11. Flow statement of movements in regulatory capital, including changes in Common Equity Tier 1 Capital, Additional Tier 1 Capital and Tier 2 Capital |
8 | |||||||||||||
12. Capital management and strategic planning |
69,75-76 | |||||||||||||
13. Risk-weighted assets (RWA) by operating group |
74 | 14 | ||||||||||||
14. Analysis of capital requirements for each method used in calculating RWA |
73-74,87-90 |
|
14-15,22-44, 51-62,83-84 |
| ||||||||||
15. Tabulate credit risk in the banking book for Basel asset classes and major portfolios |
|
22-44,46-62, 84 |
| |||||||||||
16. Flow statement that reconciles movements in RWA by credit risk and market risk |
45,80 | |||||||||||||
17. Basel validation and back-testing process, including estimated and actual loss parameter information |
112 | 85-89 | ||||||||||||
Liquidity |
18. Management of liquidity needs and liquidity reserve held to meet those needs |
100-106 | ||||||||||||
Funding |
19. Encumbered and unencumbered assets disclosed by balance sheet category |
102-103 | 36-37 | |||||||||||
20. Consolidated total assets, liabilities and off-balance sheet commitments by remaining contractual maturity |
107-108 | |||||||||||||
21. Analysis of funding sources and funding strategy |
103-104 | |||||||||||||
Market Risk |
22. Linkage of trading and non-trading market risk to the consolidated balance sheet |
99 | ||||||||||||
23. Significant trading and non-trading market risk factors |
95-99 | |||||||||||||
24. Market risk model assumptions, validation procedures and back-testing |
95-99,112 | |||||||||||||
25. Primary techniques for risk measurement and risk assessment, including risk of loss |
95-99 | |||||||||||||
Credit Risk |
26. Analysis of credit risk profile, exposures and concentration |
87-94,159-166 | 24-33 | 14-79 | ||||||||||
27. Policies to identify impaired loans and renegotiated loans |
159-161,166 | |||||||||||||
28. Reconciliation of opening and closing balances of impaired loans and allowance for credit losses |
93,164 | |||||||||||||
29. Counterparty credit risk arising from derivative transactions |
|
87-88, 94,178-179 |
51-67 | |||||||||||
30. Credit risk mitigation |
|
87-88, 162,170,209 |
21,46-48,63 | |||||||||||
Other Risks |
31. Discussion of other risks |
82-84,109-118 | ||||||||||||
32. Publicly known risk events involving material or potentially material loss events |
109-118 |
BMO Financial Group 206th Annual Report 2023 | 19 |
Index |
21 |
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22 |
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23 |
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26 |
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27 |
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28 |
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32 |
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33 |
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34 |
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42 |
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42 |
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43 |
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44 |
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48 |
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52 |
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56 |
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59 |
61 |
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63 |
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64 |
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67 |
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67 |
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69 |
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76 |
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78 |
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119 |
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119 |
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122 |
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123 |
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123 |
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124 |
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125 |
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126 |
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135 |
20 |
BMO Financial Group 206th Annual Report 2023 |
BMO Financial Group 206th Annual Report 2023 | 21 |
• |
Thriving economy |
• |
Sustainable future |
• |
Inclusive society |
• |
World-class |
• |
Winning culture |
• |
Digital First |
• |
Be our clients’ lead partner transition net zero world |
• |
Superior management risk, capital funding |
• |
Integrity |
• |
Diversity |
• |
Responsibility |
• |
Empathy |
22 |
BMO Financial Group 206th Annual Report 2023 |
Financial objectives (adjusted) | Reported basis | Adjusted basis (1) | ||||||||||||||||||||||||||||||||
As at and for the periods ended October 31, 2023 | 1-year | 3-year (2) |
5-year (2) |
1-year |
3-year (2) |
5-year (2) |
||||||||||||||||||||||||||||
Earnings per share growth (%) |
7-10% |
(71.6 | ) | (9.1 | ) | (7.0 | ) | (11.4 | ) | 15.0 | 5.5 | |||||||||||||||||||||||
Average return on equity (%) |
15% or more | 6.0 | 14.6 | 13.3 | 12.3 | 14.7 | 13.6 | |||||||||||||||||||||||||||
Average return on tangible common equity (%) |
18% or more | 8.2 | 16.8 | 15.5 | 15.8 | 17.1 | 15.9 | |||||||||||||||||||||||||||
Operating leverage, net of CCPB (%) (3) |
2% or more | (45.9 | ) | (6.8 | ) | (3.2 | ) | (8.2 | ) | – | 0.7 | |||||||||||||||||||||||
Common Equity Tier 1 Ratio (%) |
Exceed regulatory requirement | 12.5 | na | na | na | na | na | |||||||||||||||||||||||||||
Total shareholder return (%) |
Top-tier |
(12.5 | ) | 14.3 | 5.6 | na | na | na |
(1) | Adjusted results and measures are non-GAAP amounts and measures and are discussed in the Non-GAAP and Other Financial Measures section. |
(2) | The 3-year and 5-year EPS growth rate and operating leverage, net of CCPB, reflect compound annual growth rates (CAGR). |
(3) | Operating leverage, net of CCPB, on a reported and adjusted basis presented in this table are non-GAAP measures and are discussed in the Non-GAAP and Other Financial Measures section. |
Earnings per Share Growth All references to earnings per share (EPS) are to diluted EPS, unless otherwise indicated. EPS was $5.68 in 2023, a decrease of $14.31 or 72% from $19.99 in 2022. Adjusted EPS was $11.73, a decrease of $1.50 or 11% from $13.23 in 2022. The decrease in EPS reflected lower earnings and a higher number of common shares outstanding. Net income available to common shareholders decreased 70% year-over-year on a reported basis, and decreased 5% on an adjusted basis. The average number of diluted common shares outstanding increased 7% from 2022, reflecting common shares issued during the year through a public offering, private placements, the dividend reinvestment plan, acquisitions and the stock option plan. |
||
Earnings per Share (EPS) | ||
BMO Financial Group 206th Annual Report 2023 | 23 |
Return on Equity and Return on Tangible Common Equity Reported return on equity (ROE) was 6.0% in 2023 and adjusted ROE was 12.3%, compared with 22.9% and 15.2%, respectively, in 2022. Reported ROE decreased due to lower net income, primarily due to lower revenue in the current year resulting from the impact of fair value management actions related to the acquisition of Bank of the West, and higher expenses in the current year due to higher acquisition and integration-related costs. Reported and adjusted ROE decreased due to the impact of share issuances, as well as lower earnings. There was a decrease of $9,272 million in reported net income available to common shareholders and a decrease of $476 million in adjusted net income available to common shareholders in the current year. Average common shareholders’ equity increased $9.4 billion or 16% from 2022, primarily due to the issuance of common shares and growth in retained earnings, partially offset by a decrease in accumulated other comprehensive income. Reported return on tangible common equity (ROTCE) was 8.2%, compared with 25.1% in 2022, and adjusted ROTCE was 15.8%, compared with 16.6% in 2022. Reported and adjusted ROTCE decreased due to lower earnings, partially offset by lower tangible common equity. Book value per share increased 2% from the prior year to $97.17, reflecting the increase in shareholders’ equity. |
||
Return on Common Shareholders’ Equity (ROE) Return on Tangible Common Equity (ROTCE) | ||
Efficiency Ratio and Operating Leverage BMO’s reported gross efficiency ratio was 68.0% in 2023, compared with 48.0% in 2022. On a net revenue basis (1) , the reported efficiency ratio was 72.5%, compared with 47.1% in 2022, and the adjusted efficiency ratio was 59.8%, compared with 55.8% in 2022. The increase in the efficiency ratio reflected revenue growth that was more than offset by higher expense growth, as well as the impact of Bank of the West, which operated at a higher efficiency ratio.Reported operating leverage was negative 38.5%. On a net revenue basis, reported operating leverage was negative 45.9%, and adjusted operating leverage was negative 8.2%. (1) Net revenue comprises revenue, net of insurance claims, commissions and changes in policy benefit liabilities (CCPB). |
||
Efficiency Ratio (or expense-to-revenue non-interest expense divided by total revenue (on a taxable equivalent basis in the operating groups), expressed as a percentage.Efficiency Ratio, net of insurance claims, commissions and changes in policy benefits (CCPB) non-interest expense divided by total revenue, net of CCPB (on a taxable equivalent basis in the operating groups), expressed as a percentage. Adjusted efficiency ratio, net of CCPB, is calculated in the same manner as efficiency ratio, net of CCPB, utilizing adjusted revenue, net of CCPB, and adjusted non-interest expense.Operating Leverage non-interest expense, and adjusted operating leverage is the difference between the growth rates of adjusted revenue and adjusted non-interest expense.Operating Leverage, net of insurance claims, commissions and changes in policy benefit liabilities (CCPB) non-interest expense. Adjusted operating leverage, net of CCPB, is calculated using the growth rates of adjusted net revenue and adjusted non-interest expense. The bank evaluates performance using adjusted net revenue. |
24 |
BMO Financial Group 206th Annual Report 2023 |
Common Equity Tier 1 Ratio Our Common Equity Tier 1 (CET1) Ratio was 12.5% as at October 31, 2023, compared with 16.7% as at October 31, 2022. Our CET1 Ratio was elevated at the end of fiscal 2022, primarily driven by fair value management actions related to the acquisition of Bank of the West. The CET1 Ratio decreased from the prior year, primarily as a result of the acquisition and integration of Bank of the West. |
||
Common Equity Tier 1 (CET1) Ratio | ||
For the year ended October 31 | 2023 |
2022 | 2021 | 2020 | 2019 | 3-year CAGR |
5-year CAGR |
|||||||||||||||||||||
Closing market price per common share ($) |
104.79 |
125.49 | 134.37 | 79.33 | 97.50 | 9.7 |
1.3 |
|||||||||||||||||||||
Dividends paid ($ per share) |
5.72 |
5.11 | 4.24 | 4.21 | 3.99 | 10.8 |
9.0 |
|||||||||||||||||||||
Dividend yield (%) |
5.5 |
4.3 | 3.2 | 5.3 | 4.2 | nm |
nm |
|||||||||||||||||||||
Increase (decrease) in share price (%) |
(16.5 |
) |
(6.6 | ) | 69.4 | (18.6 | ) | (0.9 | ) | nm |
nm |
|||||||||||||||||
Total annual shareholder return (%) (2) |
(12.5 |
) |
(3.1 | ) | 75.9 | (14.6 | ) | 3.2 | 14.3 |
5.6 |
||||||||||||||||||
Canadian peer group average (excluding BMO) (3) |
(8.8 |
) |
(6.2 | ) | 56.1 | (11.5 | ) | 11.4 | 10.0 |
5.5 |
(1) | Compound annual growth rate (CAGR) expressed as a percentage. |
(2) | Total annual shareholder return assumes reinvestment of quarterly dividends and therefore does not equal the sum of dividend and share price returns in the table. |
(3) | As at October 31, 2023; peers: BNS, CIBC, NB, RBC, TD. |
BMO Financial Group 206th Annual Report 2023 | 25 |
• |
Launched BMO EMpower TM 2.0, pledging more than US$40 billion to support organizations in communities across the United States focused on advancing home ownership, growing small businesses, strengthening communities, and creating a more equitable society. |
• |
Exceeded BMO’s annual Employee Giving Campaign target with our employees contributing more than $31 million to the United Way and thousands of other community organizations across North America, while also setting a new record for pledges. |
• |
Announced the 2022 recipients of $150,000 in grants awarded to twelve Canadian women entrepreneurs as part of the BMO Celebrating Women Grant Program for women-owned businesses across Canada, in collaboration with Deloitte. The program is in its third year and has supported 56 women-owned businesses to date in Canada, with grants totalling $530,000. |
• |
Were named to the United Nations Principles for Responsible Banking, Nature Target Setting Working Group, focused on developing guidance for setting biodiversity and nature targets – the only Canadian bank among 34 signatories from 24 countries. |
• |
Invested $15 million in the Feel Out Loud campaign, sponsored by Kids Help Phone to expand access to clinical care and services in Canada through its e-mental health platform for youth. As a founding partner of Kids Help Phone, and with the help of our employees, we have raised more than $40 million to support this campaign to date. |
• |
Continued to drive progress for mental health treatment with a $5 million donation to the Centre for Addiction and Mental Health (CAMH) to support independent research at its Krembil Centre for Neuroinformatics and help build a research centre. We also donated $2 million to the Royal Ottawa Health Care Group (The Royal) to support the newly-established BMO Innovative Clinic for Depression, providing more treatment options for people living with depression. |
• |
Released Wîcihitowin, our third annual Indigenous Partnerships and Progress Report, highlighting our focus on advancing education, employment and economic empowerment in First Nations, Inuit and Métis communities. In addition, we announced six new members of our Indigenous Advisory Council (IAC), which now includes leaders from across Canada. |
• |
Ranked among the most sustainable companies on the Dow Jones Sustainability Indices (DJSI). In addition, BMO ranked in the 95 th percentile among banks globally and earned the highest possible score in the areas of Environmental Reporting, Social Reporting and Financial Inclusion. |
• |
Named one of Corporate Knights |
• |
Included in Corporate Knights’ top-quartile scores in board gender diversity and the representation of visible minorities in our executive leadership – the only Canadian bank named to this listing. We also received a top-quartile Sustainable Revenue score, demonstrating our ongoing commitment to sustainable financing and responsible investing. |
• |
Recognized by the World Benchmarking Alliance (WBA) as the world’s top-ranked financial institution for supporting progress toward a just and sustainable economy. |
• |
Included for the eighth consecutive year in the Bloomberg Gender-Equality Index (GEI), in recognition of BMO’s global leadership in gender equity and inclusion within the workplace and the community, and for publicly demonstrating our commitment to equality and the advancement of women. |
• |
Recognized by Ethisphere Institute as one of the World’s Most Ethical Companies for the sixth consecutive year, remaining the only Canadian bank to be honoured with this designation since its inception in 2007. The designation affirms our commitment to doing what is right and operating with transparency, good governance and integrity in support of a thriving economy, a sustainable future and an inclusive society. |
• |
Included for the third consecutive year in the 2023 Women Lead Here list published by the Globe and Mail |
• |
Received a top score on the Disability Equality Index (DEI) for the eighth consecutive year. BMO was named one of the Best Places to Work for Disability Inclusion by Disability:IN and the American Association of People with Disabilities (AAPD), in recognition of our continued focus and progress on building an inclusive society for our employees and the communities we serve. |
26 |
BMO Financial Group 206th Annual Report 2023 |
(Canadian $ in millions, except as noted) | 2023 |
2022 | ||||||
Summary Income Statement (1) |
||||||||
Net interest income |
18,681 |
15,885 | ||||||
Non-interest revenue |
12,518 |
17,825 | ||||||
Revenue |
31,199 |
33,710 | ||||||
Insurance claims, commissions and changes in policy benefit liabilities (CCPB) |
1,939 |
(683 | ) | |||||
Revenue, net of CCPB (2) |
29,260 |
34,393 | ||||||
Provision for credit losses on impaired loans |
1,180 |
502 | ||||||
Provision for (recovery of) credit losses on performing loans |
998 |
(189 | ) | |||||
Total provision for credit losses (PCL) |
2,178 |
313 | ||||||
Non-interest expense |
21,219 |
16,194 | ||||||
Provision for income taxes |
1,486 |
4,349 | ||||||
Net income |
4,377 |
13,537 | ||||||
Net income available to common shareholders |
4,034 |
13,306 | ||||||
Adjusted net income |
8,675 |
9,039 | ||||||
Adjusted net income available to common shareholders |
8,332 |
8,808 | ||||||
Common Share Data ($, except as noted) (1) |
||||||||
Basic earnings per share |
5.69 |
20.04 | ||||||
Diluted earnings per share |
5.68 |
19.99 | ||||||
Adjusted diluted earnings per share |
11.73 |
13.23 | ||||||
Book value per share |
97.17 |
95.60 | ||||||
Closing share price |
104.79 |
125.49 | ||||||
Number of common shares outstanding (in millions) |
||||||||
End of period |
720.9 |
677.1 | ||||||
Average basic |
709.4 |
664.0 | ||||||
Average diluted |
710.5 |
665.7 | ||||||
Market capitalization ($ billions) |
75.5 |
85.0 | ||||||
Dividends declared per share |
5.80 |
5.44 | ||||||
Dividend yield (%) |
5.5 |
4.3 | ||||||
Dividend payout ratio (%) |
102.0 |
27.1 | ||||||
Adjusted dividend payout ratio (%) |
49.4 |
41.0 | ||||||
Financial Measures and Ratios (%) (1) |
||||||||
Return on equity |
6.0 |
22.9 | ||||||
Adjusted return on equity |
12.3 |
15.2 | ||||||
Return on tangible common equity |
8.2 |
25.1 | ||||||
Adjusted return on tangible common equity |
15.8 |
16.6 | ||||||
Efficiency ratio |
68.0 |
48.0 | ||||||
Adjusted efficiency ratio, net of CCPB (2) |
59.8 |
55.8 | ||||||
Operating leverage |
(38.5 |
) |
19.6 | |||||
Adjusted operating leverage, net of CCPB (2) |
(8.2 |
) |
1.3 | |||||
Net interest margin on average earning assets |
1.63 |
1.62 | ||||||
Net interest margin on average earning assets excluding trading revenue and trading assets |
1.82 |
1.72 | ||||||
Effective tax rate |
25.3 |
24.3 | ||||||
Adjusted effective tax rate |
22.3 |
22.8 | ||||||
Total PCL-to-average |
0.35 |
0.06 | ||||||
PCL on impaired loans-to-average |
0.19 |
0.10 | ||||||
Liquidity coverage ratio (LCR) (3) |
128 |
135 | ||||||
Net stable funding ratio (NSFR) (3) |
115 |
114 | ||||||
Balance Sheet and Other Information (as at October 31, $ millions, except as noted) |
||||||||
Assets |
1,293,276 |
1,139,199 | ||||||
Average earning assets |
1,145,632 |
979,341 | ||||||
Gross loans and acceptances |
668,396 |
567,191 | ||||||
Net loans and acceptances |
664,589 |
564,574 | ||||||
Deposits |
909,676 |
769,478 | ||||||
Common shareholders’ equity |
70,051 |
64,730 | ||||||
Total risk-weighted assets (4) |
424,197 |
363,997 | ||||||
Assets under administration |
808,985 |
744,442 | ||||||
Assets under management |
332,947 |
305,462 | ||||||
Capital Ratios (%) (4) |
||||||||
Common Equity Tier 1 Ratio |
12.5 |
16.7 | ||||||
Tier 1 Capital Ratio |
14.1 |
18.4 | ||||||
Total Capital Ratio |
16.2 |
20.7 | ||||||
Leverage Ratio |
4.2 |
5.6 | ||||||
TLAC Ratio |
27.0 |
33.1 | ||||||
Foreign Exchange Rates ($) |
||||||||
As at October 31, Canadian/U.S. dollar |
1.3868 |
1.3625 | ||||||
Average Canadian/U.S. dollar |
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 the 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. |
BMO Financial Group 206th Annual Report 2023 | 27 |
28 |
BMO Financial Group 206th Annual Report 2023 |
(Canadian $ in millions, except as noted) | 2023 |
2022 | 2021 | |||||||||
Reported Results |
||||||||||||
Net interest income |
18,681 |
15,885 | 14,310 | |||||||||
Non-interest revenue |
12,518 |
17,825 | 12,876 | |||||||||
Revenue |
31,199 |
33,710 | 27,186 | |||||||||
Insurance claims, commissions and changes in policy benefit liabilities (CCPB) |
(1,939 |
) |
683 | (1,399 | ) | |||||||
Revenue, net of CCPB |
29,260 |
34,393 | 25,787 | |||||||||
Provision for credit losses |
(2,178 |
) |
(313 | ) | (20 | ) | ||||||
Non-interest expense |
(21,219 |
) |
(16,194 | ) | (15,509 | ) | ||||||
Income before income taxes |
5,863 |
17,886 | 10,258 | |||||||||
Provision for income taxes |
(1,486 |
) |
(4,349 | ) | (2,504 | ) | ||||||
Net income |
4,377 |
13,537 | 7,754 | |||||||||
Diluted EPS ($) |
5.68 |
19.99 | 11.58 | |||||||||
Adjusting Items Impacting Revenue (Pre-tax) |
||||||||||||
Impact of divestitures (1) |
– |
(21 | ) | 29 | ||||||||
Management of fair value changes on the purchase of Bank of the West (2) |
(2,011 |
) |
7,713 | – | ||||||||
Legal provision (including related interest expense and legal fees) (3) |
(30 |
) |
(515 | ) | – | |||||||
Impact of Canadian tax measures (4) |
(138 |
) |
– | – | ||||||||
Impact of adjusting items on revenue (pre-tax) |
(2,179 |
) |
7,177 | 29 | ||||||||
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) |
(2,045 |
) |
(326 | ) | (9 | ) | ||||||
Amortization of acquisition-related intangible assets (7) |
(357 |
) |
(31 | ) | (88 | ) | ||||||
Impact of divestitures (1) |
– |
(16 | ) | (886 | ) | |||||||
Legal provision (including related interest expense and legal fees) (3) |
3 |
(627 | ) | – | ||||||||
Restructuring (costs) reversals (8) |
– |
– | 24 | |||||||||
Impact of Canadian tax measures (4) |
(22 |
) |
– | – | ||||||||
Impact of adjusting items on non-interest expense (pre-tax) |
(2,421 |
) |
(1,000 | ) | (959 | ) | ||||||
Impact of adjusting items on reported net income (pre-tax) |
(5,305 |
) |
6,177 | (930 | ) | |||||||
Adjusting Items Impacting Revenue (After-tax) |
||||||||||||
Impact of divestitures (1) |
– |
(23 | ) | 22 | ||||||||
Management of fair value changes on the purchase of Bank of the West (2) |
(1,461 |
) |
5,667 | – | ||||||||
Legal provision (including related interest expense and legal fees) (3) |
(23 |
) |
(382 | ) | – | |||||||
Impact of Canadian tax measures (4) |
(115 |
) |
– | – | ||||||||
Impact of adjusting items on revenue (after-tax) |
(1,599 |
) |
5,262 | 22 | ||||||||
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) |
(1,533 |
) |
(245 | ) | (7 | ) | ||||||
Amortization of acquisition-related intangible assets (7) |
(264 |
) |
(23 | ) | (66 | ) | ||||||
Impact of divestitures (1) |
– |
(32 | ) | (864 | ) | |||||||
Legal provision (including related interest expense and legal fees) (3) |
2 |
(464 | ) | – | ||||||||
Restructuring (costs) reversals (8) |
– |
– | 18 | |||||||||
Impact of Canadian tax measures (4) |
(16 |
) |
– | – | ||||||||
Impact of adjusting items on non-interest expense (after-tax) |
(1,811 |
) |
(764 | ) | (919 | ) | ||||||
Adjusting Items Impacting Provision for Income Taxes |
||||||||||||
Impact of Canadian tax measures (4) |
(371 |
) |
– | – | ||||||||
Impact of adjusting items on reported net income (after-tax) |
(4,298 |
) |
4,498 | (897 | ) | |||||||
Impact on diluted EPS ($) |
(6.05 |
) |
6.76 | (1.38 | ) | |||||||
Adjusted Results |
||||||||||||
Net interest income |
19,094 |
16,352 | 14,310 | |||||||||
Non-interest revenue |
14,284 |
10,181 | 12,847 | |||||||||
Revenue |
33,378 |
26,533 | 27,157 | |||||||||
Insurance claims, commissions and changes in policy benefit liabilities (CCPB) |
(1,939 |
) |
683 | (1,399 | ) | |||||||
Revenue, net of CCPB |
31,439 |
27,216 | 25,758 | |||||||||
Provision for credit losses |
(1,473 |
) |
(313 | ) | (20 | ) | ||||||
Non-interest expense |
(18,798 |
) |
(15,194 | ) | (14,550 | ) | ||||||
Income before income taxes |
11,168 |
11,709 | 11,188 | |||||||||
Provision for income taxes |
(2,493 |
) |
(2,670 | ) | (2,537 | ) | ||||||
Net income |
8,675 |
9,039 | 8,651 | |||||||||
Diluted EPS ($) |
11.73 |
13.23 | 12.96 |
BMO Financial Group 206th Annual Report 2023 | 29 |
(1) | Reported net income included the impact of divestitures related to the sale of our EMEA and U.S. Asset Management businesses and our Private Banking business. Fiscal 2022 included a gain of $6 million ($8 million pre-tax) related to the transfer of certain U.S. asset management clients and a $29 million (pre-tax and after-tax) loss related to foreign currency translation reclassified from accumulated other comprehensive income, both recorded in non-interest revenue, and expenses of $32 million ($16 million pre-tax), including taxes of $22 million on closing of the sale of the business recorded in non-interest expense. Fiscal 2021 included a $779 million (pre-tax and after-tax) write-down of goodwill related to the sale of our EMEA and U.S. Asset Management businesses recorded in non-interest expense, a $22 million ($29 million pre-tax) net gain on the sale of our Private Banking business recorded in non-interest revenue, and $85 million ($107 million pre-tax) of divestiture-related costs for both transactions recorded in non-interest expense. These amounts were recorded in Corporate Services. |
(2) | Fiscal 2023 reported net income included a loss of $1,461 million ($2,011 million pre-tax) 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, comprising $1,628 million of mark-to-market pre-tax), comprising $7,665 million of mark-to-market non-trading interest income. These amounts were recorded in Corporate Services. For further information on this acquisition, refer to the Recent Acquisitions section. |
(3) | Fiscal 2023 reported net income included the impact of a lawsuit associated with a predecessor bank, M&I Marshall and Ilsley Bank, of $21 million ($27 million pre-tax), comprising interest expense of $30 million and a net non-interest expense recovery of $3 million. Fiscal 2022 included a 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. |
(4) | Fiscal 2023 reported net income included the impact of certain tax measures enacted by the Canadian government. These tax measures 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, and 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. These amounts were recorded in Corporate Services. |
(5) | Fiscal 2023 reported net income included a 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) | Fiscal 2023 reported net income included acquisition and integration costs of $1,533 million ($2,045 million pre-tax), comprising $1,520 million ($2,027 million pre-tax) related to Bank of the West, $4 million ($5 million pre-tax) related to Radicle and Clearpool, and $9 million ($13 million pre-tax) related to AIR MILES. Fiscal 2022 included acquisition and integration costs of $245 million ($326 million pre-tax), comprising $237 million ($316 million pre-tax) related to Bank of the West and $8 million ($10 million pre-tax) related to Radicle, Clearpool and KGS-Alpha. Fiscal 2021 included acquisition and integration costs of $7 million ($9 million pre-tax) related to Clearpool and KGS-Alpha. These amounts were recorded in non-interest expense. Bank of the West acquisition and integration costs were recorded in Corporate Services; Radicle, Clearpool and KGS-Alpha costs were recorded in BMO Capital Markets; and AIR MILES costs were recorded in Canadian P&C. |
(7) | Amortization of acquisition-related intangible assets of $264 million ($357 million pre-tax) in fiscal 2023, $23 million ($31 million pre-tax) in fiscal 2022, and $66 million ($88 million pre-tax) in fiscal 2021 were recorded in non-interest expense in the related operating group. |
(8) | Fiscal 2021 reported net income included a partial reversal of $18 million ($24 million pre-tax) of restructuring charges related to severance recorded in 2019 in non-interest expense, in Corporate Services. |
(Canadian $ in millions, except as noted) |
Canadian P&C |
U.S. P&C |
Total P&C |
BMO Wealth Management |
BMO Capital Markets |
Corporate Services |
Total Bank |
U.S. Segment (US$ in millions) |
||||||||||||||||||||||||
2023 |
||||||||||||||||||||||||||||||||
Reported net income (loss) |
3,718 |
2,724 |
6,442 |
1,126 |
1,682 |
(4,873 |
) |
4,377 |
90 |
|||||||||||||||||||||||
Acquisition and integration costs |
9 |
– |
9 |
– |
4 |
1,520 |
1,533 |
1,124 |
||||||||||||||||||||||||
Amortization of acquisition-related intangible assets |
6 |
234 |
240 |
4 |
20 |
– |
264 |
186 |
||||||||||||||||||||||||
Management of fair value changes on the purchase of Bank of the West |
– |
– |
– |
– |
– |
1,461 |
1,461 |
1,093 |
||||||||||||||||||||||||
Legal provision (including related interest expense and legal fees) |
– |
– |
– |
– |
– |
21 |
21 |
15 |
||||||||||||||||||||||||
Impact of Canadian tax measures |
– |
– |
– |
– |
– |
502 |
502 |
– |
||||||||||||||||||||||||
Initial provision for credit losses on purchased performing loans |
– |
– |
– |
– |
– |
517 |
517 |
379 |
||||||||||||||||||||||||
Adjusted net income (loss) |
3,733 |
2,958 |
6,691 |
1,130 |
1,706 |
(852 |
) |
8,675 |
2,887 |
|||||||||||||||||||||||
2022 |
||||||||||||||||||||||||||||||||
Reported net income |
3,826 | 2,497 | 6,323 | 1,251 | 1,772 | 4,191 | 13,537 | 6,079 | ||||||||||||||||||||||||
Acquisition and integration costs |
– | – | – | – | 8 | 237 | 245 | 185 | ||||||||||||||||||||||||
Amortization of acquisition-related intangible assets |
1 | 5 | 6 | 3 | 14 | – | 23 | 17 | ||||||||||||||||||||||||
Impact of divestitures |
– | – | – | – | – | 55 | 55 | (45 | ) | |||||||||||||||||||||||
Management of fair value changes on the purchase of Bank of the West |
– | – | – | – | – | (5,667 | ) | (5,667 | ) | (4,312 | ) | |||||||||||||||||||||
Legal provision (including related interest expense and legal fees) |
– | – | – | – | – | 846 | 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. |
30 |
BMO Financial Group 206th Annual Report 2023 |
(Canadian $ in millions, except as noted) For the year ended October 31 |
2023 |
2022 | 2021 | |||||||||
Reported |
||||||||||||
Net interest income |
18,681 |
15,885 | 14,310 | |||||||||
Non-interest revenue |
12,518 |
17,825 | 12,876 | |||||||||
Revenue |
31,199 |
33,710 | 27,186 | |||||||||
Insurance claims, commissions and changes in policy benefit liabilities (CCPB) |
1,939 |
(683 | ) | 1,399 | ||||||||
Revenue, net of CCPB |
29,260 |
34,393 | 25,787 | |||||||||
Non-interest expense |
21,219 |
16,194 | 15,509 | |||||||||
Efficiency ratio (%) |
68.0 |
48.0 | 57.0 | |||||||||
Efficiency ratio, net of CCPB (%) |
72.5 |
47.1 | 60.1 | |||||||||
Revenue growth (%) |
(7.5 |
) |
24.0 | 7.9 | ||||||||
Revenue growth, net of CCPB (%) |
(14.9 |
) |
33.4 | 9.8 | ||||||||
Non-interest expense growth (%) |
31.0 |
4.4 | 9.4 | |||||||||
Operating leverage (%) |
(38.5 |
) |
19.6 | (1.5 | ) | |||||||
Operating leverage, net of CCPB (%) |
(45.9 |
) |
29.0 | 0.4 | ||||||||
Adjusted (1) |
||||||||||||
Net interest income |
19,094 |
16,352 | 14,310 | |||||||||
Non-interest revenue |
14,284 |
10,181 | 12,847 | |||||||||
Revenue |
33,378 |
26,533 | 27,157 | |||||||||
Insurance claims, commissions and changes in policy benefit liabilities (CCPB) |
1,939 |
(683 | ) | 1,399 | ||||||||
Revenue, net of CCPB |
31,439 |
27,216 | 25,758 | |||||||||
Non-interest expense |
18,798 |
15,194 | 14,550 | |||||||||
Efficiency ratio (%) |
56.3 |
57.3 | 53.6 | |||||||||
Efficiency ratio, net of CCPB (%) |
59.8 |
55.8 | 56.5 | |||||||||
Revenue growth, net of CCPB (%) |
15.5 |
5.7 | 9.7 | |||||||||
Non-interest expense growth (%) |
23.7 |
4.4 | 3.6 | |||||||||
Operating leverage, net of CCPB (%) |
(8.2 |
) |
1.3 | 6.1 |
(1) | Refer to footnotes (1) to (8) in the Non-GAAP and Other Financial Measures table for further information on adjusting items. |
(Canadian $ in millions, except as noted) For the year ended October 31 |
2023 |
2022 | 2021 | |||||||||
Reported net income |
4,377 |
13,537 | 7,754 | |||||||||
Net income attributable to non-controlling interest in subsidiaries |
12 |
– | – | |||||||||
Net income attributable to bank shareholders |
4,365 |
13,537 | 7,754 | |||||||||
Dividends on preferred shares and distributions on other equity instruments |
(331 |
) |
(231 | ) | (244 | ) | ||||||
Net income available to common shareholders (A) |
4,034 |
13,306 | 7,510 | |||||||||
After-tax amortization of acquisition-related intangible assets |
264 |
23 | 66 | |||||||||
Net income available to common shareholders after adjusting for amortization of acquisition-related intangible assets (B) |
4,298 |
13,329 | 7,576 | |||||||||
After-tax impact of other adjusting items (1) |
4,034 |
(4,521 | ) | 831 | ||||||||
Adjusted net income available to common shareholders (C) |
8,332 |
8,808 | 8,407 | |||||||||
Average common shareholders’ equity (D) |
67,486 |
58,078 | 50,451 | |||||||||
Goodwill |
(13,466 |
) |
(5,051 | ) | (5,836 | ) | ||||||
Acquisition-related intangible assets |
(2,197 |
) |
(130 | ) | (381 | ) | ||||||
Net of related deferred liabilities |
856 |
251 | 271 | |||||||||
Average tangible common equity (E) |
52,679 |
53,148 | 44,505 | |||||||||
Return on equity (%) (= A/D) |
6.0 |
22.9 | 14.9 | |||||||||
Adjusted return on equity (%) (= C/D) |
12.3 |
15.2 | 16.7 | |||||||||
Return on tangible common equity (%) (= B/E) |
8.2 |
25.1 | 17.0 | |||||||||
Adjusted return on tangible common equity (%) (= C/E) |
15.8 |
16.6 | 18.9 |
(1) | Refer to footnotes (1) to (8) in the Non-GAAP and Other Financial Measures table for further information on adjusting items. |
BMO Financial Group 206th Annual Report 2023 | 31 |
2023 |
||||||||||||||||||||||||||||||||
(Canadian $ in millions, except as noted) | Canadian P&C |
U.S. P&C |
Total P&C |
BMO Wealth Management |
BMO Capital Markets |
Corporate Services |
Total Bank |
U.S. Segment (US$ in millions) |
||||||||||||||||||||||||
Reported |
||||||||||||||||||||||||||||||||
Net income available to common shareholders |
3,677 |
2,672 |
6,349 |
1,118 |
1,648 |
(5,081 |
) |
4,034 |
56 |
|||||||||||||||||||||||
Total average common equity |
13,672 |
27,889 |
41,561 |
6,356 |
11,856 |
7,713 |
67,486 |
27,203 |
||||||||||||||||||||||||
Return on equity (%) |
26.9 |
9.6 |
15.3 |
17.6 |
13.9 |
na |
6.0 |
0.2 |
||||||||||||||||||||||||
Adjusted |
||||||||||||||||||||||||||||||||
Net income available to common shareholders |
3,692 |
2,906 |
6,598 |
1,122 |
1,672 |
(1,060 |
) |
8,332 |
2,853 |
|||||||||||||||||||||||
Total average common equity |
13,672 |
27,889 |
41,561 |
6,356 |
11,856 |
7,713 |
67,486 |
27,203 |
||||||||||||||||||||||||
Return on equity (%) |
27.0 |
10.4 |
15.9 |
17.7 |
14.1 |
na |
12.3 |
10.5 |
||||||||||||||||||||||||
2022 | ||||||||||||||||||||||||||||||||
(Canadian $ in millions, except as noted) | Canadian P&C | U.S. P&C | Total P&C | BMO Wealth Management |
BMO Capital Markets |
Corporate Services |
Total Bank | U.S. Segment (2) (US$ in millions) |
||||||||||||||||||||||||
Reported |
||||||||||||||||||||||||||||||||
Net income available to common shareholders |
3,783 | 2,461 | 6,244 | 1,243 | 1,732 | 4,087 | 13,306 | 6,052 | ||||||||||||||||||||||||
Total average common equity |
11,798 | 13,815 | 25,613 | 5,282 | 11,556 | 15,627 | 58,078 | 17,081 | ||||||||||||||||||||||||
Return on equity (%) |
32.1 | 17.8 | 24.4 | 23.5 | 15.0 | na | 22.9 | 35.4 | ||||||||||||||||||||||||
Adjusted (3) |
||||||||||||||||||||||||||||||||
Net income available to common shareholders |
3,784 | 2,466 | 6,250 | 1,246 | 1,754 | (442 | ) | 8,808 | 2,518 | |||||||||||||||||||||||
Total average common equity |
11,798 | 13,815 | 25,613 | 5,282 | 11,556 | 15,627 | 58,078 | 17,081 | ||||||||||||||||||||||||
Return on equity (%) |
32.1 | 17.8 | 24.4 | 23.6 | 15.2 | na | 15.2 | 14.7 |
(1) | Return on equity is based on allocated capital. In fiscal 2023, following the closing of the Bank of the West acquisition, capital was allocated from Corporate Services to U.S. P&C and BMO Wealth Management. For further information, refer to the How BMO Reports Operating Group Results section. |
(2) | U.S. segment reported and adjusted results comprise net income and allocated capital recorded in U.S. P&C and our U.S. operations in BMO Wealth Management, BMO Capital Markets and Corporate Services. |
(3) | Refer to footnotes (1) to (8) in the Non-GAAP and Other Financial Measures table for further information on adjusting items. |
32 |
BMO Financial Group 206th Annual Report 2023 |
(1) | All time periods in this section refer to the calendar year rather than BMO’s fiscal year. |
BMO Financial Group 206th Annual Report 2023 | 33 |
(Canadian $ in millions, except as noted) | 2023 vs. 2022 |
|||
Canadian/U.S. dollar exchange rate (average) |
||||
2023 |
1.3492 |
|||
2022 |
1.2918 |
|||
Effects on U.S. segment reported results |
||||
Increased (Decreased) net interest income |
273 |
|||
Increased (Decreased) non-interest revenue |
476 |
|||
Increased (Decreased) total revenue |
749 |
|||
Decreased (Increased) provision for credit losses |
1 |
|||
Decreased (Increased) non-interest expense |
(285 |
) | ||
Decreased (Increased) provision for income taxes |
(117 |
) | ||
Increased (Decreased) net income |
348 |
|||
Impact on earnings per share ($) |
0.52 |
|||
Effects on U.S. segment adjusted results |
||||
Increased (Decreased) net interest income |
292 |
|||
Increased (Decreased) non-interest revenue |
142 |
|||
Increased (Decreased) total revenue |
434 |
|||
Decreased (Increased) provision for credit losses |
1 |
|||
Decreased (Increased) non-interest expense |
(246 |
) | ||
Decreased (Increased) provision for income taxes |
(43 |
) | ||
Increased (Decreased) net income |
146 |
|||
Impact on earnings per share ($) |
0.22 |
34 |
BMO Financial Group 206th Annual Report 2023 |
• |
Acquisition and integration costs of $1,533 million ($2,045 million pre-tax) in the current year and $245 million ($326 million pre-tax) in the prior year, recorded in non-interest expense. The current year included acquisition and integration costs of $1,520 million ($2,027 million pre-tax) related to Bank of the West. |
• |
A loss of $1,461 million ($2,011 million pre-tax) in the current 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, comprising $1,628 million of mark-to-market 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. The prior year included revenue of $5,667 million ($7,713 million pre-tax), comprising $7,665 million of non-interest trading revenue and $48 million of net interest income. |
• |
Initial provision for credit losses of $517 million ($705 million pre-tax) in the current year on the purchased Bank of the West performing loan portfolio. |
• |
Amortization of acquisition-related intangible assets of $264 million ($357 million pre-tax) in the current year and $23 million ($31 million pre-tax) in the prior year, recorded in non-interest expense. The current year included amortization of acquisition-related intangible assets of $231 million ($311 million pre-tax) related to Bank of the West. |
• |
The impact of certain tax measures enacted by the Canadian government in the current year, including 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 a 1.5% tax rate increase, net of a deferred tax asset remeasurement, and 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. |
• |
The impact of a lawsuit associated with a predecessor bank, M&I Marshall and Ilsley Bank, of $21 million ($27 million pre-tax) in the current year, comprising interest expense of $30 million and a net non-interest expense recovery of $3 million. The prior year included $846 million ($1,142 million pre-tax), comprising interest expense of $515 million and non-interest expense of $627 million. |
• |
The impact of divestitures of $55 million ($37 million pre-tax) in the prior year related to the sale of our EMEA business and the transfer of certain U.S. asset management clients, comprising a net loss of $21 million recorded in non-interest revenue and expenses of $16 million, including taxes of $22 million on closing of the sale. |
BMO Financial Group 206th Annual Report 2023 | 35 |
(Canadian $ in millions, on a pre-tax basis)For the year ended October 31 |
2023 |
2022 | ||||||
Net interest income |
18,681 |
15,885 | ||||||
Non-interest revenue |
12,518 |
17,825 | ||||||
Total revenue |
31,199 |
33,710 | ||||||
Insurance claims, commissions and changes in policy benefit liabilities (CCPB) (1) |
1,939 |
(683 | ) | |||||
Revenue, net of CCPB (1) |
29,260 |
34,393 | ||||||
Impact of divestitures (2) |
– |
21 | ||||||
Management of fair value changes on the purchase of Bank of the West (3) |
2,011 |
(7,713 | ) | |||||
Legal provision (including related interest expense and legal fees) (4) |
30 |
515 | ||||||
Impact of Canadian tax measures (5) |
138 |
– | ||||||
Impact of adjusting items on revenue |
2,179 |
(7,177 | ) | |||||
Adjusted revenue (2) (3) (4) |
33,378 |
26,533 | ||||||
Adjusted revenue, net of CCPB (1) (2) (3) (4) |
31,439 |
27,216 |
(1) | 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 of revenue on a basis net of CCPB, reduces variability in results, which allows for a better assessment of operating results. For further information, refer to the Insurance Claims, Commissions and Changes in Policy Benefits section. |
(2) | Fiscal 2022 reported revenue included non-interest revenue related to the sale of our EMEA and U.S. Asset Management businesses, comprising a gain of $8 million related to the transfer of certain U.S. asset management clients and a $29 million loss related to foreign currency translation reclassified from accumulated other comprehensive income to non-interest revenue, recorded in Corporate Services. |
(3) | Reported revenue 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. Fiscal 2023 included a loss of $2,011 million, comprising $1,628 million of mark-to-market mark-to-market non-trading interest income. These amounts were recorded in Corporate Services. For further information on this acquisition, refer to the Recent Acquisitions section. |
(4) | Reported revenue included the impact of a lawsuit associated with a predecessor bank, M&I Marshall and Ilsley Bank. Interest expense of $30 million was recorded in fiscal 2023 and $515 million was recorded in fiscal 2022. 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. |
(5) | Fiscal 2023 reported revenue included the impact of certain tax measures enacted by the Canadian government. These tax measures included a charge of $138 million related to the amended GST/HST definition for financial services, recorded in non-interest revenue in Corporate Services. |
36 |
BMO Financial Group 206th Annual Report 2023 |
Net interest margin |
||||||||||||||||||||||||||||||||
(Canadian $ in millions, except as noted) For the year ended October 31 |
Net interest income |
Average earning assets |
(in basis points) | |||||||||||||||||||||||||||||
2023 |
2022 | 2023 |
2022 | 2023 |
2022 | |||||||||||||||||||||||||||
Canadian P&C |
8,308 |
7,449 | 303,855 |
278,022 | 273 |
268 | ||||||||||||||||||||||||||
U.S. P&C |
7,853 |
5,037 | 202,155 |
138,094 | 388 |
364 | ||||||||||||||||||||||||||
Personal and Commercial Banking (P&C) |
16,161 |
12,486 | 506,010 |
416,116 | 319 |
300 | ||||||||||||||||||||||||||
All other operating groups and Corporate Services (4) |
2,520 |
3,399 | 639,622 |
563,225 | na |
na | ||||||||||||||||||||||||||
Total reported |
18,681 |
15,885 | 1,145,632 |
979,341 | 163 |
162 | ||||||||||||||||||||||||||
Total adjusted |
19,094 |
16,352 | 1,145,632 |
979,341 | 167 |
167 | ||||||||||||||||||||||||||
Trading-related net interest income and earning assets |
900 |
1,672 | 168,686 |
153,875 | na |
na | ||||||||||||||||||||||||||
Total excluding trading net interest income and earning assets |
17,781 |
14,213 | 976,946 |
825,466 | 182 |
172 | ||||||||||||||||||||||||||
Total adjusted excluding trading net interest income and earning assets |
18,194 |
14,680 | 976,946 |
825,466 | 186 |
178 | ||||||||||||||||||||||||||
U.S. P&C (US$ in millions) |
5,818 |
3,893 | 149,767 |
106,829 | 388 |
364 |
(1) | Adjusted results and ratios are on a non-GAAP basis and are discussed in the Non-GAAP and Other Financial Measures section. |
(2) | Operating group revenue is presented on a taxable equivalent basis (teb) in net interest income. For further information, refer to the How BMO Reports Operating Group Results section. |
(3) | Average earning assets represents the daily average balance of deposits with central banks, deposits with other banks, securities borrowed or purchased under resale agreements, securities, and loans, over a one-year period. |
(4) | For further information on net interest income for these other operating groups and Corporate Services, refer to the 2023 Operating Groups Performance Review section. |
(Canadian $ in millions) For the year ended October 31 |
2023 |
2022 | ||||||
Securities commissions and fees |
1,025 |
1,082 | ||||||
Deposit and payment service charges |
1,517 |
1,318 | ||||||
Trading revenue |
(216 |
) |
8,250 | |||||
Lending fees |
1,548 |
1,440 | ||||||
Card fees |
700 |
548 | ||||||
Investment management and custodial fees |
1,851 |
1,770 | ||||||
Mutual fund revenue |
1,244 |
1,312 | ||||||
Underwriting and advisory fees |
1,107 |
1,193 | ||||||
Securities gains, other than trading |
181 |
281 | ||||||
Foreign exchange, other than trading |
235 |
181 | ||||||
Insurance revenue (loss) |
2,498 |
(157 | ) | |||||
Share of profit in associates and joint ventures |
185 |
274 | ||||||
Other |
643 |
333 | ||||||
Total reported |
12,518 |
17,825 | ||||||
Insurance claims, commissions and changes in policy benefit liabilities (CCPB) |
1,939 |
(683 | ) | |||||
Reported non-interest revenue, net of CCPB |
10,579 |
18,508 | ||||||
Management of fair value changes on the purchase of Bank of the West (1) |
1,628 |
(7,665 | ) | |||||
Impact of divestitures (2) |
– |
21 | ||||||
Impact of Canadian tax measures (3) |
138 |
– | ||||||
Adjusted non-interest revenue |
14,284 |
10,181 | ||||||
Adjusted non-interest revenue, net of CCPB |
12,345 |
10,864 | ||||||
Insurance revenue, net of CCPB |
559 |
526 |
(1) | Fiscal 2023 reported non-interest revenue included $1,628 million of mark-to-market mark-to-market |
(2) | Fiscal 2022 reported non-interest revenue included the impact of divestitures related to the sale of our EMEA and U.S. Asset Management businesses of $21 million of non-interest losses, comprising a gain of $8 million related to the transfer of certain U.S. asset management clients and a $29 million loss related to foreign currency translation reclassified from accumulated other comprehensive income to non-interest revenue, recorded in Corporate Services. |
(3) | Fiscal 2023 reported non-interest revenue included the impact of certain tax measures enacted by the Canadian government. These tax measures included a charge of $138 million related to the amended GST/HST definition for financial services, recorded in non-interest revenue in Corporate Services. |
BMO Financial Group 206th Annual Report 2023 | 37 |
(Canadian $ in millions) (taxable equivalent basis) For the year ended October 31 |
2023 |
2022 | ||||||
Interest rates |
770 |
893 | ||||||
Foreign exchange |
638 |
571 | ||||||
Equities |
931 |
950 | ||||||
Commodities |
192 |
189 | ||||||
Other |
(1,526 |
) |
7,556 | |||||
Total (teb) (2) |
1,005 |
10,159 | ||||||
Teb offset |
321 |
237 | ||||||
Reported total |
684 |
9,922 | ||||||
Management of fair value changes on the purchase of Bank of the West (3) |
1,628 |
(7,665 | ) | |||||
Adjusted total trading revenue |
2,312 |
2,257 | ||||||
Reported as: |
||||||||
Net interest income |
1,221 |
1,909 | ||||||
Non-interest revenue – trading revenue |
(216 |
) |
8,250 | |||||
Total (teb) |
1,005 |
10,159 | ||||||
Teb offset |
321 |
237 | ||||||
Reported total, net of teb offset |
684 |
9,922 | ||||||
Adjusted total trading revenue |
2,312 |
2,257 |
(1) | Reported and adjusted revenue measures are on a non-GAAP basis and are discussed in the Non-GAAP and Other Financial Measures section. |
(2) | Trading-related revenue presented on a taxable equivalent basis (teb) is a non-GAAP measure. Similar to other banks, BMO analyzes trading-related revenue on a taxable equivalent basis (teb), which reflects an increase in net interest income on tax-exempt securities to equivalent pre-tax amounts and is useful in facilitating comparisons of income from taxable and tax-exempt sources. |
(3) | Fiscal 2023 trading-related revenue included $1,628 million of mark-to-market mark-to-market |
38 |
BMO Financial Group 206th Annual Report 2023 |
(Canadian $ in millions) | Canadian P&C |
U.S. P&C |
Total P&C |
BMO Wealth Management |
BMO Capital Markets |
Corporate Services |
Total Bank |
|||||||||||||||||||||
2023 |
||||||||||||||||||||||||||||
Provision for credit losses on impaired loans |
784 |
380 |
1,164 |
5 |
9 |
2 |
1,180 |
|||||||||||||||||||||
Provision for credit losses on performing loans |
146 |
130 |
276 |
13 |
9 |
700 |
998 |
|||||||||||||||||||||
Total provision for credit losses |
930 |
510 |
1,440 |
18 |
18 |
702 |
2,178 |
|||||||||||||||||||||
Initial provision for credit losses on purchased performing loans (1) |
– |
– |
– |
– |
– |
(705 |
) |
(705 |
) | |||||||||||||||||||
Adjusted total provision for (recovery of) credit losses (2) |
930 |
510 |
1,440 |
18 |
18 |
(3 |
) |
1,473 |
||||||||||||||||||||
Total PCL-to-average (%) (3) |
0.30 |
0.26 |
0.28 |
0.04 |
0.02 |
nm |
0.35 |
|||||||||||||||||||||
PCL on impaired loans-to-average (%) (3) |
0.25 |
0.20 |
0.23 |
0.01 |
0.01 |
nm |
0.19 |
|||||||||||||||||||||
2022 |
||||||||||||||||||||||||||||
Provision for (recovery of) credit losses on impaired loans |
432 | 107 | 539 | 2 | (32 | ) | (7 | ) | 502 | |||||||||||||||||||
Provision for (recovery of) credit losses on performing loans |
(91 | ) | (90 | ) | (181 | ) | (4 | ) | (11 | ) | 7 | (189 | ) | |||||||||||||||
Total provision for (recovery of) credit losses |
341 | 17 | 358 | (2 | ) | (43 | ) | – | 313 | |||||||||||||||||||
Total PCL-to-average (%) (3) |
0.12 | 0.01 | 0.09 | (0.01 | ) | (0.07 | ) | nm | 0.06 | |||||||||||||||||||
PCL on impaired loans-to-average (%) (3) |
0.15 | 0.08 | 0.13 | – | (0.05 | ) | nm | 0.10 |
(1) | Fiscal 2023 comprised an initial provision for credit losses of $705 million on the purchased Bank of the West performing loan portfolio, recorded in Corporate Services. |
(2) | 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. For further information, refer to the Non-GAAP and Other Financial Measures section, and 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. |
(3) | Ratios are presented on an annualized basis. |
BMO Financial Group 206th Annual Report 2023 | 39 |
(Canadian $ in millions, on a pre-tax basis)For the year ended October 31 |
2023 |
2022 | ||||||
Employee compensation |
||||||||
Salaries |
6,602 |
4,467 | ||||||
Performance-based compensation |
3,565 |
3,193 | ||||||
Employee benefits |
1,348 |
1,135 | ||||||
Total employee compensation |
11,515 |
8,795 | ||||||
Total premises and equipment |
4,879 |
3,635 | ||||||
Amortization of intangible assets |
1,015 |
604 | ||||||
Other expenses |
||||||||
Advertising and business development |
814 |
517 | ||||||
Communications |
368 |
278 | ||||||
Professional fees |
1,147 |
788 | ||||||
Other |
1,481 |
1,577 | ||||||
Total other expenses |
3,810 |
3,160 | ||||||
Total non-interest expense |
21,219 |
16,194 | ||||||
Acquisition and integration costs (2) |
(2,045 |
) |
(326 | ) | ||||
Amortization of acquisition-related intangible assets (3) |
(357 |
) |
(31 | ) | ||||
Impact of divestitures (4) |
– |
(16 | ) | |||||
Legal provision (including related interest expense and legal fees) (5) |
3 |
(627 | ) | |||||
Impact of Canadian tax measures (6) |
(22 |
) |
– | |||||
Impact of adjusting items on non-interest expense |
(2,421 |
) |
(1,000 | ) | ||||
Total adjusted non-interest expense |
18,798 |
15,194 | ||||||
Efficiency ratio (%) |
68.0 |
48.0 | ||||||
Efficiency ratio, net of CCPB (%) (1) |
72.5 |
47.1 | ||||||
Adjusted efficiency ratio (%) |
56.3 |
57.3 | ||||||
Adjusted efficiency ratio, net of CCPB (%) (1) |
59.8 |
55.8 |
(1) | Reported and adjusted results, measures and ratios, net of CCPB, are on a non-GAAP basis. For a quantitative reconciliation of revenue, net of CCPB, and adjusted results, refer to the Revenue section and the Non-GAAP and Other Financial Measures section. |
(2) | Reported non-interest expense included acquisition and integration costs of $2,027 million in fiscal 2023 and $316 million in fiscal 2022 related to the acquisition of Bank of the West, recorded in Corporate Services. In addition, reported non-interest expense included acquisition and integration costs of $5 million related to Radicle and Clearpool in fiscal 2023 and $10 million related to KGS-Alpha and Clearpool in fiscal 2022, recorded in BMO Capital Markets. Fiscal 2023 included acquisition and integration costs of $13 million related to the acquisition of AIR MILES, recorded in Canadian P&C. |
(3) | Reported non-interest expense included amortization of acquisition-related intangible assets of $357 million in fiscal 2023 and $31 million in fiscal 2022, recorded in the related operating group. |
(4) | Fiscal 2022 reported non-interest expense included the impact of divestitures of $32 million, including taxes of $22 million, related to the sale of our EMEA and U.S. Asset Management businesses, recorded in Corporate Services. |
(5) | Reported non-interest expense included the impact of a lawsuit associated with a predecessor bank, M&I Marshall and Ilsley Bank. Fiscal 2023 included a net non-interest expense recovery of $3 million and fiscal 2022 included a provision 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. |
(6) | Fiscal 2023 reported non-interest expense included the impact of certain tax measures enacted by the Canadian government, comprising $22 million related to the amended GST/HST definition for financial services, recorded in Corporate Services. |
40 |
BMO Financial Group 206th Annual Report 2023 |
(Canadian $ in millions, except as noted) For the year ended October 31 |
2023 |
2022 | ||||||
Payroll levies |
517 |
398 | ||||||
Property taxes |
40 |
34 | ||||||
Provincial capital taxes |
50 |
45 | ||||||
Business taxes |
24 |
11 | ||||||
Harmonized sales tax, GST, VAT and other sales taxes |
563 |
459 | ||||||
Sundry taxes |
1 |
1 | ||||||
Total government levies other than income taxes (other taxes) (1) |
1,195 |
948 | ||||||
Provision for income taxes |
1,486 |
4,349 | ||||||
Provision for income taxes and other taxes |
2,681 |
5,297 | ||||||
Provision for income taxes and other taxes as a % of income before provision for income taxes and other taxes |
38.0 |
28.1 | ||||||
Effective income tax rate (%) |
25.3 |
24.3 | ||||||
Adjusted effective income tax rate (%) |
22.3 |
22.8 |
(1) | Other taxes are included in various non-interest expense categories. |
BMO Financial Group 206th Annual Report 2023 | 41 |
42 |
BMO Financial Group 206th Annual Report 2023 |
(Canadian $ in millions, except as noted) As at or for the year ended October 31 |
Canadian P&C |
U.S. P&C |
Total P&C |
|||||||||||||||||||||||||||||
2023 |
2022 | 2023 |
2022 | 2023 |
2022 | |||||||||||||||||||||||||||
Net interest income (teb) (2) |
8,308 |
7,449 | 7,853 |
5,037 | 16,161 |
12,486 | ||||||||||||||||||||||||||
Non-interest revenue |
2,519 |
2,419 | 1,573 |
1,265 | 4,092 |
3,684 | ||||||||||||||||||||||||||
Total revenue (teb) (2) |
10,827 |
9,868 | 9,426 |
6,302 | 20,253 |
16,170 | ||||||||||||||||||||||||||
Provision for credit losses on impaired loans |
784 |
432 | 380 |
107 | 1,164 |
539 | ||||||||||||||||||||||||||
Provision for (recovery of) credit losses on performing loans |
146 |
(91 | ) | 130 |
(90 | ) | 276 |
(181 | ) | |||||||||||||||||||||||
Total provision for (recovery of) credit losses |
930 |
341 | 510 |
17 | 1,440 |
358 | ||||||||||||||||||||||||||
Non-interest expense |
4,770 |
4,349 | 5,502 |
3,043 | 10,272 |
7,392 | ||||||||||||||||||||||||||
Income before income taxes |
5,127 |
5,178 | 3,414 |
3,242 | 8,541 |
8,420 | ||||||||||||||||||||||||||
Provision for income taxes (teb) (2) |
1,409 |
1,352 | 690 |
745 | 2,099 |
2,097 | ||||||||||||||||||||||||||
Reported net income |
3,718 |
3,826 | 2,724 |
2,497 | 6,442 |
6,323 | ||||||||||||||||||||||||||
Acquisition and integration costs (3) |
9 |
– | – |
– | 9 |
– | ||||||||||||||||||||||||||
Amortization of acquisition-related intangible assets (4) |
6 |
1 | 234 |
5 | 240 |
6 | ||||||||||||||||||||||||||
Adjusted net income |
3,733 |
3,827 | 2,958 |
2,502 | 6,691 |
6,329 | ||||||||||||||||||||||||||
Net income available to common shareholders |
3,677 |
3,783 | 2,672 |
2,461 | 6,349 |
6,244 | ||||||||||||||||||||||||||
Adjusted net income available to common shareholders |
3,692 |
3,784 | 2,906 |
2,466 | 6,598 |
6,250 |
(1) | Adjusted results are on a non-GAAP basis and are discussed in the Non-GAAP and Other Financial Measures section. |
(2) | Taxable equivalent basis (teb) amounts of $33 million in fiscal 2023 and $25 million in fiscal 2022 were recorded in net interest income, revenue and provision for income taxes. |
(3) | Acquisition and integration costs of $13 million pre-tax related to the acquisition of AIR MILES in fiscal 2023 were recorded in non-interest expense. |
(4) | Amortization of acquisition-related intangible assets pre-tax amounts of $323 million in fiscal 2023 and $7 million in fiscal 2022 were recorded in non-interest expense. |
BMO Financial Group 206th Annual Report 2023 | 43 |
• |
Maintained strong customer loyalty in both Personal and Business Banking and Commercial Banking, as measured by Net Promoter Score (1) |
• |
Ranked first by J.D. Power (2) for Personal Banking Customer Satisfaction among the Big 5 Banks in its 2023 Canada Retail Banking Satisfaction Study, as well as for Customer Satisfaction with Online Banking in its 2023 Canada Online Banking Satisfaction Study, with the highest scores among Canada’s largest banks, demonstrating our dedication to support our customers’ financial goals and achievements, as well as our focus on convenience and digital innovation across all customer channels |
• |
Named Best Commercial Bank in Canada for the ninth consecutive year and Best Retail Bank in Canada for the second consecutive year by World Finance best-in-class |
• |
Continued to grow our customer-facing, advice-based roles, strengthening our ability to engage with customers on the financial issues that are important to them |
• |
Drive strong customer loyalty, leveraging our enhanced capabilities across customer channels |
• |
Leverage our One Client strategy to provide a connected and integrated experience to our clients, with a holistic approach to address their needs across our businesses |
• |
Continued to expand our digital sales and service capabilities, with more than a third of our core banking products purchased and delivered digitally, while more than 90% of service transactions were completed through self-serve channels, allowing our front-line employees to focus on delivering leading advisory services |
• |
Improved market share in key categories, including deposits, mortgages and credit cards, supported by strong year-over-year customer acquisition |
• |
Completed our acquisition of the AIR MILES Reward Program, one of Canada’s most recognized loyalty programs, with more than 10 million active collector accounts. Added new partnerships and introduced robust new features, including an updated travel booking platform, an AIR MILES mobile app and new ways to earn Miles |
• |
Helped customers grow their savings through our BMO Savings Goals feature and the BMO Savings Amplifier Account, as well as offering access to BMO’s SmartProgress online financial literacy program |
• |
Enhanced our offerings to support new Canadians, including the expansion of our industry-leading BMO NewStart ® Pre-Arrival Account Opening program, and continued to develop and build strategic relationships with Immigration.ca and Immigrant Services Calgary to provide specialized guidance and resources aimed at helping newcomers transition to their new lives in Canada |
• |
Launched the Greener Future Financing program for small and medium-sized agriculture businesses, committing $30 million to a climate-related financing product that supports investments in sustainable business practices and climate resilience measures |
• |
Introduced BMO for Indigenous Entrepreneurs |
(1) | Net Promoter Score (NPS): The percentage of customers surveyed who would recommend BMO to a friend or colleague. |
(2) | For more information, refer to www.jdpower.com/business. |
44 |
BMO Financial Group 206th Annual Report 2023 |
• |
Drive customer acquisition through our differentiated value proposition, enabled by analytics and digital marketing capabilities |
• |
Deliver differentiated products and services that meet customers’ needs and help them make real financial progress |
• |
Accelerate growth of our AIR MILES Reward Program by strengthening the program’s offering for collectors and program partners |
• |
Maintained a leadership position in lending in the Atlantic and British Columbia regions and reinforced our second-place ranking in national lending market share, as well as peer-leading deposit growth |
• |
Introduced a new retrofits product, the first of its kind in Canada, which is anchored by our strategic relationships with energy services companies and the Canada Infrastructure Bank and bundled with conventional construction financing |
• |
Launched BMO Marketplace, a one-stop shop for third-party partnerships, where our clients across North America can connect their accounts to create a more efficient and customized banking experience |
• |
Launched mobile wallet functionality for physical and virtual cards, as well as contactless payments through Mastercard Extend, enabling our Corporate Card clients in Canada and the United States to manage their businesses more conveniently |
• |
Maintain focus on key sectors and geographies |
• |
Deepen relationships through simplification and digital innovation to drive deposit growth |
• |
Continue to develop climate and carbon transition solutions for our clients |
• |
Introduced new digital solutions to address our customers’ needs, including digital mortgage pre-qualification and recurring lump-sum mortgage payment features, as well as the PaySmartTM credit card instalment plan, which simplifies card transactions and helps customers build a credit history |
• |
Continued to modernize our digital payments functionality and improve our customers’ experiences and our operational efficiency, including platform upgrades, enhanced fraud detection capabilities and increased transaction limits, and optimized the BMO.com interface with the introduction of an advanced decision management tool that adapts quickly to changing market demands and regulations |
• |
Received two 2023 Celent Model Bank Awards, the Retail Digital Banking Transformation Award and the Customer Financial Resilience Award, for our leadership in digital transformation and our commitment to enhancing the customer experience |
• |
Recognized for innovation at the 2023 Cannes Lion festival, winning Gold for BMO NXT LVL, a first of its kind gaming platform on Twitch that educates and informs gamers about personal finance |
• |
Ranked first in the Account Management, Digital Money Management and Alerts categories in the 2023 Insider Intelligence Canadian Mobile Banking Emerging Features Benchmark |
• |
Named Overall Leader in the 2023 Javelin Canadian Mobile Banking Scorecard in the Financial Fitness, Money Movement and Account Opening categories |
• |
Recognized for artificial intelligence (AI) and advanced analytics by Datos Insights, with the 2023 Impact Innovation Award in Cash Management and Payments |
• |
Continued to deliver automated open-banking solutions for business clients through partnerships with Xero and FISPAN, enabling owners to spend more time growing their business |
• |
Continue to simplify and digitize processes to enhance efficiency |
• |
Continue to strengthen digital capabilities, leveraging existing and new partnerships and delivering leading digital experiences to our customers |
• |
Improved on strong employee engagement index scores – on par with the global benchmark for leading companies – with ongoing improvements in all priority areas of our winning culture |
• |
Opened BMO Place in Toronto, a new workspace designed to support accessibility, sustainability, inclusion and collaboration – in alignment with our Purpose and our Zero Barriers to Inclusion strategy |
• |
Launched a Personal and Business Banking rotation program, demonstrating our commitment to attracting and developing diverse talent by providing access to meaningful career experiences and development opportunities |
• |
Recognized by the Office québécois de la langue française with a Mérites du français award for promoting the use of the French language in the workplace and preserving French culture within BMO |
• |
Continue to attract and develop a diverse workforce while promoting an inclusive workplace |
• |
Maintain a world-class, winning culture and continue to drive strong employee engagement |
BMO Financial Group 206th Annual Report 2023 | 45 |
(Canadian $ in millions, except as noted) As at or for the year ended October 31 |
2023 |
2022 | ||||||
Net interest income |
8,308 |
7,449 | ||||||
Non-interest revenue |
2,519 |
2,419 | ||||||
Total revenue |
10,827 |
9,868 | ||||||
Provision for credit losses on impaired loans |
784 |
432 | ||||||
Provision for (recovery of) credit losses on performing loans |
146 |
(91 | ) | |||||
Total provision for credit losses |
930 |
341 | ||||||
Non-interest expense |
4,770 |
4,349 | ||||||
Income before income taxes |
5,127 |
5,178 | ||||||
Provision for income taxes |
1,409 |
1,352 | ||||||
Reported net income |
3,718 |
3,826 | ||||||
Acquisition and integration costs (2) |
9 |
– | ||||||
Amortization of acquisition-related intangible assets (3) |
6 |
1 | ||||||
Adjusted net income |
3,733 |
3,827 | ||||||
Adjusted non-interest expense |
4,749 |
4,348 | ||||||
Net income available to common shareholders |
3,677 |
3,783 | ||||||
Adjusted net income available to common shareholders |
3,692 |
3,784 | ||||||
Key Performance Metrics |
||||||||
Personal and Business Banking revenue |
7,762 |
6,890 | ||||||
Commercial Banking revenue |
3,065 |
2,978 | ||||||
Return on equity (%) (4) |
26.9 |
32.1 | ||||||
Adjusted return on equity (%) (4) |
27.0 |
32.1 | ||||||
Operating leverage (%) |
– |
2.7 | ||||||
Adjusted operating leverage (%) |
0.4 |
2.7 | ||||||
Efficiency ratio (%) |
44.1 |
44.1 | ||||||
PCL on impaired loans to average net loans and acceptances (%) |
0.25 |
0.15 | ||||||
Net interest margin on average earning assets (%) |
2.73 |
2.68 | ||||||
Average earning assets |
303,855 |
278,022 | ||||||
Average gross loans and acceptances |
314,988 |
290,324 | ||||||
Average net loans and acceptances |
313,486 |
288,979 | ||||||
Average deposits |
272,575 |
243,541 | ||||||
Full-time equivalent employees |
16,217 |
15,471 |
(1) | Adjusted results and ratios are on a non-GAAP basis and are discussed in the Non-GAAP and Other Financial Measures section. |
(2) | Pre-tax acquisition and integration costs related to AIR MILES of $13 million in fiscal 2023 were recorded in non-interest expense. |
(3) | Amortization of acquisition-related intangible assets pre-tax amounts of $8 million in fiscal 2023 and $1 million in fiscal 2022 were recorded in non-interest expense. |
(4) | Return on equity is based on allocated capital. Effective fiscal 2023, the capital allocation rate increased to 11.0% of risk-weighted assets, compared with 10.5% in fiscal 2022. For further information, refer to the Non-GAAP and Other Financial Measures section. |
46 |
BMO Financial Group 206th Annual Report 2023 |
BMO Financial Group 206th Annual Report 2023 | 47 |
• |
Continued to strengthen customer loyalty in both Personal and Business Banking and Commercial Banking, as measured by Net Promoter Score (1) |
• |
Expanded our market presence in the U.S. West and Southwest regions with the acquisition of Bank of the West, while reinforcing our third-place market share position for deposits across our Midwest footprint |
• |
Named by World Finance |
• |
Rated Outstanding by the Office of the Comptroller of the Currency on Community Reinvestment Act |
• |
Drive strong customer loyalty, leveraging our enhanced capabilities across customer channels |
• |
Leverage our One Client strategy to provide a connected and integrated experience to our clients, with a holistic approach to address their needs across our businesses |
• |
Successfully transitioned nearly two million customers to BMO, along with their accounts, financial products and online banking relationships |
• |
Integrated our Bank of the West colleagues into BMO’s internal processes and systems, adapting our organizational structure to support our growth objectives |
• |
Rebranded and integrated branches, automated teller machines and digital banking platforms across the United States to BMO |
• |
Introduced a long-term commercial agreement with BNP Paribas (BNPP), to enhance coverage and global access for commercial banking clients of both institutions |
• |
Continued to build our digital sales and service capabilities, with our digital adoption rate increasing nearly 200 basis points year-over-year, approximately one third of our core banking products purchased and delivered digitally, and more than 80% of service transactions completed through self-serve channels, allowing our front-line employees to focus on delivering leading advisory services (2) |
• |
Enhanced our credit card product suite, introducing a new BMO Boost Secured Credit Card and rebranding the BMO Flex Rewards loyalty program, which led to higher levels of customer engagement |
• |
Engaged in personalized conversations through more than 400,000 Real Financial Progress TM checks, to help our customers identify their goals and make real financial progress |
• |
Launched BMO Alto TM , an online, high-yielding deposit account offering, successfully growing deposits nationally |
(1) | Net Promoter Score (NPS): The percentage of customers surveyed who would recommend BMO to a friend or colleague. |
(2) | Metrics exclude Bank of the West. |
48 |
BMO Financial Group 206th Annual Report 2023 |
• |
Maintained our commitment to underserved customer groups by reducing fees and improving access to products and services, including our enhanced Credit Builder TM Loan Program, supporting home ownership by offering down-payment relief through the Welcome Home GrantTM Program and opening more than 50,000 Bank OnTM certified Smart Money accounts since the launch of the product |
• |
Launched multiple programs to support members of many different communities, including Asian, veteran and 2SLGBTQI+ special purpose credit programs that are intended to improve access to capital for historically underserved segments, and hosted educational webinars to support Black, Latinx, Native American and women-owned businesses |
• |
Launched CreditView ® , enabling our customers to view and improve their credit score, and BMO Digital Banking Security Hub, helping our customers protect their accounts with added security features |
• |
Drive customer acquisition through our differentiated value proposition, enabled by digital and marketing capabilities, leveraging our expanded footprint and realizing synergies |
• |
Deliver differentiated products and services that meet customers’ needs and help them make real financial progress |
• |
Achieved Top 10 Commercial Bank market share for total wholesale loans, maintained our leading position in key markets (Illinois and Wisconsin) and continued to grow through the Bank of the West acquisition, establishing a market presence in 21 of the top 50 U.S. metropolitan areas |
• |
Completed a renewable natural gas/manure biodigester transaction, which has enabled an agriculture client to build a unique operating model that captures methane gas, reducing greenhouse gas emissions and generating renewable energy |
• |
Expanded V-PAYO, an integrated payables solution that offers existing and new clients automation, process efficiency and digitization – with one easy payment file |
• |
Partnered with Latino Leaders Magazine |
• |
Maintain focus on key sectors and geographies while leveraging our wider footprint to unlock synergies and cross-sell opportunities |
• |
Deepen relationships through simplification and digital innovation to drive deposit growth |
• |
Continue to develop solutions and capabilities to support our clients through their climate and carbon transition journey |
• |
Recognized by The Digital Banker |
• |
Invested in key digital capabilities to improve the customer experience, including digital card activation and automated increases in card limits, an enhanced account opening experience with e-sign capability in Business Banking, and a self-serve option for client onboarding in Commercial Banking |
• |
Introduced greater convenience for customers completing the end-to-end |
• |
Introduced digital chat capabilities in BMO Virtual Connect and addressed our customers’ sales and service needs by scaling the chat functionality of BMO Assist, powered by AI |
• |
Partnered with DailyPay to provide Commercial Banking client employees with real-time access to their pay by depositing funds into direct-deposit accounts for immediate access by employees |
• |
Continue to simplify and digitize processes to enhance efficiency |
• |
Continue to strengthen digital capabilities, leveraging existing and new partnerships and delivering leading digital experiences to our customers |
• |
Improved on strong employee engagement index scores – on par with the global benchmark for leading companies – with ongoing improvements in all priority areas of our winning culture |
• |
Named one of the Best Workplaces for Innovators by Fast Company, an annual list honouring organizations and teams that demonstrate a commitment to encourage and develop innovation, the only financial institution to be recognized among the top 30 companies |
• |
Recognized by Forbes |
• |
Expanded BMORE TM , our inclusive hiring and employment program focused on improving access to careers, skills and advancement in the financial industry for under-represented groups |
• |
Continue to attract and develop a diverse workforce while promoting an inclusive workplace |
• |
Maintain a world-class, winning culture and continue to drive strong employee engagement |
BMO Financial Group 206th Annual Report 2023 | 49 |
(Canadian $ in millions, except as noted) As at or for the year ended October 31 |
2023 |
2022 | ||||||
Net interest income (teb) (2) |
7,853 |
5,037 | ||||||
Non-interest revenue |
1,573 |
1,265 | ||||||
Total revenue (teb) (2) |
9,426 |
6,302 | ||||||
Provision for credit losses on impaired loans |
380 |
107 | ||||||
Provision for (recovery of) credit losses on performing loans |
130 |
(90 | ) | |||||
Total provision for credit losses |
510 |
17 | ||||||
Non-interest expense |
5,502 |
3,043 | ||||||
Income before income taxes |
3,414 |
3,242 | ||||||
Provision for income taxes (teb) (2) |
690 |
745 | ||||||
Reported net income |
2,724 |
2,497 | ||||||
Amortization of acquisition-related intangible assets (3) |
234 |
5 | ||||||
Adjusted net income |
2,958 |
2,502 | ||||||
Adjusted non-interest expense |
5,187 |
3,037 | ||||||
Net income available to common shareholders |
2,672 |
2,461 | ||||||
Adjusted net income available to common shareholders |
2,906 |
2,466 | ||||||
Average earning assets |
202,155 |
138,094 | ||||||
Average gross loans and acceptances |
196,45 9 |
132,240 | ||||||
Average net loans and acceptances |
194,746 |
131,394 | ||||||
Average deposits |
198,717 |
145,633 | ||||||
(US$ equivalent in millions) | ||||||||
Net interest income (teb) (2) |
5,818 |
3,893 | ||||||
Non-interest revenue |
1,165 |
981 | ||||||
Total revenue (teb) (2) |
6,983 |
4,874 | ||||||
Provision for credit losses on impaired loans |
282 |
82 | ||||||
Provision for (recovery of) credit losses on performing loans |
97 |
(71 | ) | |||||
Total provision for credit losses |
379 |
11 | ||||||
Non-interest expense |
4,076 |
2,353 | ||||||
Income before income taxes |
2,528 |
2,510 | ||||||
Provision for income taxes (teb) (2) |
510 |
577 | ||||||
Reported net income |
2,018 |
1,933 | ||||||
Amortization of acquisition-related intangible assets (3) |
173 |
4 | ||||||
Adjusted net income |
2,191 |
1,937 | ||||||
Adjusted non-interest expense |
3,843 |
2,348 | ||||||
Net income available to common shareholders |
1,979 |
1,905 | ||||||
Adjusted net income available to common shareholders |
2,157 |
1,909 | ||||||
Key Performance Metrics (US$ basis) |
||||||||
Personal and Business Banking revenue |
2,620 |
1,420 | ||||||
Commercial Banking revenue |
4,363 |
3,454 | ||||||
Return on equity (%) (4) |
9.6 |
17.8 | ||||||
Adjusted return on equity (%) (4) |
10.4 |
17.8 | ||||||
Operating leverage (teb) (%) |
(29.9 |
) |
6.0 | |||||
Adjusted operating leverage (teb) (%) |
(20.3 |
) |
5.0 | |||||
Efficiency ratio (teb) (%) |
58.4 |
48.3 | ||||||
Adjusted efficiency ratio (teb) (%) |
55.0 |
48.2 | ||||||
Net interest margin on average earning assets (teb) (%) |
3.8 8 |
3.64 | ||||||
PCL on impaired loans to average net loans and acceptances (%) |
0.2 0 |
0.08 | ||||||
Average earning assets |
149,767 |
106,829 | ||||||
Average gross loans and acceptances |
145,543 |
102,290 | ||||||
Average net loans and acceptances |
144,274 |
101,636 | ||||||
Average deposits |
147,220 |
112,780 | ||||||
Full-time equivalent employees |
12,235 |
6,822 |
(1) | Adjusted results and ratios are on a non-GAAP basis and are discussed in the Non-GAAP and Other Financial Measures section. |
(2) | Taxable equivalent basis (teb) amounts of $33 million in fiscal 2023 and $25 million in fiscal 2022 were recorded in net interest income, revenue and provision for income taxes, and were reflected in the ratios. On a source currency basis, teb amounts were US$25 million in fiscal 2023 and US$20 million in fiscal 2022. |
(3) | Amortization of acquisition-related intangible assets pre-tax amounts of $315 million in fiscal 2023 and $6 million in fiscal 2022 were recorded in non-interest expense. On a source currency basis, pre-tax amounts were US$233 million in fiscal 2023 and US$5 million in fiscal 2022. |
(4) | Return on equity is based on allocated capital. Effective fiscal 2023, the capital allocation rate increased to 11.0% of risk-weighted assets, compared with 10.5% in fiscal 2022. For further information, refer to the Non-GAAP and Other Financial Measures section. |
50 |
BMO Financial Group 206th Annual Report 2023 |
BMO Financial Group 206th Annual Report 2023 | 51 |
• |
Achieved top-tier loyalty scores across several BMO Wealth Management businesses, with Private Wealth Canada and BMO InvestorLine achieving record results, as measured by Net Promoter Score (1) |
• |
Recognized by World Finance th consecutive year and for the first time, as Best Private Bank in the United States |
• |
Accelerate growth across our client base by strengthening product and service offerings, deepening client relationships and growing distribution in core markets, while maintaining top-tier client loyalty scores in North America |
• |
Launched new capabilities in exchange-traded funds (ETFs), providing investors with more choice in portfolio construction, as well as solutions for investors seeking exposure to key sectors |
• |
Maintained our leadership position in Canadian ETFs, ranking first in net sales for 12 consecutive years (2) |
• |
Recognized at the 2022 Canada Refinitiv Lipper Fund Awards (3) , which honour funds and fund management firms that have excelled in delivering consistently strong risk-adjusted performance relative to their peers. Seven BMO ETFs claimed top honours across seven categories |
• |
Received 18 FundGrade A+ Awards from Fundata Canada Inc., one of the most widely recognized analytics firms in the financial services industry for its objectivity in selecting funds with a record of consistent risk-adjusted performance |
• |
Announced a new strategic partnership with Sagard, a global multi-strategy alternative asset management firm, in line with our commitment to building a market-leading alternatives platform with access to demonstrated investment experience through partnerships with top-tier managers |
• |
Launched ESG Insights, a comprehensive research tool for self-directed clients that can help them build a more sustainable portfolio by evaluating environmental, social and governance risks and opportunities related to their investments |
• |
Continue to provide innovative and competitive product solutions across our distribution channels to meet the evolving needs of our clients |
(1) | Net Promoter Score (NPS): The percentage of customers surveyed who would recommend BMO to a friend or colleague. |
(2) | National Bank ETF Report as at December 31, 2022. |
(3) | Announced in fiscal 2023: 2022 Canada Refinitiv Lipper Fund Awards. |
52 |
BMO Financial Group 206th Annual Report 2023 |
• |
Maintained a top-two market share for self-managed assets with digital advisory services – a category that represents more than one third of total market assets |
• |
BMO InvestorLine ranked in the top three in the Globe and Mail |
• |
Successfully rolled out BMO Smart Portfolio ® , a new digital investment solution for BMO U.S. retail customers, providing them with the convenience of online investing and personalized portfolio management |
• |
Launched BMO Active Trader, a web-based platform that enables our clients to execute trading strategies with ease and precision, supported by market insights, advanced technical charts and a customizable workspace |
• |
Continue to invest in technology platforms to simplify, streamline and integrate client digital experiences, along with leading advisor-facing tools and practice support |
• |
Leveraged digital channels and data analytics to deliver investment solutions to Personal Banking customers through BMO InvestorLine |
• |
Significantly expanded product and service offerings through greater collaboration and more efficient integration with Personal and Commercial Banking |
• |
Deepen client relationships by working in partnership with colleagues across BMO, supported by data and analytics and a client-centric operating |
• |
Maintained strong employee engagement index scores, with improvement across many key metrics |
• |
Well-represented in the inaugural Globe and Mail |
• |
Maintain an engaged and diverse workforce to promote innovation and enable strategic outperformance |
BMO Financial Group 206th Annual Report 2023 | 53 |
(Canadian $ in millions, except as noted) As at or for the year ended October 31 |
2023 |
2022 | ||||||
Net interest income |
1,416 |
1,188 | ||||||
Non-interest revenue |
5,978 |
3,336 | ||||||
Total revenue |
7,394 |
4,524 | ||||||
Insurance claims, commissions and changes in policy benefit liabilities (CCPB) |
1,939 |
(683 | ) | |||||
Revenue, net of CCPB |
5,455 |
5,207 | ||||||
Provision for credit losses on impaired loans |
5 |
2 | ||||||
Provision for (recovery of) credit losses on performing loans |
13 |
(4 | ) | |||||
Total provision for (recovery of) credit losses |
18 |
(2 | ) | |||||
Non-interest expense |
3,962 |
3,564 | ||||||
Income before income taxes |
1,475 |
1,645 | ||||||
Provision for income taxes |
349 |
394 | ||||||
Reported net income |
1,126 |
1,251 | ||||||
Amortization of acquisition-related intangible assets (2) |
4 |
3 | ||||||
Adjusted net income |
1,130 |
1,254 | ||||||
Adjusted non-interest expense |
3,955 |
3,559 | ||||||
Net income available to common shareholders |
1,118 |
1,243 | ||||||
Adjusted net income available to common shareholders |
1,122 |
1,246 | ||||||
Key Performance Metrics |
||||||||
Wealth and Asset Management reported net income |
862 |
992 | ||||||
Wealth and Asset Management adjusted net income |
866 |
995 | ||||||
Insurance net income |
264 |
259 | ||||||
Return on equity (%) (3) |
17.6 |
23.5 | ||||||
Adjusted return on equity (%) (3) |
17.7 |
23.6 | ||||||
Operating leverage, net of CCPB (%) |
(6.4 |
) |
(0.7 | ) | ||||
Adjusted operating leverage, net of CCPB (%) |
(6.3 |
) |
(1.3 | ) | ||||
Efficiency ratio (%) |
53.6 |
78.8 | ||||||
Adjusted efficiency ratio, net of CCPB (%) |
72.5 |
68.4 | ||||||
Average assets |
58,661 |
50,488 | ||||||
Average gross loans and acceptances |
40,851 |
34,007 | ||||||
Average net loans and acceptances |
40,805 |
33,974 | ||||||
Average deposits |
61,739 |
55,919 | ||||||
Assets under administration (AUA) (4) |
416,352 |
424,191 | ||||||
Assets under management (AUM) |
332,947 |
305,462 | ||||||
Full-time equivalent employees |
6,417 |
6,124 | ||||||
U.S. Business Select Financial Data (US$ in millions) |
||||||||
Total revenue |
774 |
576 | ||||||
Non-interest expense |
599 |
458 | ||||||
Reported net income |
132 |
91 | ||||||
Adjusted non-interest expense |
594 |
454 | ||||||
Adjusted net income |
136 |
94 | ||||||
Average gross loans and acceptances |
9,776 |
5,937 | ||||||
Average deposits |
11,975 |
7,528 |
(1) | Revenue measures, net of CCPB, and adjusted results and ratios are on a non-GAAP basis and are discussed in the Non-GAAP and Other Financial Measures section. |
(2) | Amortization of acquisition-related intangible assets pre-tax amounts of $7 million in fiscal 2023 and $5 million in fiscal 2022 were recorded in non-interest expense. |
(3) | Return on equity is based on allocated capital. Effective fiscal 2023, the capital allocation rate increased to 11.0% of risk-weighted assets, compared with 10.5% in fiscal 2022. For further information, refer to the Non-GAAP and Other Financial Measures section. |
(4) | Certain assets under management that are also administered by BMO are included in assets under administration. |
54 |
BMO Financial Group 206th Annual Report 2023 |
BMO Financial Group 206th Annual Report 2023 | 55 |
• |
Maintained a leading position in global and North American mergers and acquisitions (M&A), advising on landmark transactions, including the largest investment to date by an automaker to produce battery raw materials, the largest industrial real estate investment trust (REIT) transaction in Canadian history and the third-largest public net lease REIT |
• |
Partnered with Commercial Banking to deliver holistic, integrated coverage that resulted in successful convertible note offerings and middle-market M&A deals. This unified approach also delivered success with transitioning Bank of the West clients to the BMO platform, such as Wayfair and Granite Construction |
• |
Maintained global leadership in metals and mining, and recognized as the world’s best Metals & Mining Investment Bank by Global Finance th consecutive year |
• |
Delivered top-tier product performance across Global Markets – awarded Best Issuer Sales in Canadian retail structured notes, ranked first in Canadian equity block volumes and recognized as a top-five dealer in sovereign, supranational and agency (SSA) USD global issuances, U.S. treasuries, U.S. agency collateralized mortgage obligations (CMOs) and U.S. commercial mortgage-backed securities (CMBS) issuances |
• |
Accelerate a One Client approach, with improved connectivity and integrated offerings |
• |
Build deep client relationships, deliver value-added solutions to meet their needs, and win through expertise, knowledge and insight |
• |
Played a leadership role in sustainabl e fin ance and energy transition solutions – we ranked first in the sustainability-linked loan market, launched one of the first sustainability-linked deposit offerings in North America and acted as co-lead manager on the government of Canada’s Ukraine sovereignty bond, which was recognized as Social Bond of the Year by Environmental Finance |
• |
Advanced our Climate Ambition, adding carbon market expertise and capabilities with the integration of BMO Radicle |
• |
Signed a memorandum of understanding with Banco do Brasil to provide sustainability-linked trade loans to Brazilian exporters, a first of its kind program that will accelerate lending to companies focused on sustainable and regenerative agriculture |
• |
Sponsored and contributed thought leadership to industry-leading climate events such as the Bloomberg Sustainable Business Summit and New Energy Finance Forum, as well as our new Transition Think Summit |
• |
Maintain our leading position in sustainable finance and build on our strong foundation in climate leadership by adding capabilities to serve rapidly evolving markets |
56 |
BMO Financial Group 206th Annual Report 2023 |
• |
Scaled our digital capabilities to deliver new service models and enhance our offerings, including end-to-end |
• |
Launched an agile testing and innovation environment for emerging technologies, including artificial intelligence and machine learning |
• |
Implemented technology and workflow enhancements, as well as process automation to improve employee productivity |
• |
Recognized with Breaking the Status Quo and Leading the Pack awards from Fintech Open Source Foundation for our progress on open source readiness |
• |
Leverage Digital First capabilities and data to improve operational efficiency and deliver innovative solutions |
• |
Deliver client-centric, digitally-enabled service models with leading digital client portals and platforms |
• |
Maintained strong employee engagement index scores, with ongoing improvement in all priority areas of our winning culture, including enablement and empowerment |
• |
Continued to make progress on our Zero Barriers to Inclusion strategy, supporting communities through our hallmark programs, including Equity Through Education Trees from Trades |
• |
Advanced our diversity, equity and inclusion strategy and improved the representation of diversity in our talented and engaged workforce |
• |
Foster a winning culture focused on alignment, empowerment and recognition, while advancing progress on our Zero Barriers to Inclusion strategy |
BMO Financial Group 206th Annual Report 2023 | 57 |
(Canadian $ in millions, except as noted) As at or for the year ended October 31 |
2023 |
2022 | ||||||
Net interest income (teb) (2) |
2,553 |
3,197 | ||||||
Non-interest revenue |
3,897 |
2,975 | ||||||
Total revenue (teb) (2) |
6,450 |
6,172 | ||||||
Provision for (recovery of) credit losses on impaired loans |
9 |
(32 | ) | |||||
Provision for (recovery of) credit losses on performing loans |
9 |
(11 | ) | |||||
Total provision for (recovery of) credit losses |
18 |
(43 | ) | |||||
Non-interest expense |
4,279 |
3,855 | ||||||
Income before income taxes |
2,153 |
2,360 | ||||||
Provision for income taxes (teb) (2) |
471 |
588 | ||||||
Reported net income |
1,682 |
1,772 | ||||||
Acquisition and integration costs (3) |
4 |
8 | ||||||
Amortization of acquisition-related intangible assets (4) |
20 |
14 | ||||||
Adjusted net income |
1,706 |
1,794 | ||||||
Adjusted non-interest expense |
4,247 |
3,826 | ||||||
Net income available to common shareholders |
1,648 |
1,732 | ||||||
Adjusted net income available to common shareholders |
1,672 |
1,754 | ||||||
Key Performance Metrics |
||||||||
Global Markets revenue |
3,856 |
3,763 | ||||||
Investment and Corporate Banking revenue |
2,594 |
2,409 | ||||||
Return on equity (%) (5) |
13.9 |
15.0 | ||||||
Adjusted return on equity (%) (5) |
14.1 |
15.2 | ||||||
Operating leverage (teb) (%) |
(6.5 |
) |
(10.6 | ) | ||||
Adjusted operating leverage (teb) (%) |
(6.5 |
) |
(10.8 | ) | ||||
Efficiency ratio (teb) (%) |
66.3 |
62.5 | ||||||
Adjusted efficiency ratio (teb) (%) |
65.8 |
62.0 | ||||||
PCL on impaired loans to average net loans and acceptances (%) |
0.01 |
(0.05 | ) | |||||
Average assets |
416,261 |
390,306 | ||||||
Average gross loans and acceptances |
77,058 |
63,254 | ||||||
Average net loans and acceptances |
76,751 |
62,986 | ||||||
Full-time equivalent employees |
2,717 |
2,815 | ||||||
U.S. Business Select Financial Data (US$ in millions) |
||||||||
Total revenue (teb) (2) |
2,052 |
2,010 | ||||||
Non-interest expense |
1,617 |
1,471 | ||||||
Reported net income |
311 |
415 | ||||||
Adjusted non-interest expense |
1,604 |
1,450 | ||||||
Adjusted net income |
320 |
431 | ||||||
Average assets |
138,475 |
135,030 | ||||||
Average gross loans and acceptances |
29,003 |
25,118 |
(1) | Adjusted results and ratios are on a non-GAAP basis and are discussed in the Non-GAAP and Other Financial Measures section. |
(2) | Taxable equivalent basis (teb) amounts of $321 million in fiscal 2023 and $245 million in fiscal 2022 were recorded in net interest income, revenue and provision for income taxes, and were reflected in the ratios. For our U.S. businesses, teb amounts were US$nil in fiscal 2023 and US$11 million in fiscal 2022. |
(3) | Pre-tax acquisition and integration costs related to Clearpool and Radicle of $5 million in fiscal 2023 were recorded in non-interest expense. Pre-tax acquisition and integration costs related to KGS-Alpha and Clearpool of $10 million in fiscal 2022 were recorded in non-interest expense. |
(4) | Amortization of acquisition-related intangible assets pre-tax amounts of $27 million in fiscal 2023 and $19 million in fiscal 2022 were recorded in non-interest expense. |
(5) | Return on equity is based on allocated capital. Effective fiscal 2023, the capital allocation rate increased to 11.0% of risk-weighted assets, compared with 10.5% in fiscal 2022. For further information, refer to the Non-GAAP and Other Financial Measures section. |
58 |
BMO Financial Group 206th Annual Report 2023 |
BMO Financial Group 206th Annual Report 2023 | 59 |
(Canadian $ in millions, except as noted) As at or for the year ended October 31 |
2023 |
2022 | ||||||
Net interest income before group teb offset |
(1,095 |
) |
(716 | ) | ||||
Group teb offset |
(354 |
) |
(270 | ) | ||||
Net interest income (teb) |
(1,449 |
) |
(986 | ) | ||||
Non-interest revenue |
(1,449 |
) |
7,830 | |||||
Total revenue (teb) |
(2,898 |
) |
6,844 | |||||
Provision for (recovery of) credit losses on impaired loans |
2 |
(7 | ) | |||||
Provision for (recovery of) credit losses on performing loans |
700 |
7 | ||||||
Total provision for (recovery of) credit losses |
702 |
– | ||||||
Non-interest expense |
2,706 |
1,383 | ||||||
Income (loss) before income taxes |
(6,306 |
) |
5,461 | |||||
Provision for (recovery of) income taxes (teb) |
(1,433 |
) |
1,270 | |||||
Reported net income (loss) |
(4,873 |
) |
4,191 | |||||
Initial provision for credit losses on purchased performing loans (2) |
517 |
– | ||||||
Acquisition and integration costs (3) |
1,520 |
237 | ||||||
Impact of divestitures (4) |
– |
55 | ||||||
Management of fair value changes on the purchase of Bank of the West (5) |
1,461 |
(5,667 | ) | |||||
Legal provision (including related interest expense and legal fees) (6) |
21 |
846 | ||||||
Impact of Canadian tax measures (7) |
502 |
– | ||||||
Adjusted net loss |
(852 |
) |
(338 | ) | ||||
Adjusted total revenue (teb) |
(719 |
) |
(333 | ) | ||||
Adjusted total recovery of credit losses |
(3 |
) |
– | |||||
Adjusted non-interest expense |
660 |
424 | ||||||
Net income (loss) available to common shareholders |
(5,081 |
) |
4,087 | |||||
Adjusted net loss available to common shareholders |
(1,060 |
) |
(442 | ) | ||||
Full-time equivalent employees |
18,181 |
15,490 | ||||||
U.S. Business Select Financial Data (US$ in millions) |
||||||||
Total revenue (teb) (8) |
(956 |
) |
5,604 | |||||
Total provision for (recovery of) credit losses |
518 |
(4 | ) | |||||
Non-interest expense |
1,688 |
686 | ||||||
Provision for (recovery of) income taxes (teb) (8) |
(791 |
) |
1,282 | |||||
Reported net income (loss) |
(2,371 |
) |
3,640 | |||||
Adjusted total revenue |
571 |
106 | ||||||
Adjusted total provision for (recovery of) credit losses |
1 |
(4 | ) | |||||
Adjusted non-interest expense |
190 |
44 | ||||||
Adjusted net income (loss) |
240 |
83 |
(1) | Adjusted results are on a non-GAAP basis and are discussed in the Non-GAAP and Other Financial Measures section. |
(2) | Fiscal 2023 reported net income included a provision for credit losses of $517 million ($705 million pre-tax) on the purchased Bank of the West performing loan portfolio. |
(3) | Fiscal 2023 reported net income included acquisition and integration costs related to Bank of the West of $1,520 million ($2,027 million pre-tax), and fiscal 2022 included $237 million ($316 million pre-tax). These amounts were recorded in non-interest expense. |
(4) | Fiscal 2022 reported net income included the impact of divestitures related to the sale of our EMEA and U.S. Asset Management businesses, comprising a gain of $8 million related to the transfer of certain U.S. asset management clients and a $29 million loss related to foreign currency translation reclassified from accumulated other comprehensive income, both recorded in non-interest revenue, and expenses of $16 million, including taxes of $22 million on the closing of the sale, recorded in non-interest expense. |
(5) | Fiscal 2023 reported net income included a loss of $1,461 million ($2,011 million pre-tax) 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, comprising $1,628 million of mark-to-market pre-tax), comprising $7,665 million of mark-to-market non-trading interest income. For further information on this acquisition, refer to the Recent Acquisitions section. |
(6) | Fiscal 2023 reported net income included the impact of a lawsuit associated with a predecessor bank, M&I Marshall and Ilsley Bank, of $21 million ($27 million pre-tax), comprising interest expense of $30 million and a net non-interest expense recovery of $3 million. Fiscal 2022 included a provision of $846 million ($1,142 million pre-tax), comprising interest expense of $515 million and non-interest expense of $627 million. For further information, refer to the Provisions and Contingent Liabilities section in Note 24 of the audited annual consolidated financial statements. |
(7) | Fiscal 2023 reported net income included the impact of certain tax measures enacted by the Canadian government. These tax measures 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, and 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. |
(8) | Fiscal 2023 reported net income included group teb offset amounts for our U.S. businesses of US$25 million and fiscal 2022 included US$31 million, recorded in revenue and provision for (recovery of) income taxes. |
60 |
BMO Financial Group 206th Annual Report 2023 |
(Canadian $ in millions, except as noted) | Q4-2023 |
Q3-2023 |
Q2-2023 |
Q1-2023 |
Q4-2022 |
Q3-2022 |
Q2-2022 |
Q1-2022 | ||||||||||||||||||||||||
Net interest income |
4,941 |
4,905 |
4,814 |
4,021 |
3,767 | 4,197 | 3,902 | 4,019 | ||||||||||||||||||||||||
Non-interest revenue |
3,419 |
3,024 |
3,626 |
2,449 |
6,803 | 1,902 | 5,416 | 3,704 | ||||||||||||||||||||||||
Revenue (1) |
8,360 |
7,929 |
8,440 |
6,470 |
10,570 | 6,099 | 9,318 | 7,723 | ||||||||||||||||||||||||
Insurance claims, commissions and changes in policy benefit liabilities (CCPB) |
151 |
4 |
591 |
1,193 |
(369 | ) | 413 | (808 | ) | 81 | ||||||||||||||||||||||
Revenue, net of CCPB (1) |
8,209 |
7,925 |
7,849 |
5,277 |
10,939 | 5,686 | 10,126 | 7,642 | ||||||||||||||||||||||||
Provision for credit losses on impaired loans |
408 |
333 |
243 |
196 |
192 | 104 | 120 | 86 | ||||||||||||||||||||||||
Provision for (recovery of) credit losses on performing loans |
38 |
159 |
780 |
21 |
34 | 32 | (70 | ) | (185 | ) | ||||||||||||||||||||||
Total provision for (recovery of) credit losses |
446 |
492 |
1,023 |
217 |
226 | 136 | 50 | (99 | ) | |||||||||||||||||||||||
Non-interest expense |
5,700 |
5,594 |
5,522 |
4,403 |
4,776 | 3,859 | 3,713 | 3,846 | ||||||||||||||||||||||||
Income before income taxes |
2,063 |
1,839 |
1,304 |
657 |
5,937 | 1,691 | 6,363 | 3,895 | ||||||||||||||||||||||||
Provision for income taxes |
446 |
385 |
245 |
410 |
1,454 | 326 | 1,607 | 962 | ||||||||||||||||||||||||
Reported net income (see below) |
1,617 |
1,454 |
1,059 |
247 |
4,483 | 1,365 | 4,756 | 2,933 | ||||||||||||||||||||||||
Initial provision for credit losses on purchased performing loans (2) |
– |
– |
517 |
– |
– | – | – | – | ||||||||||||||||||||||||
Acquisition and integration costs (3) |
433 |
370 |
549 |
181 |
145 | 62 | 28 | 10 | ||||||||||||||||||||||||
Amortization of acquisition-related intangible assets (4) |
88 |
85 |
85 |
6 |
6 | 5 | 6 | 6 | ||||||||||||||||||||||||
Impact of divestitures (5) |
– |
– |
– |
– |
(8 | ) | 6 | 9 | 48 | |||||||||||||||||||||||
Management of fair value changes on the purchase of Bank of the West (6) |
– |
– |
– |
1,461 |
(3,336 | ) | 694 | (2,612 | ) | (413 | ) | |||||||||||||||||||||
Legal provision (including related interest expense and legal fees) (7) |
12 |
(3 |
) |
6 |
6 |
846 | – | – | – | |||||||||||||||||||||||
Impact of Canadian tax measures (8) |
– |
131 |
– |
371 |
– | – | – | – | ||||||||||||||||||||||||
Adjusted net income |
2,150 |
2,037 |
2,216 |
2,272 |
2,136 | 2,132 | 2,187 | 2,584 | ||||||||||||||||||||||||
Operating Group Reported and Adjusted Net Income |
||||||||||||||||||||||||||||||||
Canadian P&C reported net income |
962 |
915 |
861 |
980 |
917 | 965 | 940 | 1,004 | ||||||||||||||||||||||||
Acquisition and integration costs (3) |
1 |
6 |
2 |
– |
– | – | – | – | ||||||||||||||||||||||||
Amortization of acquisition-related intangible assets (4) |
3 |
2 |
1 |
– |
– | – | 1 | – | ||||||||||||||||||||||||
Canadian P&C adjusted net income |
966 |
923 |
864 |
980 |
917 | 965 | 941 | 1,004 | ||||||||||||||||||||||||
U.S. P&C reported net income |
661 |
576 |
789 |
698 |
660 | 568 | 588 | 681 | ||||||||||||||||||||||||
Amortization of acquisition-related intangible assets (4) |
79 |
77 |
77 |
1 |
2 | 1 | 1 | 1 | ||||||||||||||||||||||||
U.S. P&C adjusted net income |
740 |
653 |
866 |
699 |
662 | 569 | 589 | 682 | ||||||||||||||||||||||||
BMO Wealth Management reported net income |
262 |
303 |
284 |
277 |
298 | 324 | 314 | 315 | ||||||||||||||||||||||||
Amortization of acquisition-related intangible assets (4) |
1 |
1 |
1 |
1 |
– | 1 | 1 | 1 | ||||||||||||||||||||||||
BMO Wealth Management adjusted net income |
263 |
304 |
285 |
278 |
298 | 325 | 315 | 316 | ||||||||||||||||||||||||
BMO Capital Markets reported net income |
489 |
310 |
380 |
503 |
357 | 262 | 448 | 705 | ||||||||||||||||||||||||
Acquisition and integration costs (3) |
(2 |
) |
1 |
2 |
3 |
2 | 1 | 2 | 3 | |||||||||||||||||||||||
Amortization of acquisition-related intangible assets (4) |
5 |
5 |
6 |
4 |
4 | 3 | 3 | 4 | ||||||||||||||||||||||||
BMO Capital Markets adjusted net income |
492 |
316 |
388 |
510 |
363 | 266 | 453 | 712 | ||||||||||||||||||||||||
Corporate Services reported net income (loss) |
(757 |
) |
(650 |
) |
(1,255 |
) |
(2,211 |
) |
2,251 | (754 | ) | 2,466 | 228 | |||||||||||||||||||
Initial provision for credit losses on purchased performing loans (2) |
– |
– |
517 |
– |
– | – | – | – | ||||||||||||||||||||||||
Acquisition and integration costs (3) |
434 |
363 |
545 |
178 |
143 | 61 | 26 | 7 | ||||||||||||||||||||||||
Impact of divestitures (5) |
– |
– |
– |
– |
(8 | ) | 6 | 9 | 48 | |||||||||||||||||||||||
Management of fair value changes on the purchase of Bank of the West (6) |
– |
– |
– |
1,461 |
(3,336 | ) | 694 | (2,612 | ) | (413 | ) | |||||||||||||||||||||
Legal provision (including related interest expense and legal fees) (7) |
12 |
(3 |
) |
6 |
6 |
846 | – | – | – | |||||||||||||||||||||||
Impact of Canadian tax measures (8) |
– |
131 |
– |
371 |
– | – | – | – | ||||||||||||||||||||||||
Corporate Services adjusted net income (loss) |
(311 |
) |
(159 |
) |
(187 |
) |
(195 |
) |
(104 | ) | 7 | (111 | ) | (130 | ) | |||||||||||||||||
Key Performance Metrics |
||||||||||||||||||||||||||||||||
Basic earnings per share ($) (9) |
2.07 |
1.97 |
1.31 |
0.30 |
6.52 | 1.96 | 7.15 | 4.44 | ||||||||||||||||||||||||
Diluted earnings per share ($) (9) |
2.06 |
1.97 |
1.30 |
0.30 |
6.51 | 1.95 | 7.13 | 4.43 | ||||||||||||||||||||||||
Adjusted diluted earnings per share ($) |
2.81 |
2.78 |
2.93 |
3.22 |
3.04 | 3.09 | 3.23 | 3.89 | ||||||||||||||||||||||||
Net interest margin on average earning assets (%) |
1.66 |
1.68 |
1.69 |
1.48 |
1.46 | 1.71 | 1.69 | 1.64 | ||||||||||||||||||||||||
PCL-to-average (%) |
0.27 |
0.30 |
0.65 |
0.15 |
0.16 | 0.10 | 0.04 | (0.08 | ) | |||||||||||||||||||||||
PCL on impaired loans-to-average (%) |
0.25 |
0.21 |
0.16 |
0.14 |
0.14 | 0.08 | 0.10 | 0.07 | ||||||||||||||||||||||||
Effective tax rate (%) |
21.6 |
20.9 |
18.8 |
62.5 |
24.5 | 19.3 | 25.2 | 24.7 | ||||||||||||||||||||||||
Adjusted effective tax rate (%) |
22.7 |
21.8 |
22.5 |
22.3 |
21.8 | 22.0 | 23.6 | 23.5 | ||||||||||||||||||||||||
Canadian/U.S. dollar average exchange rate ($) |
1.3648 |
1.3331 |
1.3564 |
1.3426 |
1.3516 | 1.2774 | 1.2665 | 1.2710 |
(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; and 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) | Reported net income included a provision for credit losses of $517 million ($705 million pre-tax) on the acquired Bank of the West performing loan portfolio in Q2-2023, recorded in Corporate Services. |
(3) | 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: 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), Q1-2023 included $178 million ($235 million pre-tax), 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 Radicle and Clearpool were recorded in BMO Capital Markets: 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), 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). Q4-2023 included a recovery of $2 million ($3 million pre-tax). Costs related to the acquisition of AIR MILES were recorded in Canadian P&C: 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). |
BMO Financial Group 206th Annual Report 2023 | 61 |
(4) | 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 and Q4-2022 both 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). |
(5) | 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 an $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 closing of the sale of our EMEA Asset Management businesses. These amounts were recorded in Corporate Services. |
(6) | 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 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 Q3-2022 included a loss of $694 million ($945 million pre-tax), comprising $983 million of mark-to-market Q2-2022 included revenue of $2,612 million ($3,555 million pre-tax), comprising $3,433 million of mark-to-market Q1-2022 included revenue of $413 million ($562 million pre-tax), comprising $517 million of mark-to-market |
(7) | 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. |
(8) | 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. |
(9) | Net income and earnings from our business operations are attributable to shareholders by way of EPS and diluted EPS. Adjusted EPS and adjusted diluted EPS are non-GAAP measures. For further information, refer to the Non-GAAP and Other Financial Measures section. |
62 |
BMO Financial Group 206th Annual Report 2023 |
BMO Financial Group 206th Annual Report 2023 | 63 |
(Canadian $ in millions) | Canadian P&C |
U.S. P&C |
Total P&C |
BMO Wealth Management |
BMO Capital Markets |
Corporate Services |
Total Bank |
|||||||||||||||||||||
2022 |
||||||||||||||||||||||||||||
Net interest income (loss) (1) |
7,449 | 5,037 | 12,486 | 1,188 | 3,197 | (986 | ) | 15,885 | ||||||||||||||||||||
Non-interest revenue |
2,419 | 1,265 | 3,684 | 3,336 | 2,975 | 7,830 | 17,825 | |||||||||||||||||||||
Revenue (1) |
9,868 | 6,302 | 16,170 | 4,524 | 6,172 | 6,844 | 33,710 | |||||||||||||||||||||
Insurance claims, commissions and changes in policy benefit liabilities (CCPB) |
– | – | – | (683 | ) | – | – | (683 | ) | |||||||||||||||||||
Revenue, net of CCPB |
9,868 | 6,302 | 16,170 | 5,207 | 6,172 | 6,844 | 34,393 | |||||||||||||||||||||
Provision for (recovery of) credit losses |
341 | 17 | 358 | (2 | ) | (43 | ) | – | 313 | |||||||||||||||||||
Non-interest expense |
4,349 | 3,043 | 7,392 | 3,564 | 3,855 | 1,383 | 16,194 | |||||||||||||||||||||
Income before income taxes |
5,178 | 3,242 | 8,420 | 1,645 | 2,360 | 5,461 | 17,886 | |||||||||||||||||||||
Provision for income taxes (1) |
1,352 | 745 | 2,097 | 394 | 588 | 1,270 | 4,349 | |||||||||||||||||||||
Net income (loss) |
3,826 | 2,497 | 6,323 | 1,251 | 1,772 | 4,191 | 13,537 | |||||||||||||||||||||
Acquisition and integration costs |
– | – | – | – | 8 | 237 | 245 | |||||||||||||||||||||
Amortization of acquisition-related intangible assets |
1 | 5 | 6 | 3 | 14 | – | 23 | |||||||||||||||||||||
Impact of divestitures |
– | – | – | – | – | 55 | 55 | |||||||||||||||||||||
Restructuring costs (reversals) |
– | – | – | – | – | – | – | |||||||||||||||||||||
Legal provision (including related interest expense and legal fees) |
– | – | – | – | – | 846 | 846 | |||||||||||||||||||||
Management of fair value changes on the purchase of Bank of the West |
– | – | – | – | – | (5,667 | ) | (5,667 | ) | |||||||||||||||||||
Adjusted net income (loss) |
3,827 | 2,502 | 6,329 | 1,254 | 1,794 | (338 | ) | 9,039 | ||||||||||||||||||||
2021 |
||||||||||||||||||||||||||||
Net interest income (loss) (1) |
6,561 | 4,268 | 10,829 | 982 | 3,115 | (616 | ) | 14,310 | ||||||||||||||||||||
Non-interest revenue |
2,225 | 1,243 | 3,468 | 6,071 | 3,011 | 326 | 12,876 | |||||||||||||||||||||
Revenue (1) |
8,786 | 5,511 | 14,297 | 7,053 | 6,126 | (290 | ) | 27,186 | ||||||||||||||||||||
Insurance claims, commissions and changes in policy benefit liabilities (CCPB) |
– | – | – | 1,399 | – | – | 1,399 | |||||||||||||||||||||
Revenue, net of CCPB |
8,786 | 5,511 | 14,297 | 5,654 | 6,126 | (290 | ) | 25,787 | ||||||||||||||||||||
Provision for (recovery of) credit losses |
377 | (144 | ) | 233 | (12 | ) | (194 | ) | (7 | ) | 20 | |||||||||||||||||
Non-interest expense |
3,968 | 2,813 | 6,781 | 3,843 | 3,462 | 1,423 | 15,509 | |||||||||||||||||||||
Income (loss) before income taxes |
4,441 | 2,842 | 7,283 | 1,823 | 2,858 | (1,706 | ) | 10,258 | ||||||||||||||||||||
Provision for (recovery of) income taxes (1) |
1,153 | 666 | 1,819 | 441 | 738 | (494 | ) | 2,504 | ||||||||||||||||||||
Net income (loss) |
3,288 | 2,176 | 5,464 | 1,382 | 2,120 | (1,212 | ) | 7,754 | ||||||||||||||||||||
Acquisition and integration costs |
– | – | – | – | 7 | – | 7 | |||||||||||||||||||||
Amortization of acquisition-related intangible assets |
1 | 24 | 25 | 24 | 17 | – | 66 | |||||||||||||||||||||
Impact of divestitures |
– | – | – | – | – | 842 | 842 | |||||||||||||||||||||
Restructuring costs (reversals) |
– | – | – | – | – | (18 | ) | (18 | ) | |||||||||||||||||||
Adjusted net income (loss) |
3,289 | 2,200 | 5,489 | 1,406 | 2,144 | (388 | ) | 8,651 |
(1) | Operating group revenue, net interest income and provision for income taxes are presented on a taxable equivalent basis (teb). The offset to the groups’ teb adjustments is reflected in Corporate Services. For further information, refer to the How BMO Reports Operating Group Results section. |
64 |
BMO Financial Group 206th Annual Report 2023 |
(1) | The U.S. Small Business Administration Paycheck Protection Program (PPP) is a government relief program implemented in fiscal 2020 to support businesses that faced financial hardship caused by the COVID-19 pandemic. |
BMO Financial Group 206th Annual Report 2023 | 65 |
66 |
BMO Financial Group 206th Annual Report 2023 |
(Canadian $ in millions) As at October 31 |
2023 |
2022 | ||||||
Assets |
||||||||
Cash and cash equivalents and interest bearing deposits with banks |
82,059 |
93,200 | ||||||
Securities |
322,379 |
273,262 | ||||||
Securities borrowed or purchased under resale agreements |
115,662 |
113,194 | ||||||
Net loans |
656,478 |
551,339 | ||||||
Derivative instruments |
39,976 |
48,160 | ||||||
Other assets |
76,722 |
60,044 | ||||||
Total assets |
1,293,276 |
1,139,199 | ||||||
Liabilities and Equity |
||||||||
Deposits |
909,676 |
769,478 | ||||||
Derivative instruments |
50,193 |
59,956 | ||||||
Securities lent or sold under repurchase agreements |
106,108 |
103,963 | ||||||
Other liabilities |
142,034 |
126,614 | ||||||
Subordinated debt |
8,228 |
8,150 | ||||||
Equity |
77,009 |
71,038 | ||||||
Non-controlling interest in subsidiaries |
28 |
– | ||||||
Total liabilities and equity |
1,293,276 |
1,139,199 |
(Canadian $ in millions) As at October 31 |
2023 |
2022 | ||||||
Trading |
124,556 |
108,177 | ||||||
Fair value through profit or loss (FVTPL) (1) |
16,720 |
13,641 | ||||||
Fair value through other comprehensive income – Debt and equity (2) |
62,828 |
43,561 | ||||||
Amortized cost (3) |
116,814 |
106,590 | ||||||
Investments in associates and joint ventures |
1,461 |
1,293 | ||||||
Total securities |
322,379 |
273,262 |
(1) | Included securities mandatorily measured at FVTPL of $6,729 million ($4,410 million as at October 31, 2022) and securities designated at fair value of $9,991 million ($9,231 million as at October 31, 2022). |
(2) | Included allowances for credit losses on debt securities recorded at fair value through other comprehensive income of $3 million as at October 31, 2023 ($3 million as at October 31, 2022). |
(3) | Net of allowances for credit losses of $3 million ($3 million as at October 31, 2022). |
(Canadian $ in millions) As at October 31 |
2023 |
2022 | ||||||
Residential mortgages |
177,250 |
148,880 | ||||||
Consumer instalment and other personal |
104,040 |
86,103 | ||||||
Credit cards |
12,294 |
9,663 | ||||||
Businesses and governments |
366,701 |
309,310 | ||||||
Gross loans |
660,285 |
553,956 | ||||||
Allowance for credit losses |
(3,807 |
) |
(2,617 | ) | ||||
Total net loans |
656,478 |
551,339 |
BMO Financial Group 206th Annual Report 2023 | 67 |
(Canadian $ in millions) As at October 31 |
2023 |
2022 | ||||||
Banks |
29,587 |
30,901 | ||||||
Businesses and governments |
574,670 |
495,831 | ||||||
Individuals |
305,419 |
242,746 | ||||||
Total deposits |
909,676 |
769,478 |
(Canadian $ in millions) As at October 31 |
2023 |
2022 | ||||||
Share capital |
||||||||
Preferred shares and other equity instruments |
6,958 |
6,308 | ||||||
Common shares |
22,941 |
17,744 | ||||||
Contributed surplus |
328 |
317 | ||||||
Retained earnings |
44,920 |
45,117 | ||||||
Accumulated other comprehensive income |
1,862 |
1,552 | ||||||
Total equity |
77,009 |
71,038 |
68 |
BMO Financial Group 206th Annual Report 2023 |
• |
Is appropriate given BMO’s target regulatory capital ratios and internal assessment of economic capital requirements |
• |
Underpins BMO’s operating groups’ business strategies and considers the market environment |
• |
Supports depositor, investor and regulator confidence, while building long-term shareholder value |
• |
Is consistent with BMO’s target credit ratings. |
BMO Financial Group 206th Annual Report 2023 | 69 |
(% of risk-weighted assets or leverage exposures) | Minimum capital, leverage and TLAC requirements |
Total Pillar 1 Capital buffers (1) |
Tier 1 Capital buffer |
Domestic stability buffer (2) |
Minimum capital, leverage and TLAC requirements including capital buffers |
BMO capital, leverage and TLAC ratios as at October 31, 2023 |
||||||||||||||||||
Common Equity Tier 1 Ratio |
4.5% | 3.5% | na | 3.0% | 11.0% | 12.5% | ||||||||||||||||||
Tier 1 Capital Ratio |
6.0% | 3.5% | na | 3.0% | 12.5% | 14.1% | ||||||||||||||||||
Total Capital Ratio |
8.0% | 3.5% | na | 3.0% | 14.5% | 16.2% | ||||||||||||||||||
TLAC Ratio |
21.5% | na | na | 3.0% | 24.5% | 27.0% | ||||||||||||||||||
Leverage Ratio |
3.0% | na | 0.5% | na | 3.5% | 4.2% | ||||||||||||||||||
TLAC Leverage Ratio |
6.75% | na | 0.5% | na | 7.25% | 8.1% |
(1) | The minimum CET1 Ratio requirement of 4.5% is augmented by a total of 3.5% in Pillar 1 Capital buffers, which can absorb losses during periods of stress. Pillar 1 Capital buffers include a capital conservation buffer of 2.5%, a Common Equity Tier 1 surcharge for D-SIBs of 1.0% and a countercyclical buffer, as prescribed by OSFI (immaterial for the fourth quarter of 2023). If a bank’s capital ratios fall within the range of this combined buffer, restrictions on discretionary distributions of earnings (such as dividends, share repurchases and discretionary compensation) would ensue, with the degree of such restrictions varying according to the position of the bank’s ratios within the buffer range. |
(2) | Breaches of the DSB will not result in a bank being subject to automatic constraints on capital distributions. In the event of a breach, OSFI would require a remediation plan, and would expect for the plan to be executed in a timely manner. Banks may be required to hold additional regulatory capital buffers that are applicable to Capital, Leverage and TLAC Ratios. |
70 |
BMO Financial Group 206th Annual Report 2023 |
B MO Financial Group 206th Annual Report 2023 |
71 |
72 |
BMO Financial Group 206th Annual Report 2023 |
(Canadian $ in millions, except as noted) As at October 31 |
2023 |
2022 | ||||||||||||||||||
Common Equity Tier 1 Capital: Instruments and Reserves |
||||||||||||||||||||
Directly issued qualifying common share capital plus related stock surplus |
23,269 |
18,061 | ||||||||||||||||||
Retained earnings |
44,920 |
45,117 | ||||||||||||||||||
Accumulated other comprehensive income (and other reserves) |
1,862 |
1,552 | ||||||||||||||||||
Goodwill and other intangibles (net of related tax liability) |
(20,899 |
) |
(6,901 | ) | ||||||||||||||||
Other common equity Tier 1 capital deductions |
3,762 |
3,062 | ||||||||||||||||||
Common Equity Tier 1 Capital (CET1) |
52,914 |
60,891 | ||||||||||||||||||
Additional Tier 1 Capital: Instruments |
||||||||||||||||||||
Directly issued qualifying Additional Tier 1 instruments plus related stock surplus |
6,958 |
6,308 | ||||||||||||||||||
Total regulatory adjustments applied to Additional Tier 1 Capital |
(87 |
) |
(78 | ) | ||||||||||||||||
Additional Tier 1 Capital (AT1) |
6,871 |
6,230 | ||||||||||||||||||
Tier 1 Capital (T1 = CET1 + AT1) |
59,785 |
67,121 | ||||||||||||||||||
Tier 2 Capital: Instruments and Provisions |
||||||||||||||||||||
Directly issued qualifying Tier 2 instruments plus related stock surplus |
8,082 |
8,003 | ||||||||||||||||||
General allowance |
902 |
235 | ||||||||||||||||||
Total regulatory adjustments to Tier 2 Capital |
(51 |
) |
(50 | ) | ||||||||||||||||
Tier 2 Capital (T2) |
8,933 |
8,188 | ||||||||||||||||||
Total Capital (TC = T1 + T2) |
68,718 |
75,309 | ||||||||||||||||||
Non-Regulatory Capital Elements of TLAC |
||||||||||||||||||||
Directly issued qualifying Other TLAC instruments |
45,773 |
45,554 | ||||||||||||||||||
Total regulatory adjustments applied to Other TLAC |
(89 |
) |
(200 | ) | ||||||||||||||||
Other TLAC |
45,684 |
45,354 | ||||||||||||||||||
TLAC (TLAC = TC + Other TLAC) |
114,402 |
120,663 | ||||||||||||||||||
Risk-Weighted Assets and Leverage Ratio Exposures |
||||||||||||||||||||
Risk-Weighted Assets |
424,197 |
363,997 | ||||||||||||||||||
Leverage Ratio Exposures |
1,413,036 |
1,189,990 | ||||||||||||||||||
Capital Ratios (%) |
||||||||||||||||||||
Common Equity Tier 1 Ratio |
12.5 |
16.7 | ||||||||||||||||||
Tier 1 Capital Ratio |
14.1 |
18.4 | ||||||||||||||||||
Total Capital Ratio |
16.2 |
20.7 | ||||||||||||||||||
TLAC Ratio |
27.0 |
33.1 | ||||||||||||||||||
Leverage Ratio |
4.2 |
5.6 | ||||||||||||||||||
TLAC Leverage Ratio |
8.1 |
10.1 |
(1) | Calculated in accordance with OSFI’s CAR Guideline and LR Guideline, as applicable. Non-qualifying Additional Tier 1 and Tier 2 Capital instruments were phased out at a rate of 10% per year from January 1, 2013 to January 1, 2022. |
BMO Financial Group 206th Annual Report 2023 | 73 |
2023 |
2022 | |||||||||||||||||||||||||||
RWA |
||||||||||||||||||||||||||||
(Canadian $ in millions) As at October 31 |
Total Exposure |
Average risk weight |
IRB |
|||||||||||||||||||||||||
Standardized |
FIRB |
AIRB |
Total |
Total RWA (5) | ||||||||||||||||||||||||
Credit Risk |
||||||||||||||||||||||||||||
Wholesale |
||||||||||||||||||||||||||||
Corporate, including specialized lending |
406,703 |
44.4% |
36,787 |
71,214 |
72,522 |
180,523 |
137,272 | |||||||||||||||||||||
Corporate small and medium-sized enterprises |
33,830 |
61.7% |
4,830 |
52 |
15,987 |
20,869 |
31,671 | |||||||||||||||||||||
Sovereign |
261,799 |
1.6% |
180 |
– |
3,901 |
4,081 |
4,818 | |||||||||||||||||||||
Bank |
23,111 |
20.9% |
214 |
4,623 |
– |
4,837 |
4,113 | |||||||||||||||||||||
Retail |
||||||||||||||||||||||||||||
Residential mortgages, excluding home equity line of credit |
175,473 |
10.8% |
4,559 |
– |
14,308 |
18,867 |
11,076 | |||||||||||||||||||||
Home equity line of credit |
74,487 |
10.6% |
982 |
– |
6,895 |
7,877 |
5,915 | |||||||||||||||||||||
Qualifying revolving retail |
49,006 |
21.9% |
690 |
– |
10,048 |
10,738 |
7,408 | |||||||||||||||||||||
Other retail, excluding small and medium-sized enterprises |
46,276 |
57.6% |
17,765 |
– |
8,892 |
26,657 |
16,099 | |||||||||||||||||||||
Retail small and medium-sized enterprises |
19,459 |
62.4% |
3,407 |
– |
8,733 |
12,140 |
11,860 | |||||||||||||||||||||
Equity |
11,101 |
131.3% |
14,574 |
– |
– |
14,574 |
11,956 | |||||||||||||||||||||
Trading book |
50,763 |
24.5% |
5,055 |
6,478 |
888 |
12,421 |
11,036 | |||||||||||||||||||||
Securitization |
81,947 |
15.4% |
1,467 |
– |
11,160 |
12,627 |
9,530 | |||||||||||||||||||||
Other credit risk assets – non-counterparty managed assets |
21,091 |
112.1% |
23,641 |
– |
– |
23,641 |
18,580 | |||||||||||||||||||||
Scaling factor for credit risk assets under AIRB Approach (3) |
na |
na |
na |
na |
na |
na |
14,189 | |||||||||||||||||||||
Total Credit Risk |
1,255,046 |
– |
114,151 |
82,367 |
153,334 |
349,852 |
295,524 | |||||||||||||||||||||
Market Risk |
– |
– |
2,131 |
– |
14,850 |
16,981 |
13,522 | |||||||||||||||||||||
Operational Risk |
– |
– |
57,364 |
– |
– |
57,364 |
42,353 | |||||||||||||||||||||
Risk-Weighted Assets before floor |
1,255,046 |
– |
173,646 |
82,367 |
168,184 |
424,197 |
351,399 | |||||||||||||||||||||
Floor adjustment (4) |
– |
– |
– |
– |
– |
– |
12,598 | |||||||||||||||||||||
Total Risk-Weighted Assets |
1,255,046 |
– |
173,646 |
82,367 |
168,184 |
424,197 |
363,997 |
(1) | Exposure and RWA are grouped by the obligor’s asset class. |
(2) | Exposure represents exposure at default (EAD) after the application of credit risk mitigation and the credit conversion factor for undrawn exposures. |
(3) | In fiscal 2022, RWA amounts for credit risk under the Advanced Internal Ratings Based (AIRB) Approach were subject to a 6% scaling factor. This scaling factor is no longer effective as of the second quarter of fiscal 2023, following the implementation of Basel III Reforms. |
(4) | The bank is subject to capital floor requirements as prescribed in OSFI’s CAR Guideline. Total RWA is increased by a floor adjustment amount, which is calculated based on the standardized methodology. The capital floor was not operative at October 31, 2023. |
(5) | Prior periods have been reclassified to conform with the current period’s presentation. |
74 |
BMO Financial Group 206th Annual Report 2023 |
As at October 31, 2023 | Issuance or redemption date |
Number of shares (in millions) |
Balance (Canadian $ in millions, except as noted) |
|||||||||
Common shares issued |
43.8 | $ | 5,197 | |||||||||
Tier 1 Capital |
||||||||||||
Issuance of Non-Cumulative 5-Year Fixed Rate ResetClass B Preferred Shares, Series 52 |
January 31, 2023 | 0.65 | $ | 650 | ||||||||
Tier 2 Capital |
||||||||||||
Issuance of Medium-Term Notes, Series M, First Tranche |
September 7, 2023 | $ | 1,150 | |||||||||
Redemption of U.S. 4.338% Subordinated Notes |
October 5, 2023 | USD | 850 |
Number of shares or dollar amount (in millions) |
Dividends declared per share | |||||||||||
As at October 31 | 2023 |
2022 | ||||||||||
Common shares |
721 | $ |
5.80 |
$ | 5.44 | |||||||
Class B Preferred shares |
||||||||||||
Series 27* |
$ | 500 | $ |
0.96 |
$ | 0.96 | ||||||
Series 29* |
$ | 400 | $ |
0.91 |
$ | 0.91 | ||||||
Series 31* |
$ | 300 | $ |
0.96 |
$ | 0.96 | ||||||
Series 33* |
$ | 200 | $ |
0.76 |
$ | 0.76 | ||||||
Series 44* |
$ | 400 | $ |
1.21 |
$ | 1.21 | ||||||
Series 46* |
$ | 350 | $ |
1.28 |
$ | 1.28 | ||||||
Series 50* |
$ | 500 | $ |
73.73 |
$ | 24.64 | ||||||
Series 52* |
$ | 650 | $ |
57.52 |
– | |||||||
Additional Tier 1 Capital Notes* |
||||||||||||
4.800% Additional Tier 1 Capital Notes |
US$ | 500 | na |
na | ||||||||
4.300% Limited Recourse Capital Notes, Series 1 (1) |
$ | 1,250 | na |
na | ||||||||
5.625% Limited Recourse Capital Notes, Series 2 (1) |
$ | 750 | na |
na | ||||||||
7.325% Limited Recourse Capital Notes, Series 3 (1) |
$ | 1,000 | na |
na | ||||||||
Medium-Term Notes* (2) |
||||||||||||
3.803% Subordinated Notes |
US$ | 1,250 | na |
na | ||||||||
Series J – First Tranche |
$ | 1,000 | na |
na | ||||||||
Series J – Second Tranche |
$ | 1,250 | na |
na | ||||||||
Series K – First Tranche |
$ | 1,000 | na |
na | ||||||||
3.088% Subordinated Notes |
US$ | 1,250 | na |
na | ||||||||
Series L – First Tranche |
$ | 750 | na |
na | ||||||||
Series M – First Tranche |
$ | 1,150 | na |
na | ||||||||
Stock options |
||||||||||||
Vested |
2.8 | |||||||||||
Non-vested |
3.6 |
* | Convertible into common shares. |
(1) | Convertible into common shares by virtue of recourse to the Preferred Shares Series 48, Preferred Shares Series 49 and Preferred Shares Series 51, respectively. Refer to Note 16 of the audited annual consolidated financial statements for conversion details. |
(2) | Note 15 of the audited annual consolidated financial statements includes details on the NVCC Medium-Term Notes. |
BMO Financial Group 206th Annual Report 2023 | 75 |
76 |
BMO Financial Group 206th Annual Report 2023 |
BMO Financial Group 206th Annual Report 2023 |
77 |
78 |
||||||
82 |
||||||
87 |
||||||
95 |
||||||
100 |
||||||
100 |
78 |
BMO Financial Group 206th Annual Report 2023 |
BMO Financial Group 206th Annual Report 2023 |
79 |
80 |
BMO Financial Group 206th Annual Report 2023 |
BMO Financial Group 206th Annual Report 2023 | 81 |
82 |
BMO Financial Group 206th Annual Report 2023 |
BMO Financial Group 206th Annual Report 2023 | 83 |
• |
Understand and Manage |
• |
Protect BMO’s Reputation |
• |
Diversify. Limit Tail Risk low-probability, high-impact events. |
• |
Maintain Strong Capital and Liquidity |
• |
Optimize Risk Return |
• |
Credit and Counterparty Risk |
• |
Market Risk |
• |
Insurance Risk |
• |
Liquidity and Funding Risk |
• |
Operational Non-Financial Risknon-financial risks that may have financial consequences. |
• |
Operating groups and Corporate Services, which includes Technology and Operations, serve as our first line of defence. They are accountable for the risks arising from their businesses, operations and exposures. They are expected to pursue business opportunities within their established risk appetite and to identify, assess, manage (which includes mitigation), monitor and report on all risks in, or arising from, their businesses, operations and exposures. The first line fulfils its responsibilities by applying risk management and reporting methodologies, by establishing appropriate internal controls in accordance with the ERMF, and by monitoring the effectiveness of such controls. These processes and controls serve as the framework for our lines of business to act within their delegated risk-taking authority and risk limits, as set out in corporate policies and the Risk Appetite Framework. Corporate Services, while part of our first line of defence, may also serve in a governance capacity when specific roles and responsibilities are assigned to individuals or groups under the Enterprise Policy Framework. |
• |
The second line of defence comprises ERPM and Legal & Regulatory Compliance. The second line exercises independent oversight, performs effective challenge and provides independent assessment of risks and risk management practices, including transaction, product and portfolio risk |
84 |
BMO Financial Group 206th Annual Report 2023 |
management decisions, processes and controls applied in the first line of defence. The second line establishes enterprise-wide risk management policies, infrastructure, processes, methodologies and practices that the first and second lines use to identify, assess, manage (which includes mitigation), monitor and report on risks across the enterprise. |
• |
Corporate Audit Division is the third line of defence. It provides an independent assessment of the effectiveness of internal controls across the enterprise, including controls that support the risk management and governance processes. |
• |
Portfolio transactions |
• |
Structured transactions |
• |
Investment initiatives |
• |
New products and services |
BMO Financial Group 206th Annual Report 2023 | 85 |
• |
Tone from the Top: |
• |
Accountability: three-lines-of-defence |
• |
Effective Communication and Challenge: |
• |
Incentives: |
86 |
BMO Financial Group 206th Annual Report 2023 |
BMO Financial Group 206th Annual Report 2023 |
87 |
88 |
BMO Financial Group 206th Annual Report 2023 |
• |
Exposure at Default (EAD) |
• |
Loss Given Default (LGD) |
• |
Probability of Default (PD) one-year time horizon. |
• |
Expected Loss (EL) |
(Canadian $ in millions) |
Drawn (3) (7) |
Commitments (undrawn) (3) (8) |
Other off-balance sheet items (3) (9) |
OTC derivatives (4) (10) |
Repo-style transactions (4) (5) (11) |
Total (1) |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2023 |
2022 |
2023 |
2022 |
2023 |
2022 |
2023 |
2022 |
2023 |
2022 |
2023 |
2022 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Individual |
– |
– |
– |
– |
– |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial institutions |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Governments |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Manufacturing |
– |
– |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real estate |
– |
– |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retail trade |
– |
– |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Service industries |
– |
– |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Wholesale trade |
– |
– |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Oil and gas |
– |
– |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Utilities |
– |
– |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Others (2) |
– |
– |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total exposure at default (6) |
(1) |
Credit exposure excluding equity, securitization and other assets, such as non-significant investments, goodwill, deferred tax assets and intangibles. |
(2) |
Includes remaining industries that individually comprise less than |
(3) |
Represents gross credit exposures without accounting for collateral. |
(4) |
Credit exposure at default is inclusive of collateral. |
(5) |
Repo-style transactions include repos, reverse repos and securities lending transactions, which represent both asset and liability exposures. The impact of collateral on the credit exposure for repo-style transactions is |
(6) |
Excludes exposures arising from derivative and repo-style transactions that are cleared through a clearing house or totalling $a central counterparty |
(7) |
Drawn exposures include loans, acceptances, deposits with regulated financial institutions and certain securities. |
(8) |
Undrawn commitments cover all unutilized authorizations associated with the drawn exposures noted above, including any authorizations that are unconditionally cancellable. EAD for undrawn commitments is model-generated, based on internal empirical data. |
(9) |
Other off-balance sheet exposures include items such as guarantees, standby letters of credit and documentary credits. |
(10) |
Over-the-counter (OTC) derivatives are those in proprietary accounts that result in exposure to credit risk in addition to market risk. EAD for OTC derivatives is calculated inclusive of collateral. |
(11) |
EAD for repo-style transactions is the calculated exposure, net of collateral. |
BMO Financial Group 206th Annual Report 2023 |
89 |
Risk profile | Probability of default band | |
Exceptionally low |
≤ 0.05% | |
Very low |
> 0.05% to 0.20% | |
Low |
> 0.20% to 0.75% | |
Medium |
> 0.75% to 7.00% | |
High |
> 7.00% to 99.99% | |
Default |
100% |
BMO rating |
Moody’s Investors Service implied equivalent |
Standard & Poor’s implied equivalent | ||
Acceptable |
||||
I-1 to I-7 |
Aaa to Baa3 |
AAA to BBB- | ||
S-1 to S-4 |
Ba1 to B1 |
BB+ to B+ | ||
Watchlist |
||||
P-1 to P-3 |
B2 to Ca |
B to CC | ||
Default/Impaired |
||||
D-1 to D-4 |
C |
C to D |
90 |
BMO Financial Group 206th Annual Report 2023 |
(Canadian $ in millions) |
Residential mortgages |
Amortizing home equity lines of credit |
Total amortizing real estate secured lending |
Non-amortizing real estate secured lending |
Total Canadian real estate secured lending |
|||||||||||||||
As at October 31, 2023 |
150,575 |
35,741 |
186,316 |
12,982 |
199,298 |
|||||||||||||||
As at October 31, 2022 |
139,394 |
34,083 |
173,477 |
13,219 |
186,696 |
BMO Financial Group 206th Annual Report 2023 |
91 |
As at October 31, 2023 |
As at October 31, 2022 |
|||||||||||||||||||||||||||||||||||||||||||
(Canadian $ in millions, except as noted) |
Outstanding balances |
For the 12 months ended |
Outstanding balances |
For the 12 months ended |
||||||||||||||||||||||||||||||||||||||||
Region (2) |
Insured |
Uninsured |
Total |
% of total |
Average LTV uninsured |
Insured (3) |
Uninsured |
Total |
% of total |
Average LTV uninsured (4) |
||||||||||||||||||||||||||||||||||
Atlantic |
3,347 |
3,452 |
6,799 |
3.8% |
71% |
3,197 |
3,255 |
6,452 |
4.3% |
72% |
||||||||||||||||||||||||||||||||||
Quebec |
9,242 |
12,903 |
22,145 |
12.5% |
71% |
8,892 |
12,156 |
21,048 |
14.2% |
72% |
||||||||||||||||||||||||||||||||||
Ontario |
14,643 |
56,798 |
71,441 |
40.3% |
70% |
14,411 |
49,664 |
64,075 |
43% |
70% |
||||||||||||||||||||||||||||||||||
Alberta |
9,885 |
7,302 |
17,187 |
9.7% |
73% |
9,552 |
6,854 |
16,406 |
11% |
74% |
||||||||||||||||||||||||||||||||||
British Columbia |
4,746 |
24,391 |
29,137 |
16.5% |
67% |
4,680 |
22,919 |
27,599 |
18.5% |
68% |
||||||||||||||||||||||||||||||||||
All other Canada |
2,264 |
1,602 |
3,866 |
2.2% |
73% |
2,179 |
1,635 |
3,814 |
2.6% |
73% |
||||||||||||||||||||||||||||||||||
Total Canada |
44,127 |
106,448 |
150,575 |
85.0% |
70% |
42,911 |
96,483 |
139,394 |
93.6% |
70% |
||||||||||||||||||||||||||||||||||
United States |
68 |
26,607 |
26,675 |
15.0% |
77% |
16 |
9,470 |
9,486 |
6.4% |
72% |
||||||||||||||||||||||||||||||||||
Total |
44,195 |
133,055 |
177,250 |
100% |
71% |
42,927 |
105,953 |
148,880 |
100% |
71% |
As at October 31, 2023 |
As at October 31, 2022 |
|||||||||||||||||||||||||||||||||||||||||||
(Canadian $ in millions, except as noted) |
Portfolio |
For the 12 months ended |
Portfolio |
For the 12 months ended |
||||||||||||||||||||||||||||||||||||||||
Region (2) |
Outstanding balances |
% |
Authorizations |
% |
Average LTV |
Outstanding balances |
% |
Authorizations |
% |
Average LTV (4) |
||||||||||||||||||||||||||||||||||
Atlantic |
996 |
1.8% |
1,922 |
1.7% |
60% |
967 |
1.9% |
1,835 |
1.9% |
64% |
||||||||||||||||||||||||||||||||||
Quebec |
9,149 |
16.6% |
18,071 |
15.9% |
67% |
8,897 |
17.6% |
17,085 |
17.4% |
71% |
||||||||||||||||||||||||||||||||||
Ontario |
24,601 |
44.6% |
45,351 |
40.0% |
59% |
23,647 |
46.8% |
43,063 |
43.9% |
63% |
||||||||||||||||||||||||||||||||||
Alberta |
3,203 |
5.8% |
6,970 |
6.2% |
62% |
3,232 |
6.4% |
6,835 |
6.9% |
66% |
||||||||||||||||||||||||||||||||||
British Columbia |
10,029 |
18.2% |
18,899 |
16.7% |
59% |
9,826 |
19.5% |
17,953 |
18.3% |
61% |
||||||||||||||||||||||||||||||||||
All other Canada |
745 |
1.3% |
1,474 |
1.3% |
66% |
733 |
1.5% |
1,443 |
1.5% |
67% |
||||||||||||||||||||||||||||||||||
Total Canada |
48,723 |
88.3% |
92,687 |
81.8% |
61% |
47,302 |
93.7% |
88,214 |
89.9% |
64% |
||||||||||||||||||||||||||||||||||
United States |
6,471 |
11.7% |
20,615 |
18.2% |
60% |
3,196 |
6.3% |
9,902 |
10.1% |
64% |
||||||||||||||||||||||||||||||||||
Total |
55,194 |
100% |
113,302 |
100% |
61% |
50,498 |
100% |
98,116 |
100% |
64% |
(1) |
Reporting methodologies are in accordance with OSFI’s Residential Mortgage Underwriting Practices and Procedures (B-20) Guideline. |
(2) |
Region is based upon address of the property mortgaged. |
(3) | Portfolio insured mortgages are defined as mortgages that are insured individually or in bulk through an eligible insurer (i.e., CMHC, Sagen MI Canada ™ ). |
(4) |
Loan-to-value |
Amortization period |
||||||||||||||||||||||||||||||||
As at October 31, 2023 |
< 5 years |
6-10 years |
11-15 years |
16-20 years |
21-25 years |
26-30 years |
31-35 years |
> 35 years |
||||||||||||||||||||||||
Canada (3) |
0.7% |
2.5% |
6.1% |
13.6% |
32.1% |
18.0% |
2.1% |
24.9% |
||||||||||||||||||||||||
United States (4) |
0.5% |
2.2% |
5.3% |
2.8% |
10.4% |
78.6% |
0.1% |
0.1% |
||||||||||||||||||||||||
Total |
0.7% |
2.5% |
5.9% |
12.0% |
28.8% |
27.1% |
1.8% |
21.2% |
||||||||||||||||||||||||
Amortization period |
||||||||||||||||||||||||||||||||
As at October 31, 2022 |
< 5 years |
6-10 years |
11-15 years |
16-20 years |
21-25 years |
26-30 years |
31-35 years |
> 35 years |
||||||||||||||||||||||||
Canada (3) |
0.8% |
2.6% |
5.7% |
13.5% |
32.3% |
13.8% |
3.4% |
27.9% |
||||||||||||||||||||||||
United States (4) |
0.7% |
4.9% |
9.9% |
4.9% |
14.3% |
65.0% |
0.1% |
0.2% |
||||||||||||||||||||||||
Total |
0.8% |
2.7% |
6.0% |
13.0% |
31.1% |
17.1% |
3.2% |
26.1% |
(1) |
In Canada, the remaining amortization is based on the current balance, interest rate, customer payment amount and payment frequency. Contractual payment schedule is used in the United States. |
(2) |
Reporting methodologies are in accordance with OSFI’s B-20 guideline. |
(3) |
As a result of increases in interest rates, the portfolio included $29.9 billion ($22.3 billion as at October 31, 2022) of variable-rate mortgages in negative amortization, with all of the contractual payments currently being applied to interest, and the portion of interest due that is not met by each payment is added to the principal. |
(4) |
A large proportion of U.S.-based mortgages in the longer-amortization band are primarily associated with modification programs for troubled borrowers and regulator-initiated mortgage refinancing programs. |
92 |
BMO Financial Group 206th Annual Report 2023 |
(Canadian $ in millions, except as noted) For the year ended October 31 |
2023 |
2022 |
||||||
GIL, beginning of year |
1,991 |
2,169 |
||||||
Classified as impaired during the year |
4,047 |
1,635 |
||||||
Purchased credit impaired during the year |
415 |
– |
||||||
Transferred to not impaired during the year |
(545 |
) |
(659 |
) | ||||
Net repayments |
(1,214 |
) |
(819 |
) | ||||
Amounts written off |
(753 |
) |
(363 |
) | ||||
Recoveries of loans and advances previously written off |
– |
– |
||||||
Disposals of loans |
(24 |
) |
(54 |
) | ||||
Foreign exchange and other movements |
43 |
82 |
||||||
GIL, end of year |
3,960 |
1,991 |
||||||
GIL as a % of gross loans and acceptances |
0.59 |
0.35 |
BMO Financial Group 206th Annual Report 2023 |
93 |
As at October 31, 2023 |
As at October 31, 2022 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Canadian $ in millions) |
Funded lending and commitments |
Securities |
Repo-style transactions and derivatives |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Region |
Bank |
Corporate |
Sovereign |
Total |
Bank |
Corporate |
Sovereign |
Total |
Bank |
Corporate |
Sovereign |
Total |
Total net exposure |
Total net exposure |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Europe (excluding United Kingdom) |
641 |
2,978 |
– |
3,619 |
495 |
214 |
6,423 |
7,132 |
377 |
124 |
29 |
530 |
11,281 |
11,817 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
United Kingdom |
21 |
4,204 |
370 |
4,595 |
102 |
100 |
770 |
972 |
105 |
457 |
6 |
568 |
6,135 |
7,095 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Latin America |
2,978 |
6,922 |
– |
9,900 |
1 |
118 |
– |
119 |
13 |
238 |
– |
251 |
10,270 |
9,285 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asia-Pacific |
3,874 |
3,173 |
148 |
7,195 |
782 |
107 |
3,641 |
4,530 |
229 |
270 |
65 |
564 |
12,289 |
13,706 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Middle East and Africa |
782 |
437 |
105 |
1,324 |
– |
4 |
28 |
32 |
12 |
28 |
1,075 |
1,115 |
2,471 |
2,303 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other (1) |
– |
5 |
51 |
56 |
6 |
– |
3,681 |
3,687 |
– |
– |
1,832 |
1,832 |
5,575 |
5,902 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total |
8,296 |
17,719 |
674 |
26,689 |
1,386 |
543 |
14,543 |
16,472 |
736 |
1,117 |
3,007 |
4,860 |
48,021 |
50,108 |
(1) |
Primarily exposure to supranational entities. |
(Canadian $ in millions) |
Non-centrally cleared |
Centrally cleared |
Total |
|||||||||||||||||||||||||||||
As at October 31 |
2023 |
2022 |
2023 |
2022 |
2023 |
2022 |
||||||||||||||||||||||||||
Interest Rate Contracts |
||||||||||||||||||||||||||||||||
Swaps |
413,856 |
420,700 |
9,197,174 |
5,534,061 |
9,611,030 |
5,954,761 |
||||||||||||||||||||||||||
Forward rate agreements |
5,439 |
3,929 |
127,214 |
18,468 |
132,653 |
22,397 |
||||||||||||||||||||||||||
Purchased options |
130,000 |
98,113 |
– |
– |
130,000 |
98,113 |
||||||||||||||||||||||||||
Written options |
118,524 |
87,941 |
– |
– |
118,524 |
87,941 |
||||||||||||||||||||||||||
Total interest rate contracts |
667,819 |
610,683 |
9,324,388 |
5,552,529 |
9,992,207 |
6,163,212 |
||||||||||||||||||||||||||
Foreign Exchange Contracts |
||||||||||||||||||||||||||||||||
Cross-currency swaps |
95,932 |
119,976 |
– |
– |
95,932 |
119,976 |
||||||||||||||||||||||||||
Cross-currency interest rate swaps |
685,022 |
582,092 |
– |
– |
685,022 |
582,092 |
||||||||||||||||||||||||||
Forward foreign exchange contracts |
555,031 |
469,503 |
9,335 |
12,270 |
564,366 |
481,773 |
||||||||||||||||||||||||||
Purchased options |
51,143 |
72,733 |
– |
– |
51,143 |
72,733 |
||||||||||||||||||||||||||
Written options |
55,370 |
74,041 |
– |
– |
55,370 |
74,041 |
||||||||||||||||||||||||||
Total foreign exchange contracts |
1,442,498 |
1,318,345 |
9,335 |
12,270 |
1,451,833 |
1,330,615 |
||||||||||||||||||||||||||
Commodity Contracts |
||||||||||||||||||||||||||||||||
Swaps |
18,573 |
24,487 |
1 |
38 |
18,574 |
24,525 |
||||||||||||||||||||||||||
Purchased options |
5,319 |
5,686 |
– |
– |
5,319 |
5,686 |
||||||||||||||||||||||||||
Written options |
4,218 |
5,011 |
– |
– |
4,218 |
5,011 |
||||||||||||||||||||||||||
Total commodity contracts |
28,110 |
35,184 |
1 |
38 |
28,111 |
35,222 |
||||||||||||||||||||||||||
Equity Contracts |
116,011 |
105,280 |
129 |
– |
116,140 |
105,280 |
||||||||||||||||||||||||||
Credit Default Swaps |
||||||||||||||||||||||||||||||||
Purchased |
1,705 |
1,496 |
15,222 |
15,275 |
16,927 |
16,771 |
||||||||||||||||||||||||||
Written |
1,080 |
962 |
8,930 |
10,137 |
10,010 |
11,099 |
||||||||||||||||||||||||||
Total credit default swaps |
2,785 |
2,458 |
24,152 |
25,412 |
26,937 |
27,870 |
||||||||||||||||||||||||||
Total |
2,257,223 |
2,071,950 |
9,358,005 |
5,590,249 |
11,615,228 |
7,662,199 |
94 |
BMO Financial Group 206th Annual Report 2023 |
BMO Financial Group 206th Annual Report 2023 |
95 |
As at or for the year ended October 31 (Pre-tax Canadian $ equivalent in millions) |
2023 |
2022 |
||||||||||||||||||||||||||||||||||
Year-end |
Average |
High |
Low |
Year-end |
Average |
High |
Low |
|||||||||||||||||||||||||||||
Commodity VaR |
||||||||||||||||||||||||||||||||||||
Equity VaR |
||||||||||||||||||||||||||||||||||||
Foreign exchange VaR |
||||||||||||||||||||||||||||||||||||
Interest rate VaR (2) |
||||||||||||||||||||||||||||||||||||
Debt-specific risk |
||||||||||||||||||||||||||||||||||||
Diversification |
( |
) |
( |
) |
nm |
nm |
( |
) |
( |
) |
nm |
nm |
||||||||||||||||||||||||
Total Trading VaR |
(1) |
One-day measure using a 99% confidence interval. Gains are presented in brackets and losses are presented as positive numbers. |
(2) |
Interest rate VaR includes general credit spread risk. |
96 |
BMO Financial Group 206th Annual Report 2023 |
BMO Financial Group 206th Annual Report 2023 |
97 |
Economic value sensitivity |
Earnings sensitivity |
|||||||||||||||||||||||||||||||||||
(Pre-tax Canadian $ equivalent in millions) |
October 31, 2023 |
October 31, 2022 |
October 31, 2023 |
October 31, 2022 |
||||||||||||||||||||||||||||||||
Canada |
United States |
Total |
Total |
Canada |
United States |
Total |
Total |
|||||||||||||||||||||||||||||
100 basis point increase |
( |
) |
( |
) |
( |
) |
( |
) |
||||||||||||||||||||||||||||
100 basis point decrease |
( |
) |
( |
) |
( |
) |
( |
) |
(1) |
Losses are presented in brackets and gains are presented as positive numbers. |
(2) |
Includes Canadian dollar and other currencies. |
(Canadian $ in millions) |
2023 |
2022 |
||||||
Fixed rate (1) |
||||||||
Contractual amounts that will reprice/repay within 3 months |
213,667 |
147,232 |
||||||
Contractual amounts that will reprice/repay after 3 months |
248,688 |
181,694 |
||||||
Floating rate (2) |
186,327 |
215,625 |
||||||
Non-rate sensitive (3) |
15,907 |
20,023 |
||||||
Total |
664,589 |
564,574 |
(1) | Includes index-based loans. |
(2) | Floating rate only includes loans that reprice immediately upon a change in interest rates. |
(3) | Includes credit card balances that are paid when due, customers’ liability under acceptances, impaired loans and allowance for credit losses. |
98 |
BMO Financial Group 206th Annual Report 2023 |
As at October 31, 2023 |
As at October 31, 2022 |
|||||||||||||||||||||||||||||||||||||||
Subject to market risk |
Subject to market risk |
Primary risk factors for non-traded risk balances |
||||||||||||||||||||||||||||||||||||||
(Canadian $ in millions) |
Consolidated Balance Sheet |
Traded risk |
Non-traded risk |
Not subject to market risk |
Consolidated Balance Sheet |
Traded risk (1) |
Non-traded risk (2) |
Not subject to market risk |
||||||||||||||||||||||||||||||||
Assets Subject to Market Risk |
||||||||||||||||||||||||||||||||||||||||
Cash and cash equivalents |
77,934 |
– |
77,934 |
– |
87,466 |
– |
87,466 |
– |
Interest rate |
|||||||||||||||||||||||||||||||
Interest bearing deposits with banks |
4,125 |
237 |
3,888 |
– |
5,734 |
142 |
5,592 |
– |
Interest rate |
|||||||||||||||||||||||||||||||
Securities |
322,379 |
124,620 |
197,759 |
– |
273,262 |
108,303 |
164,959 |
– |
Interest rate, credit spread, equity |
|||||||||||||||||||||||||||||||
Securities borrowed or purchased under resale agreements |
115,662 |
– |
115,662 |
– |
113,194 |
– |
113,194 |
– |
Interest rate |
|||||||||||||||||||||||||||||||
Loans and acceptances (net of allowance for credit losses) |
656,478 |
4,412 |
652,066 |
– |
551,339 |
3,501 |
547,838 |
– |
Interest rate, foreign exchange |
|||||||||||||||||||||||||||||||
Derivative instruments |
39,976 |
34,004 |
5,972 |
– |
48,160 |
45,537 |
2,623 |
– |
Interest rate, foreign exchange |
|||||||||||||||||||||||||||||||
Customers’ liabilities under acceptances |
8,111 |
– |
8,111 |
– |
13,235 |
– |
13,235 |
– |
Interest rate |
|||||||||||||||||||||||||||||||
Other assets |
68,611 |
4,734 |
27,385 |
36,492 |
46,809 |
3,030 |
26,561 |
17,218 |
Interest rate |
|||||||||||||||||||||||||||||||
Total Assets |
1,293,276 |
168,007 |
1,088,777 |
36,492 |
1,139,199 |
160,513 |
961,468 |
17,218 |
||||||||||||||||||||||||||||||||
Liabilities Subject to Market Risk |
||||||||||||||||||||||||||||||||||||||||
Deposits |
909,676 |
35,300 |
874,376 |
– |
769,478 |
26,305 |
743,173 |
– |
Interest rate, foreign exchange |
|||||||||||||||||||||||||||||||
Derivative instruments |
50,193 |
43,166 |
7,027 |
– |
59,956 |
46,803 |
13,153 |
– |
Interest rate, foreign exchange |
|||||||||||||||||||||||||||||||
Acceptances |
8,111 |
– |
8,111 |
– |
13,235 |
– |
13,235 |
– |
Interest rate |
|||||||||||||||||||||||||||||||
Securities sold but not yet purchased |
43,781 |
43,781 |
– |
– |
40,979 |
40,979 |
– |
– |
Interest rate |
|||||||||||||||||||||||||||||||
Securities lent or sold under repurchase agreements |
106,108 |
– |
106,108 |
– |
103,963 |
– |
103,963 |
– |
Interest rate |
|||||||||||||||||||||||||||||||
Other liabilities |
90,142 |
33 |
90,049 |
60 |
72,400 |
60 |
71,815 |
525 |
Interest rate |
|||||||||||||||||||||||||||||||
Subordinated debt |
8,228 |
– |
8,228 |
– |
8,150 |
– |
8,150 |
– |
Interest rate |
|||||||||||||||||||||||||||||||
Total Liabilities |
1,216,239 |
122,280 |
1,093,899 |
60 |
1,068,161 |
114,147 |
953,489 |
525 |
(1) |
Primarily comprises balance sheet items that are subject to the trading and underwriting risk management framework and recorded at fair value through profit or loss. |
(2) |
Primarily comprises balance sheet items that are subject to the structural balance sheet insurance risk management framework and secured financing transactions. |
BMO Financial Group 206th Annual Report 2023 |
99 |
• |
Claims risk – the risk that the actual magnitude or frequency of claims will differ from those assumed in the pricing or underwriting process, including mortality risk, morbidity risk, longevity risk and catastrophic risk; |
• |
Policyholder behaviour risk – the risk that the behaviour of policyholders in regard to premium payments, withdrawals or loans, as well as policy lapses and surrenders and other voluntary terminations, will differ from the behaviour assumed in the pricing process; and |
• |
Expense risk – the risk that actual expenses arising from acquiring and administering policies and processing claims will exceed the expenses assumed in the pricing process. |
100 |
BMO Financial Group 206th Annual Report 2023 |
BMO Financial Group 206th Annual Report 2023 |
101 |
As at October 31, 2023 |
As at October 31, 2022 |
|||||||||||||||||||||||||||
(Canadian $ in millions) |
Bank-owned assets |
Other cash and securities received |
Total gross assets |
Encumbered assets |
Net unencumbered assets |
Net unencumbered assets (2) |
||||||||||||||||||||||
Cash and cash equivalents |
77,934 |
– |
77,934 |
125 |
77,809 |
87,379 |
||||||||||||||||||||||
Deposits with other banks |
4,125 |
– |
4,125 |
– |
4,125 |
5,734 |
||||||||||||||||||||||
Securities and securities borrowed or purchased under resale agreements |
||||||||||||||||||||||||||||
Sovereigns / Central banks / Multilateral development banks |
155,249 |
107,854 |
263,103 |
141,176 |
121,927 |
111,940 |
||||||||||||||||||||||
NHA mortgage-backed securities and U.S. agency mortgage-backed securities and collateralized mortgage obligations |
87,244 |
8,875 |
96,119 |
39,390 |
56,729 |
39,978 |
||||||||||||||||||||||
Corporate and other debt |
24,783 |
20,368 |
45,151 |
8,683 |
36,468 |
33,698 |
||||||||||||||||||||||
Corporate equity |
55,103 |
54,051 |
109,154 |
65,501 |
43,653 |
39,966 |
||||||||||||||||||||||
Total securities and securities borrowed or purchased under resale agreements |
322,379 |
191,148 |
513,527 |
254,750 |
258,777 |
225,582 |
||||||||||||||||||||||
NHA mortgage-backed securities (reported as loans at amortized cost) (3) |
23,983 |
– |
23,983 |
4,481 |
19,502 |
16,604 |
||||||||||||||||||||||
Total liquid assets |
428,421 |
191,148 |
619,569 |
259,356 |
360,213 |
335,299 |
(1) |
Gross assets include bank-owned assets and cash and securities received from third parties. |
(2) |
Net unencumbered liquid assets are defined as total gross assets less encumbered assets. |
(3) |
Under IFRS, National Housing Act (NHA) mortgage-backed securities that include mortgages owned by BMO as the underlying collateral are classified as loans. Unencumbered NHA mortgage-backed securities have liquidity value and are included as liquid assets under BMO’s Liquidity and Funding Risk Management Framework. This amount is shown as a separate line item, NHA mortgage-backed securities. |
Encumbered |
Net unencumbered |
|||||||||||||||||||
(Canadian $ in millions) As at October 31, 2023 |
Total gross assets |
Pledged as collateral |
Other encumbered |
Other unencumbered |
Available as collateral |
|||||||||||||||
Cash and deposits with other banks |
82,059 |
– |
125 |
– |
81,934 |
|||||||||||||||
Securities (5) |
537,510 |
209,091 |
50,140 |
16,061 |
262,218 |
|||||||||||||||
Loans |
632,495 |
93,931 |
511 |
342,211 |
195,842 |
|||||||||||||||
Other assets |
||||||||||||||||||||
Derivative instruments |
39,976 |
– |
– |
39,976 |
– |
|||||||||||||||
Customers’ liability under acceptances |
8,111 |
– |
– |
8,111 |
– |
|||||||||||||||
Premises and equipment |
6,241 |
– |
– |
6,241 |
– |
|||||||||||||||
Goodwill |
16,728 |
– |
– |
16,728 |
– |
|||||||||||||||
Intangible assets |
5,216 |
– |
– |
5,216 |
– |
|||||||||||||||
Current tax assets |
2,052 |
– |
– |
2,052 |
– |
|||||||||||||||
Deferred tax assets |
3,081 |
– |
– |
3,081 |
– |
|||||||||||||||
Other |
35,293 |
10,596 |
– |
24,697 |
– |
|||||||||||||||
Total other assets |
116,698 |
10,596 |
– |
106,102 |
– |
|||||||||||||||
Total assets |
1,368,762 |
313,618 |
50,776 |
464,374 |
539,994 |
|||||||||||||||
Encumbered (2) |
Net unencumbered |
|||||||||||||||||||
(Canadian $ in millions) As at October 31, 2022 |
Total gross assets (1) |
Pledged as collateral |
Other encumbered |
Other unencumbered (3) |
Available as collateral (4) |
|||||||||||||||
Cash and deposits with other banks |
93,200 |
– |
87 |
– |
93,113 |
|||||||||||||||
Securities (5) |
472,443 |
183,275 |
46,982 |
12,620 |
229,566 |
|||||||||||||||
Loans |
529,458 |
71,139 |
656 |
299,358 |
158,305 |
|||||||||||||||
Other assets |
||||||||||||||||||||
Derivative instruments |
48,160 |
– |
– |
48,160 |
– |
|||||||||||||||
Customers’ liability under acceptances |
13,235 |
– |
– |
13,235 |
– |
|||||||||||||||
Premises and equipment |
4,841 |
– |
– |
4,841 |
– |
|||||||||||||||
Goodwill |
5,285 |
– |
– |
5,285 |
– |
|||||||||||||||
Intangible assets |
2,193 |
– |
– |
2,193 |
– |
|||||||||||||||
Current tax assets |
1,421 |
– |
– |
1,421 |
– |
|||||||||||||||
Deferred tax assets |
1,175 |
– |
– |
1,175 |
– |
|||||||||||||||
Other |
31,894 |
13,991 |
– |
17,903 |
– |
|||||||||||||||
Total other assets |
108,204 |
13,991 |
– |
94,213 |
– |
|||||||||||||||
Total assets |
1,203,305 |
268,405 |
47,725 |
406,191 |
480,984 |
(1) |
Gross assets include on-balance sheet and off-balance sheet assets. |
(2) |
Pledged as collateral refers to the portion of on-balance sheet assets and other cash and securities that is pledged through repurchase agreements, securities lending, derivative contracts, minimum required deposits at central banks, and requirements associated with participation in clearing houses and payment systems. Other encumbered assets include assets that are restricted for legal or other reasons, such as restricted cash and short sales. |
(3) |
Other unencumbered assets include select liquid asset holdings that management believes are not readily available to support BMO’s liquidity requirements. These include securities of $16.1 billion as at October 31, 2023, which include securities held at BMO’s insurance subsidiary, significant equity investments and certain investments held at BMO’s merchant banking business. Other unencumbered assets include mortgages and loans that may be securitized to access secured funding. |
(4) |
Loans included in available as collateral represent loans currently lodged at central banks that may be used to access central bank funding. Loans available for pledging as collateral do not include other sources of additional liquidity that may be realized from BMO’s loan portfolio, such as incremental securitization, covered bond issuances and U.S. Federal Home Loan Bank (FHLB) advances. |
(5) |
Includes securities, securities borrowed or purchased under resale agreements and NHA mortgage-backed securities (reported as loans at amortized cost). |
102 |
BMO Financial Group 206th Annual Report 2023 |
As at October 31, 2023 |
As at October 31, 2022 |
|||||||||||||||||||||||||||||||||||
(Canadian $ in millions) |
Less than 1 month |
1 to 3 months |
3 to 6 months |
6 to 12 months |
Subtotal less than 1 year |
1 to 2 years |
Over 2 years |
Total |
Total |
|||||||||||||||||||||||||||
Deposits from banks |
4,374 |
1,660 |
753 |
927 |
7,714 |
– |
– |
7,714 |
9,550 |
|||||||||||||||||||||||||||
Certificates of deposit and commercial paper |
12,932 |
27,334 |
26,232 |
27,805 |
94,303 |
69 |
– |
94,372 |
80,696 |
|||||||||||||||||||||||||||
Bearer deposit notes |
426 |
167 |
276 |
85 |
954 |
– |
– |
954 |
1,661 |
|||||||||||||||||||||||||||
Asset-backed commercial paper (ABCP) |
1,562 |
1,931 |
2,072 |
440 |
6,005 |
– |
– |
6,005 |
– |
|||||||||||||||||||||||||||
Senior unsecured medium-term notes |
960 |
2,156 |
8,096 |
13,449 |
24,661 |
16,131 |
29,957 |
70,749 |
65,234 |
|||||||||||||||||||||||||||
Senior unsecured structured notes (2) |
135 |
215 |
– |
31 |
381 |
156 |
8,878 |
9,415 |
7,950 |
|||||||||||||||||||||||||||
Secured funding |
||||||||||||||||||||||||||||||||||||
Mortgage and HELOC securitizations |
– |
585 |
1,165 |
1,717 |
3,467 |
3,405 |
11,044 |
17,916 |
20,385 |
|||||||||||||||||||||||||||
Covered bonds |
– |
2,330 |
– |
– |
2,330 |
3,467 |
22,615 |
28,412 |
29,047 |
|||||||||||||||||||||||||||
Other asset-backed securitizations (3) |
– |
– |
– |
148 |
148 |
176 |
7,337 |
7,661 |
6,631 |
|||||||||||||||||||||||||||
Federal Home Loan Bank advances |
693 |
– |
– |
– |
693 |
13,265 |
4,190 |
18,148 |
7,494 |
|||||||||||||||||||||||||||
Subordinated debt |
– |
– |
– |
– |
– |
– |
8,227 |
8,227 |
8,150 |
|||||||||||||||||||||||||||
Total |
21,082 |
36,378 |
38,594 |
44,602 |
140,656 |
36,669 |
92,248 |
269,573 |
236,798 |
|||||||||||||||||||||||||||
Of which: |
||||||||||||||||||||||||||||||||||||
Secured |
2,255 |
4,846 |
3,237 |
2,305 |
12,643 |
20,313 |
45,186 |
78,142 |
63,557 |
|||||||||||||||||||||||||||
Unsecured |
18,827 |
31,532 |
35,357 |
42,297 |
128,013 |
16,356 |
47,062 |
191,431 |
173,241 |
|||||||||||||||||||||||||||
Total (4) |
21,082 |
36,378 |
38,594 |
44,602 |
140,656 |
36,669 |
92,248 |
269,573 |
236,798 |
(1) |
Wholesale unsecured funding primarily includes funding raised through the issuance of negotiable marketable securities. Wholesale funding excludes repo transactions and bankers’ acceptances, which are disclosed in the Contractual Maturities of Assets and Liabilities and Off-Balance Sheet Commitments section, and also excludes ABCP issued by certain ABCP conduits that are not consolidated for financial reporting purposes. |
(2) |
Primarily issued to institutional investors. |
(3) |
Includes credit card, auto and transportation finance loan securitizations. |
(4) |
Total wholesale funding comprised Canadian-dollar-denominated funding of $49.1 billion and U.S.-dollar-denominated and other foreign-currency-denominated funding of $220.5 billion as at October 31, 2023. |
BMO Financial Group 206th Annual Report 2023 |
103 |
As at October 31, 2023 | ||||||||||
Rating agency | Short-term debt |
Senior debt (1) | Long-term deposits / Legacy senior debt (2) |
Subordinated debt (NVCC) |
Outlook | |||||
Moody’s |
P-1 |
A2 | Aa2 | Baa1(hyb) | Stable | |||||
S&P |
A-1 |
A- | A+ | BBB+ | Stable | |||||
Fitch |
F1+ | AA- | AA | A | Stable | |||||
DBRS |
R-1 (high) |
AA (low) | AA | A (low) | Stable |
(1) | Subject to conversion under the Bank Recapitalization (Bail-In) Regime. |
(2) | Long-term deposits / Legacy senior debt includes senior debt issued prior to September 23, 2018 and senior debt issued on or after September 23, 2018 that is excluded from the Bank Recapitalization (Bail-In) Regime. |
104 |
BMO Financial Group 206th Annual Report 2023 |
As at October 31, 2023 |
||||||||
(Canadian $ in billions, except as noted) | Total unweighted value (average) |
Total weighted value (average) |
||||||
High-Quality Liquid Assets |
||||||||
Total high-quality liquid assets (HQLA) |
* |
228.4 |
||||||
Cash Outflows |
||||||||
Retail deposits and deposits from small business customers, of which: |
290.4 |
21.4 |
||||||
Stable deposits |
135.0 |
4.1 |
||||||
Less stable deposits |
155.4 |
17.3 |
||||||
Unsecured wholesale funding, of which: |
295.0 |
131.7 |
||||||
Operational deposits (all counterparties) and deposits in networks of cooperative banks |
143.6 |
35.5 |
||||||
Non-operational deposits (all counterparties) |
128.5 |
73.3 |
||||||
Unsecured debt |
22.9 |
22. |
||||||
Secured wholesale funding |
20.9 |
|||||||
Additional requirements, of which: |
239.4 |
47.1 |
||||||
Outflows related to derivatives exposures and other collateral requirements |
26.3 |
7.5 |
||||||
Outflows related to loss of funding on debt products |
4.0 |
4.0 |
||||||
Credit and liquidity facilities |
209.1 |
35.6 |
||||||
Other contractual funding obligations |
1.1 |
– |
||||||
Other contingent funding obligations |
517.4 |
9.8 |
||||||
Total cash outflows |
* |
230.9 |
||||||
Cash Inflows |
||||||||
Secured lending (e.g., reverse repos) |
152.8 |
31.6 |
||||||
Inflows from fully performing exposures |
17.7 |
9.6 |
||||||
Other cash inflows |
11.2 |
11.2 |
||||||
Total cash inflows |
181.7 |
52.4 |
||||||
Total adjusted value |
||||||||
Total HQLA |
228.4 |
|||||||
Total net cash outflows |
178.5 |
|||||||
Liquidity Coverage Ratio (%) |
128 |
|||||||
For the quarter ended October 31, 2022 | Total adjusted value (4) | |||||||
Total HQLA |
204.3 | |||||||
Total net cash outflows |
151.2 | |||||||
Liquidity Coverage Ratio (%) |
135 |
(1) | Unweighted values are calculated at market value (for HQLA) or as outstanding balances maturing or callable within 30 days (for inflows and outflows). |
(2) | Values are calculated based on the simple average of the daily LCR over 62 business days in the fourth quarter of 2023. |
(3) | Weighted values are calculated after the application of the weightings prescribed under the OSFI LAR Guideline for HQLA and cash inflows and outflows. |
(4) | Adjusted values are calculated based on total weighted values after applicable caps, as defined in the LAR Guideline. |
BMO Financial Group 206th Annual Report 2023 | 105 |
For the quarter ended October 31, 2023 |
||||||||||||||||||||
Unweighted value by residual maturity |
Weighted value |
|||||||||||||||||||
(Canadian $ in billions, except as noted) | No maturity |
Less than 6 months |
6 to 12 months |
Over 1 year |
||||||||||||||||
Available Stable Funding (ASF) Item |
||||||||||||||||||||
Capital: |
– |
– |
– |
90.7 |
90.7 |
|||||||||||||||
Regulatory capital |
– |
– |
– |
90.7 |
90.7 |
|||||||||||||||
Other capital instruments |
– |
– |
– |
– |
– |
|||||||||||||||
Retail deposits and deposits from small business customers: |
228.4 |
54.6 |
36.2 |
61.5 |
348.2 |
|||||||||||||||
Stable deposits |
116.7 |
20.3 |
15.2 |
13.8 |
158.4 |
|||||||||||||||
Less stable deposits |
111.7 |
34.3 |
21.0 |
47.7 |
189.8 |
|||||||||||||||
Wholesale funding: |
276.1 |
262.9 |
61.7 |
115.2 |
280.4 |
|||||||||||||||
Operational deposits |
129.6 |
– |
– |
– |
64.8 |
|||||||||||||||
Other wholesale funding |
146.5 |
262.9 |
61.7 |
115.2 |
215.6 |
|||||||||||||||
Liabilities with matching interdependent assets |
– |
0.9 |
1.5 |
12.2 |
– |
|||||||||||||||
Other liabilities: |
4.0 |
* |
* |
33.2 |
4.8 |
|||||||||||||||
NSFR derivative liabilities |
* |
* |
* |
11.1 |
* |
|||||||||||||||
All other liabilities and equity not included in the above categories |
4.0 |
17.2 |
0.1 |
4.8 |
4.8 |
|||||||||||||||
Total ASF |
* |
* |
* |
* |
724.1 |
|||||||||||||||
Required Stable Funding (RSF) Item |
||||||||||||||||||||
Total NSFR high-quality liquid assets (HQLA) |
* |
* |
* |
* |
11.8 |
|||||||||||||||
Deposits held at other financial institutions for operational purposes |
– |
0.3 |
– |
– |
0.1 |
|||||||||||||||
Performing loans and securities: |
185.2 |
179.1 |
61.1 |
370.7 |
525.7 |
|||||||||||||||
Performing loans to financial institutions secured by Level 1 HQLA |
– |
72.6 |
2.5 |
0.3 |
3.3 |
|||||||||||||||
Performing loans to financial institutions secured by non-Level 1 HQLA and unsecured performing loans to financial institutions |
33.4 |
55.4 |
6.7 |
16.9 |
59.9 |
|||||||||||||||
Performing loans to non-financial corporate clients, loans to retail and small business customers, and loans to sovereigns, central banks and public sector entities, of which: |
109.6 |
40.4 |
42.1 |
193.2 |
300.8 |
|||||||||||||||
With a risk weight of less than or equal to 35% under the Basel II standardized approach for credit risk |
– |
– |
– |
– |
– |
|||||||||||||||
Performing residential mortgages, of which: |
13.0 |
8.5 |
9.4 |
144.9 |
122.5 |
|||||||||||||||
With a risk weight of less than or equal to 35% under the Basel II standardized approach for credit risk |
13.0 |
8.5 |
9.4 |
144.9 |
122.5 |
|||||||||||||||
Securities that are not in default and do not qualify as HQLA, including exchange-traded equities |
29.2 |
2.2 |
0.4 |
15.4 |
39.2 |
|||||||||||||||
Assets with matching interdependent liabilities |
– |
0.9 |
1.5 |
12.2 |
– |
|||||||||||||||
Other assets: |
42.8 |
* |
* |
55.1 |
69.4 |
|||||||||||||||
Physical traded commodities, including gold |
4.9 |
* |
* |
* |
4.1 |
|||||||||||||||
Assets posted as initial margin for derivative contracts and contributions to default funds of CCPs |
* |
* |
* |
12.7 |
10.8 |
|||||||||||||||
NSFR derivative assets |
* |
* |
* |
6.1 |
– |
|||||||||||||||
NSFR derivative liabilities before deduction of variation margin posted |
* |
* |
* |
20.7 |
1.0 |
|||||||||||||||
All other assets not included in the above categories |
37.9 |
7.2 |
0.2 |
8.2 |
53.5 |
|||||||||||||||
Off-balance sheet items |
– |
– |
– |
589.6 |
20.8 |
|||||||||||||||
Total RSF |
* |
* |
* |
* |
627.8 |
|||||||||||||||
Net Stable Funding Ratio (%) |
* |
* |
* |
* |
115 |
|||||||||||||||
For the quarter ended October 31, 2022 | Weighted value (2) |
|||||||||||||||||||
Total ASF |
610.2 | |||||||||||||||||||
Total RSF |
534.1 | |||||||||||||||||||
Net Stable Funding Ratio (%) |
114 |
(1) | Items in the no maturity column do not have a stated maturity. These may include, but are not limited to, items such as non-maturity deposits, short positions, open maturity positions, non-HQLA equities, physical traded commodities and demand loans. |
(2) | Weighted values are calculated after the application of the weights prescribed under the OSFI LAR Guideline for ASF and RSF. |
106 |
BMO Financial Group 206th Annual Report 2023 |
2023 |
||||||||||||||||||||||||||||||||||||||||
(Canadian $ in millions) |
0 to 1 month |
1 to 3 months |
3 to 6 months |
6 to 9 months |
9 to 12 months |
1 to 2 years |
2 to 5 years |
Over 5 years |
No maturity |
Total |
||||||||||||||||||||||||||||||
On-Balance Sheet Financial Instruments Assets |
||||||||||||||||||||||||||||||||||||||||
Cash and cash equivalents |
||||||||||||||||||||||||||||||||||||||||
Interest bearing deposits with banks |
||||||||||||||||||||||||||||||||||||||||
Securities |
||||||||||||||||||||||||||||||||||||||||
Securities borrowed or purchased under resale agreements |
||||||||||||||||||||||||||||||||||||||||
Loans (1) |
||||||||||||||||||||||||||||||||||||||||
Residential mortgages |
||||||||||||||||||||||||||||||||||||||||
Consumer instalment and other personal |
||||||||||||||||||||||||||||||||||||||||
Credit cards |
||||||||||||||||||||||||||||||||||||||||
Business and government |
||||||||||||||||||||||||||||||||||||||||
Allowance for credit losses |
( |
) |
( |
) | ||||||||||||||||||||||||||||||||||||
Total loans, net of allowance |
||||||||||||||||||||||||||||||||||||||||
Other Assets |
||||||||||||||||||||||||||||||||||||||||
Derivative instruments |
||||||||||||||||||||||||||||||||||||||||
Customers’ liabilities under acceptances |
||||||||||||||||||||||||||||||||||||||||
Other |
||||||||||||||||||||||||||||||||||||||||
Total other assets |
||||||||||||||||||||||||||||||||||||||||
Total Assets |
||||||||||||||||||||||||||||||||||||||||
2023 |
||||||||||||||||||||||||||||||||||||||||
(Canadian $ in millions) |
0 to 1 month |
1 to 3 months |
3 to 6 months |
6 to 9 months |
9 to 12 months |
1 to 2 years |
2 to 5 years |
Over 5 years |
No maturity |
Total |
||||||||||||||||||||||||||||||
Liabilities and Equity |
||||||||||||||||||||||||||||||||||||||||
Deposits (2) (3) |
||||||||||||||||||||||||||||||||||||||||
Other liabilities |
||||||||||||||||||||||||||||||||||||||||
Derivative instruments |
||||||||||||||||||||||||||||||||||||||||
Acceptances |
||||||||||||||||||||||||||||||||||||||||
Securities sold but not yet purchased (4) |
||||||||||||||||||||||||||||||||||||||||
Securities lent or sold under repurchase agreements (4) |
||||||||||||||||||||||||||||||||||||||||
Securitization and liabilities related to structured entities |
||||||||||||||||||||||||||||||||||||||||
Other |
||||||||||||||||||||||||||||||||||||||||
Total other liabilities |
||||||||||||||||||||||||||||||||||||||||
Subordinated debt |
||||||||||||||||||||||||||||||||||||||||
Total Equity |
||||||||||||||||||||||||||||||||||||||||
Total Liabilities and Equity |
(1) |
Loans receivable on demand have been included under no maturity. |
(2) |
Deposits payable on demand and payable after notice have been included under no maturity. |
(3) |
Deposits totalling $30,852 million as at October 31, 2023 have a fixed maturity date; however, they can be redeemed early (either fully or partially) by customers without penalty. These are classified as payable on a fixed date due to their stated contractual maturity date. |
(4) |
Presented based on their earliest maturity date. |
2023 |
||||||||||||||||||||||||||||||||||||||||
(Canadian $ in millions) |
0 to 1 month |
1 to 3 months |
3 to 6 months |
6 to 9 months |
9 to 12 months |
1 to 2 years |
2 to 5 years |
Over 5 years |
No maturity |
Total |
||||||||||||||||||||||||||||||
Off-Balance Sheet Commitments |
||||||||||||||||||||||||||||||||||||||||
Commitments to extend credit (1) |
||||||||||||||||||||||||||||||||||||||||
Letters of credit (2) |
||||||||||||||||||||||||||||||||||||||||
Backstop liquidity facilities |
||||||||||||||||||||||||||||||||||||||||
Other commitments (3) |
(1) |
Commitments to extend credit exclude personal lines of credit and credit cards that are unconditionally cancellable at BMO’s discretion. A large majority of these commitments expire without being drawn upon. As a result, the total contractual amounts may not be representative of the funding likely to be required for these commitments. |
(2) |
Letters of credit can be drawn down at any time. These are classified based on their stated contractual maturity. |
(3) |
Other commitments comprise purchase obligations and lease commitments for leases signed but not yet commenced. |
BMO Financial Group 206th Annual Report 2023 |
10 7 |
2022 |
||||||||||||||||||||||||||||||||||||||||
(Canadian $ in millions) |
0 to 1 month |
1 to 3 months |
3 to 6 months |
6 to 9 months |
9 to 12 months |
1 to 2 years |
2 to 5 years |
Over 5 years |
No maturity |
Total |
||||||||||||||||||||||||||||||
On-Balance Sheet Financial Instruments Assets |
||||||||||||||||||||||||||||||||||||||||
Cash and cash equivalents |
– |
– |
– |
– |
– |
– |
– |
|||||||||||||||||||||||||||||||||
Interest bearing deposits with banks |
– |
– |
– |
– |
||||||||||||||||||||||||||||||||||||
Securities |
||||||||||||||||||||||||||||||||||||||||
Securities borrowed or purchased under resale agreements |
– |
– |
– |
– |
||||||||||||||||||||||||||||||||||||
Loans (1) |
||||||||||||||||||||||||||||||||||||||||
Residential mortgages |
||||||||||||||||||||||||||||||||||||||||
Consumer instalment and other personal |
||||||||||||||||||||||||||||||||||||||||
Credit cards |
– |
– |
– |
– |
– |
– |
– |
– |
||||||||||||||||||||||||||||||||
Business and government |
||||||||||||||||||||||||||||||||||||||||
Allowance for credit losses |
– |
– |
– |
– |
– |
– |
– |
– |
( |
) |
( |
) | ||||||||||||||||||||||||||||
Total loans, net of allowance |
||||||||||||||||||||||||||||||||||||||||
Other Assets |
||||||||||||||||||||||||||||||||||||||||
Derivative instruments |
– |
|||||||||||||||||||||||||||||||||||||||
Customers’ liabilities under acceptances |
– |
– |
– |
– |
– |
|||||||||||||||||||||||||||||||||||
Other |
||||||||||||||||||||||||||||||||||||||||
Total other assets |
||||||||||||||||||||||||||||||||||||||||
Total Assets |
||||||||||||||||||||||||||||||||||||||||
2022 |
||||||||||||||||||||||||||||||||||||||||
(Canadian $ in millions) |
0 to 1 month |
1 to 3 months |
3 to 6 months |
6 to 9 months |
9 to 12 months |
1 to 2 years |
2 to 5 years |
Over 5 years |
No maturity |
Total |
||||||||||||||||||||||||||||||
Liabilities and Equity |
||||||||||||||||||||||||||||||||||||||||
Deposits (2) (3) |
||||||||||||||||||||||||||||||||||||||||
Other liabilities |
||||||||||||||||||||||||||||||||||||||||
Derivative instruments |
– |
|||||||||||||||||||||||||||||||||||||||
Acceptances |
– |
– |
– |
– |
– |
|||||||||||||||||||||||||||||||||||
Securities sold but not yet purchased (4) |
– |
– |
– |
– |
– |
– |
– |
– |
||||||||||||||||||||||||||||||||
Securities lent or sold under repurchase agreements (4) |
– |
– |
– |
– |
– |
|||||||||||||||||||||||||||||||||||
Securitization and liabilities related to structured entities |
– |
|||||||||||||||||||||||||||||||||||||||
Other |
||||||||||||||||||||||||||||||||||||||||
Total other liabilities |
||||||||||||||||||||||||||||||||||||||||
Subordinated debt |
– |
– |
– |
– |
– |
– |
– |
|||||||||||||||||||||||||||||||||
Total Equity |
– |
– |
– |
– |
– |
– |
– |
– |
||||||||||||||||||||||||||||||||
Total Liabilities and Equity |
(1) |
Loans receivable on demand have been included under no maturity. |
(2) |
Deposits payable on demand and payable after notice have been included under no maturity. |
(3) |
Deposits totalling $29,966 million as at October 31, 2022 have a fixed maturity date; however, they can be redeemed early (either fully or partially) by customers without penalty. These are classified as payable on a fixed date due to their stated contractual maturity date. |
(4) |
Presented based on their earliest maturity date. |
2022 |
||||||||||||||||||||||||||||||||||||||||
(Canadian $ in millions) |
0 to 1 month |
1 to 3 months |
3 to 6 months |
6 to 9 months |
9 to 12 months |
1 to 2 years |
2 to 5 years |
Over 5 years |
No maturity |
Total |
||||||||||||||||||||||||||||||
Off-Balance Sheet Commitments |
||||||||||||||||||||||||||||||||||||||||
Commitments to extend credit (1) |
– |
|||||||||||||||||||||||||||||||||||||||
Letters of credit (2) |
– |
|||||||||||||||||||||||||||||||||||||||
Backstop liquidity facilities |
– |
– |
||||||||||||||||||||||||||||||||||||||
Other commitments (3) |
– |
(1) |
Commitments to extend credit exclude personal lines of credit and credit cards that are unconditionally cancellable at BMO’s discretion. A large majority of these commitments expire without being drawn upon. As a result, the total contractual amounts may not be representative of the funding likely to be required for these commitments. |
(2) |
Letters of credit can be drawn down at any time. These are classified based on their stated contractual maturity. |
(3) |
Other commitments comprise purchase obligations and lease commitments for leases signed but not yet commenced. |
108 |
BMO Financial Group 206th Annual Report 2023 |
BMO Financial Group 206th Annual Report 2023 | 109 |
• |
Risk and Control Self-Assessment |
• |
BMO’s Initiative Assessment and Approval Process |
• |
Material trends, metrics and risk assessments comprising Key Risk Indicators, Issues Management Internal Loss Data Events |
• |
Historical Internal Loss Data Events |
• |
Stress Testing |
• |
BMO’s Corporate Risk & Insurance (CR&I) |
110 |
BMO Financial Group 206th Annual Report 2023 |
BMO Financial Group 206th Annual Report 2023 | 111 |
112 |
BMO Financial Group 206th Annual Report 2023 |
BMO Financial Group 206th Annual Report 2023 | 113 |
114 |
BMO Financial Group 206th Annual Report 2023 |
BMO Financial Group 206th Annual Report 2023 | 115 |
116 |
BMO Financial Group 206th Annual Report 2023 |
BMO Financial Group 206th Annual Report 2023 | 117 |
118 |
BMO Financial Group 206th Annual Report 2023 |
BMO Financial Group 206th Annual Report 2023 | 119 |
• |
Developing and maintaining valuation policies, procedures and methodologies in accordance with IFRS and regulatory requirements |
• |
Establishing official rate sources for valuation data inputs, and |
• |
Providing independent review of portfolios for which prices supplied by traders are used for valuation. |
120 |
BMO Financial Group 206th Annual Report 2023 |
BMO Financial Group 206th Annual Report 2023 | 121 |
• |
IFRS 17 requires us to measure groups of contracts based on our estimates of the present value of future cash flows that are expected to arise as we fulfill the contracts, an explicit risk adjustment for insurance-specific risk, and a contractual service margin (CSM) representing unearned profits. |
• |
The CSM component of the insurance contract liability will be amortized into income as services/insurance coverage is provided. For groups of onerous contracts that are expected to experience losses, these losses are recorded in income immediately. Under IFRS 4, there is no similar grouping requirement and gains/losses on new business are recognized in income immediately. |
• |
The discount rate we use under IFRS 4 is connected to the net yield of the assets held to support insurance contract liabilities. Under IFRS 17, the rate used to discount our insurance contract liabilities will reflect the characteristics of those insurance contract liabilities. We have elected the accounting policy choice under IFRS 17 to recognize changes in the discount rate and financial assumptions on insurance contract liabilities through the Consolidated Statement of Income. |
122 |
BMO Financial Group 206th Annual Report 2023 |
BMO Financial Group 206th Annual Report 2023 | 123 |
• |
Annually reviewing the audit plan in two separate meetings, including a consideration of the impact of business risks on the audit plan and an assessment of the reasonableness of the audit fee |
• |
Reviewing the qualifications of the senior engagement team members |
• |
Monitoring the execution of the audit plan of the shareholders’ auditors, with a focus on the more complex and challenging areas of the audit |
• |
Reviewing and evaluating the audit findings, including during in-camera sessions |
• |
Evaluating audit quality and performance, including recent Canadian Public Accountability Board (CPAB) and Public Company Accounting Oversight Board (PCAOB) inspection reports on the shareholders’ auditors and their peer firms |
• |
At a minimum, holding quarterly meetings with the chair of the ACRC and the lead audit partner to discuss audit-related issues independently of management |
• |
Performing a comprehensive review of the shareholders’ auditors every five years, and performing an annual review in the years between these comprehensive reviews, following the guidelines set out by the Chartered Professional Accountants of Canada (CPA Canada) and the CPAB. |
(Canadian $ in millions) Fees (1) |
2023 |
2022 | ||||||
Audit fees |
34.4 |
23.5 | ||||||
Audit-related fees (2) |
3.0 |
4.8 | ||||||
Tax services fees (3) |
0.2 |
0.3 | ||||||
All other fees (4) |
0.9 |
0.7 | ||||||
Total |
38.5 |
29.3 |
(1) | The classification of fees is based on applicable Canadian securities laws and U.S. Securities and Exchange Commission definitions. |
(2) | Includes fees paid for specified procedures on BMO’s Proxy Circular and other services, and French translation of financial statements, related continuous disclosures and other public documents containing financial information. |
(3) | Includes fees paid for tax compliance services provided to various BMO-managed investment company complexes. |
(4) | Includes other fees paid by BMO-managed investment company complexes. |
124 |
BMO Financial Group 206th Annual Report 2023 |
• |
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of BMO |
• |
Are designed to provide reasonable assurance that transactions are recorded as necessary to permit preparation of the consolidated financial statements in accordance with IFRS and the requirements of the SEC in the United States, as applicable, and that receipts and expenditures of BMO are being made only in accordance with authorizations by management and directors of BMO, and |
• |
Are designed to provide reasonable assurance that any unauthorized acquisition, use or disposition of BMO’s assets that could have a material effect on the consolidated financial statements is prevented or detected in a timely manner. |
BMO Financial Group 206th Annual Report 2023 | 125 |
Table 1: |
Ten-Year Statistical Review |
($ millions) As at or for the year ended October 31 |
2023 |
2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||||||||||||||||||||||
Condensed Consolidated Balance Sheet |
||||||||||||||||||||||||||||||||||||||||
Assets |
||||||||||||||||||||||||||||||||||||||||
Cash and cash equivalents |
77,934 |
87,466 | 93,261 | 57,408 | 48,803 | 42,142 | 32,599 | 31,653 | 40,295 | 28,386 | ||||||||||||||||||||||||||||||
Interest bearing deposits with banks |
4,125 |
5,734 | 8,303 | 9,035 | 7,987 | 8,305 | 6,490 | 4,449 | 7,382 | 6,110 | ||||||||||||||||||||||||||||||
Securities |
322,379 |
273,262 | 232,849 | 234,260 | 189,438 | 180,935 | 163,198 | 149,985 | 130,918 | 143,319 | ||||||||||||||||||||||||||||||
Securities borrowed or purchased under resale agreements |
115,662 |
113,194 | 107,382 | 111,878 | 104,004 | 85,051 | 75,047 | 66,646 | 68,066 | 53,555 | ||||||||||||||||||||||||||||||
Loans, net of allowances |
656,478 |
551,339 | 458,262 | 447,420 | 426,984 | 384,172 | 358,507 | 357,518 | 321,531 | 291,400 | ||||||||||||||||||||||||||||||
Other |
116,698 |
108,204 | 88,118 | 89,260 | 74,979 | 72,688 | 73,763 | 77,709 | 73,689 | 65,889 | ||||||||||||||||||||||||||||||
Total assets |
1,293,276 |
1,139,199 | 988,175 | 949,261 | 852,195 | 773,293 | 709,604 | 687,960 | 641,881 | 588,659 | ||||||||||||||||||||||||||||||
Liabilities |
||||||||||||||||||||||||||||||||||||||||
Deposits |
909,676 |
769,478 | 685,631 | 659,034 | 568,143 | 520,928 | 479,792 | 470,281 | 438,169 | 393,088 | ||||||||||||||||||||||||||||||
Other |
298,335 |
290,533 | 238,128 | 225,218 | 225,981 | 199,862 | 180,438 | 170,910 | 159,383 | 155,254 | ||||||||||||||||||||||||||||||
Subordinated debt |
8,228 |
8,150 | 6,893 | 8,416 | 6,995 | 6,782 | 5,029 | 4,439 | 4,416 | 4,913 | ||||||||||||||||||||||||||||||
Total liabilities |
1,216,239 |
1,068,161 | 930,652 | 892,668 | 801,119 | 727,572 | 665,259 | 645,630 | 601,968 | 553,255 | ||||||||||||||||||||||||||||||
Total equity |
77,037 |
71,038 | 57,523 | 56,593 | 51,076 | 45,721 | 44,345 | 42,306 | 39,422 | 34,313 | ||||||||||||||||||||||||||||||
Total liabilities and equity |
1,293,276 |
1,139,199 | 988,175 | 949,261 | 852,195 | 773,293 | 709,604 | 687,960 | 641,881 | 588,659 | ||||||||||||||||||||||||||||||
Condensed Consolidated Statement of Income |
||||||||||||||||||||||||||||||||||||||||
Net interest income |
18,681 |
15,885 | 14,310 | 13,971 | 12,888 | 11,438 | 11,275 | 10,945 | 9,796 | 8,292 | ||||||||||||||||||||||||||||||
Non-interest revenue |
12,518 |
17,825 | 12,876 | 11,215 | 12,595 | 11,467 | 10,832 | 10,015 | 9,593 | 9,931 | ||||||||||||||||||||||||||||||
Total revenue |
31,199 |
33,710 | 27,186 | 25,186 | 25,483 | 22,905 | 22,107 | 20,960 | 19,389 | 18,223 | ||||||||||||||||||||||||||||||
Insurance claims, commissions and changes in policy benefit liabilities (CCPB) |
1,939 |
(683 | ) | 1,399 | 1,708 | 2,709 | 1,352 | 1,538 | 1,543 | 1,254 | 1,505 | |||||||||||||||||||||||||||||
Provision for credit losses (PCL) |
2,178 |
313 | 20 | 2,953 | 872 | 662 | 746 | 771 | 544 | 527 | ||||||||||||||||||||||||||||||
Non-interest expense |
21,219 |
16,194 | 15,509 | 14,177 | 14,630 | 13,477 | 13,192 | 12,916 | 12,250 | 10,955 | ||||||||||||||||||||||||||||||
Income before income taxes |
5,863 |
17,886 | 10,258 | 6,348 | 7,272 | 7,414 | 6,631 | 5,730 | 5,341 | 5,236 | ||||||||||||||||||||||||||||||
Provision for income taxes |
1,486 |
4,349 | 2,504 | 1,251 | 1,514 | 1,961 | 1,292 | 1,100 | 936 | 903 | ||||||||||||||||||||||||||||||
Net income |
4,377 |
13,537 | 7,754 | 5,097 | 5,758 | 5,453 | 5,339 | 4,630 | 4,405 | 4,333 | ||||||||||||||||||||||||||||||
Net income available to common shareholders |
4,034 |
13,306 | 7,510 | 4,850 | 5,547 | 5,269 | 5,153 | 4,471 | 4,253 | 4,157 | ||||||||||||||||||||||||||||||
Condensed Consolidated Statement of Changes in Equity |
||||||||||||||||||||||||||||||||||||||||
Preferred shares and other equity instruments |
6,958 |
6,308 | 5,558 | 6,598 | 5,348 | 4,340 | 4,240 | 3,840 | 3,240 | 3,040 | ||||||||||||||||||||||||||||||
Common shares |
22,941 |
17,744 | 13,599 | 13,430 | 12,971 | 12,929 | 13,032 | 12,539 | 12,313 | 12,357 | ||||||||||||||||||||||||||||||
Contributed surplus |
328 |
317 | 313 | 302 | 303 | 300 | 307 | 294 | 299 | 304 | ||||||||||||||||||||||||||||||
Retained earnings |
44,920 |
45,117 | 35,497 | 30,745 | 28,725 | 25,850 | 23,700 | 21,207 | 18,930 | 17,237 | ||||||||||||||||||||||||||||||
Accumulated other comprehensive income |
1,862 |
1,552 | 2,556 | 5,518 | 3,729 | 2,302 | 3,066 | 4,426 | 4,640 | 1,375 | ||||||||||||||||||||||||||||||
Non-controlling interest in subsidiaries |
28 |
– | – | – | – | – | – | – | – | – | ||||||||||||||||||||||||||||||
Total equity |
77,037 |
71,038 | 57,523 | 56,593 | 51,076 | 45,721 | 44,345 | 42,306 | 39,422 | 34,313 |
126 |
BMO Financial Group 206th Annual Report 2023 |
($ millions, except as noted) As at or for the year ended October 31 |
2023 |
2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||||||||||||||||||||||
Other Financial Measures |
||||||||||||||||||||||||||||||||||||||||
Common Share Data ($) |
||||||||||||||||||||||||||||||||||||||||
Basic earnings per share |
5.69 |
20.04 | 11.60 | 7.56 | 8.68 | 8.19 | 7.93 | 6.94 | 6.59 | 6.44 | ||||||||||||||||||||||||||||||
Diluted earnings per share |
5.68 |
19.99 | 11.58 | 7.55 | 8.66 | 8.17 | 7.90 | 6.92 | 6.57 | 6.41 | ||||||||||||||||||||||||||||||
Dividends declared per share |
5.80 |
5.44 | 4.24 | 4.24 | 4.06 | 3.78 | 3.56 | 3.40 | 3.24 | 3.08 | ||||||||||||||||||||||||||||||
Book value per share |
97.17 |
95.60 | 80.18 | 77.40 | 71.54 | 64.73 | 61.91 | 59.57 | 56.31 | 48.18 | ||||||||||||||||||||||||||||||
Closing share price |
104.79 |
125.49 | 134.37 | 79.33 | 97.50 | 98.43 | 98.83 | 85.36 | 76.04 | 81.73 | ||||||||||||||||||||||||||||||
Number outstanding (in thousands) |
||||||||||||||||||||||||||||||||||||||||
End of year |
720,909 |
677,107 | 648,136 | 645,889 | 639,232 | 639,330 | 647,816 | 645,761 | 642,583 | 649,050 | ||||||||||||||||||||||||||||||
Market capitalization ($ billions) |
75.5 |
85.0 | 87.1 | 51.2 | 62.3 | 62.9 | 64.0 | 55.1 | 48.9 | 53.0 | ||||||||||||||||||||||||||||||
Price-to-earnings |
18.5 |
6.3 | 11.6 | 10.5 | 11.3 | 12.0 | 12.5 | 12.3 | 11.6 | 12.8 | ||||||||||||||||||||||||||||||
Market-to-book |
1.08 |
1.31 | 1.68 | 1.02 | 1.36 | 1.52 | 1.60 | 1.43 | 1.35 | 1.70 | ||||||||||||||||||||||||||||||
Dividend yield (%) |
5.5 |
4.3 | 3.2 | 5.3 | 4.2 | 3.8 | 3.6 | 4.0 | 4.3 | 3.8 | ||||||||||||||||||||||||||||||
Dividend payout ratio (%) |
102.0 |
27.1 | 36.5 | 56.1 | 46.8 | 46.1 | 44.9 | 49.0 | 49.2 | 47.8 | ||||||||||||||||||||||||||||||
Financial Measures and Ratios (%) |
||||||||||||||||||||||||||||||||||||||||
Return on equity |
6.0 |
22.9 | 14.9 | 10.1 | 12.6 | 13.3 | 13.2 | 12.1 | 12.5 | 14.0 | ||||||||||||||||||||||||||||||
Efficiency ratio |
68.0 |
48.0 | 57.0 | 56.3 | 57.4 | 58.8 | 59.7 | 61.6 | 63.2 | 60.1 | ||||||||||||||||||||||||||||||
Net interest margin on average earning assets |
1.63 |
1.62 | 1.59 | 1.64 | 1.70 | 1.67 | 1.74 | 1.76 | 1.69 | 1.57 | ||||||||||||||||||||||||||||||
Total PCL-to-average and acceptances |
0.35 |
0.06 | – | 0.63 | 0.20 | 0.17 | 0.20 | 0.22 | 0.17 | 0.18 | ||||||||||||||||||||||||||||||
PCL on impaired loans-to-average loans and acceptances |
0.19 |
0.10 | 0.11 | 0.33 | 0.17 | 0.18 | 0.22 | 0.22 | – | – | ||||||||||||||||||||||||||||||
Return on average assets |
0.35 |
1.26 | 0.79 | 0.54 | 0.69 | 0.72 | 0.74 | 0.65 | 0.66 | 0.72 | ||||||||||||||||||||||||||||||
Return on average risk-weighted assets (1) |
1.08 |
3.89 | 2.38 | 1.51 | 1.86 | 1.97 | 1.98 | 1.71 | 1.84 | 1.85 | ||||||||||||||||||||||||||||||
Average assets ($ millions) |
1,248,356 |
1,072,497 | 981,140 | 942,450 | 833,252 | 754,295 | 722,626 | 707,122 | 664,391 | 593,928 | ||||||||||||||||||||||||||||||
Capital Measures (%) (1) |
||||||||||||||||||||||||||||||||||||||||
Common Equity Tier 1 Ratio |
12.5 |
16.7 | 13.7 | 11.9 | 11.4 | 11.3 | 11.4 | 10.1 | 10.7 | 10.1 | ||||||||||||||||||||||||||||||
Tier 1 Capital Ratio |
14.1 |
18.4 | 15.4 | 13.6 | 13.0 | 12.9 | 13.0 | 11.6 | 12.3 | 12.0 | ||||||||||||||||||||||||||||||
Total Capital Ratio |
16.2 |
20.7 | 17.6 | 16.2 | 15.2 | 15.2 | 15.1 | 13.6 | 14.4 | 14.3 | ||||||||||||||||||||||||||||||
Leverage Ratio |
4.2 |
5.6 | 5.1 | 4.8 | 4.3 | 4.2 | 4.4 | 4.2 | 4.2 | na | ||||||||||||||||||||||||||||||
Other Statistical Information |
||||||||||||||||||||||||||||||||||||||||
Number of employees |
55,767 |
46,722 | 43,863 | 43,360 | 45,513 | 45,454 | 45,200 | 45,234 | 46,353 | 46,778 | ||||||||||||||||||||||||||||||
Number of bank branches |
1,890 |
1,383 | 1,405 | 1,409 | 1,456 | 1,483 | 1,503 | 1,522 | 1,535 | 1,553 | ||||||||||||||||||||||||||||||
Number of automated teller machines |
5,765 |
4,717 | 4,851 | 4,820 | 4,967 | 4,828 | 4,731 | 4,599 | 4,761 | 4,338 |
(1) | Capital ratios and risk-weighted assets are disclosed in accordance with the Capital Adequacy Requirements (CAR) Guideline, as set out by OSFI, as applicable. |
BMO Financial Group 206th Annual Report 2023 | 127 |
Table 2: |
Average Assets, Liabilities and Interest Rates |
2023 |
2022 | |||||||||||||||||||||||
($ millions, except as noted) For the year ended October 31 |
Average balances |
Average interest rate (%) |
Interest income/ expense |
Average balances |
Average interest rate (%) |
Interest income/ expense |
||||||||||||||||||
Assets |
||||||||||||||||||||||||
Canadian Dollar |
||||||||||||||||||||||||
Interest bearing deposits with banks and other interest bearing assets |
33,102 |
4.77 |
1,579 |
33,950 | 1.23 | 416 | ||||||||||||||||||
Securities |
94,697 |
4.08 |
3,859 |
80,971 | 2.52 | 2,043 | ||||||||||||||||||
Securities borrowed or purchased under resale agreements |
47,239 |
4.90 |
2,317 |
50,090 | 1.39 | 695 | ||||||||||||||||||
Loans |
||||||||||||||||||||||||
Residential mortgages |
143,958 |
3.96 |
5,696 |
132,118 | 2.53 | 3,345 | ||||||||||||||||||
Consumer instalment and other personal |
69,611 |
5.70 |
3,969 |
66,899 | 3.65 | 2,442 | ||||||||||||||||||
Credit cards |
9,519 |
14.69 |
1,399 |
7,933 | 13.37 | 1,061 | ||||||||||||||||||
Business and government |
114,176 |
4.88 |
5,575 |
101,011 | 3.90 | 3,940 | ||||||||||||||||||
Total loans |
337,264 |
4.93 |
16,639 |
307,961 | 3.50 | 10,788 | ||||||||||||||||||
Total Canadian dollar |
512,302 |
4.76 |
24,394 |
472,972 | 2.95 | 13,942 | ||||||||||||||||||
U.S. Dollar and Other Currencies |
||||||||||||||||||||||||
Interest bearing deposits with banks and other interest bearing assets |
66,212 |
4.33 |
2,866 |
60,463 | 0.83 | 504 | ||||||||||||||||||
Securities |
218,443 |
3.45 |
7,533 |
185,099 | 1.92 | 3,548 | ||||||||||||||||||
Securities borrowed or purchased under resale agreements |
69,405 |
5.11 |
3,543 |
62,416 | 1.02 | 640 | ||||||||||||||||||
Loans |
||||||||||||||||||||||||
Residential mortgages |
20,168 |
4.41 |
890 |
8,312 | 2.97 | 247 | ||||||||||||||||||
Consumer instalment and other personal |
29,021 |
6.54 |
1,899 |
14,439 | 3.63 | 525 | ||||||||||||||||||
Credit cards |
1,265 |
10.70 |
135 |
621 | 9.92 | 61 | ||||||||||||||||||
Business and government |
225,567 |
6.35 |
14,314 |
172,583 | 4.31 | 7,430 | ||||||||||||||||||
Total loans |
276,021 |
6.25 |
17,238 |
195,955 | 4.22 | 8,263 | ||||||||||||||||||
Total U.S. dollar and other currencies |
630,081 |
4.95 |
31,180 |
503,933 | 2.57 | 12,955 | ||||||||||||||||||
Other non-interest bearing assets |
105,973 |
95,592 | ||||||||||||||||||||||
Total All Currencies |
||||||||||||||||||||||||
Total assets and interest income |
1,248,356 |
4.45 |
55,574 |
1,072,497 | 2.51 | 26,897 | ||||||||||||||||||
Liabilities |
||||||||||||||||||||||||
Canadian Dollar |
||||||||||||||||||||||||
Deposits |
||||||||||||||||||||||||
Banks |
4,415 |
2.01 |
89 |
4,983 | 0.37 | 19 | ||||||||||||||||||
Business and government |
181,371 |
3.47 |
6,301 |
169,063 | 1.31 | 2,221 | ||||||||||||||||||
Individuals |
166,134 |
2.02 |
3,352 |
149,329 | 0.58 | 866 | ||||||||||||||||||
Total deposits |
351,920 |
2.77 |
9,742 |
323,375 | 0.96 | 3,106 | ||||||||||||||||||
Securities sold but not yet purchased and securities lent or sold under repurchase agreements (1) |
55,466 |
4.22 |
2,340 |
60,163 | 1.62 | 974 | ||||||||||||||||||
Subordinated debt and other interest bearing liabilities |
25,750 |
3.58 |
921 |
25,788 | 2.39 | 616 | ||||||||||||||||||
Total Canadian dollar |
433,136 |
3.00 |
13,003 |
409,326 | 1.15 | 4,696 | ||||||||||||||||||
U.S. Dollar and Other Currencies |
||||||||||||||||||||||||
Deposits |
||||||||||||||||||||||||
Banks |
25,940 |
4.43 |
1,148 |
23,583 | 1.21 | 285 | ||||||||||||||||||
Business and government |
368,237 |
3.70 |
13,617 |
305,576 | 1.02 | 3,104 | ||||||||||||||||||
Individuals |
119,710 |
1.70 |
2,040 |
75,160 | 0.29 | 216 | ||||||||||||||||||
Total deposits |
513,887 |
3.27 |
16,805 |
404,319 | 0.89 | 3,605 | ||||||||||||||||||
Securities sold but not yet purchased and securities lent or sold under repurchase agreements (1) |
100,084 |
4.95 |
4,957 |
90,324 | 1.85 | 1,671 | ||||||||||||||||||
Subordinated debt and other interest bearing liabilities |
33,403 |
6.37 |
2,128 |
20,600 | 5.05 | 1,040 | ||||||||||||||||||
Total U.S. dollar and other currencies |
647,374 |
3.69 |
23,890 |
515,243 | 1.23 | 6,316 | ||||||||||||||||||
Other non-interest bearing liabilities |
93,548 |
84,253 | ||||||||||||||||||||||
Total All Currencies |
||||||||||||||||||||||||
Total liabilities and interest expense |
1,174,058 |
3.14 |
36,893 |
1,008,822 | 1.09 | 11,012 | ||||||||||||||||||
Total equity |
74,298 |
63,675 | ||||||||||||||||||||||
Total Liabilities, Equity and Interest Expense |
1,248,356 |
2.96 |
36,893 |
1,072,497 | 1.03 | 11,012 | ||||||||||||||||||
Net interest margin |
||||||||||||||||||||||||
– based on earning assets |
1.63 |
1.62 | ||||||||||||||||||||||
– based on total assets |
1.50 |
1.48 | ||||||||||||||||||||||
Net interest income |
18,681 |
15,885 |
(1) | For the years ended October 31, 2023 and 2022, the maximum amount of securities lent or sold under repurchase agreements at any month end was $111,685 million and $129,549 million, respectively. |
128 |
BMO Financial Group 206th Annual Report 2023 |
Table 3: |
Volume/Rate Analysis of Changes in Net Interest Income |
2023/2022 |
||||||||||||
Increase (decrease) due to change in |
||||||||||||
($ millions) For the year ended October 31 |
Average balance |
Average rate |
Total |
|||||||||
Assets |
||||||||||||
Canadian Dollar |
||||||||||||
Interest bearing deposits with banks and other interest bearing assets |
(10 |
) |
1,173 |
1,163 |
||||||||
Securities |
346 |
1,470 |
1,816 |
|||||||||
Securities borrowed or purchased under resale agreements |
(40 |
) |
1,662 |
1,622 |
||||||||
Loans |
||||||||||||
Residential mortgages |
300 |
2,051 |
2,351 |
|||||||||
Consumer instalment and other personal |
99 |
1,428 |
1,527 |
|||||||||
Credit cards |
212 |
126 |
338 |
|||||||||
Business and government |
513 |
1,122 |
1,635 |
|||||||||
Total loans |
1,124 |
4,727 |
5,851 |
|||||||||
Change in Canadian dollar interest income |
1,420 |
9,032 |
10,452 |
|||||||||
U.S. Dollar and Other Currencies |
||||||||||||
Interest bearing deposits with banks and other interest bearing assets |
48 |
2,314 |
2,362 |
|||||||||
Securities |
639 |
3,346 |
3,985 |
|||||||||
Securities borrowed or purchased under resale agreements |
71 |
2,832 |
2,903 |
|||||||||
Loans |
||||||||||||
Residential mortgages |
353 |
290 |
643 |
|||||||||
Consumer instalment and other personal |
530 |
844 |
1,374 |
|||||||||
Credit cards |
64 |
10 |
74 |
|||||||||
Business and government |
2,281 |
4,603 |
6,884 |
|||||||||
Total loans |
3,228 |
5,747 |
8,975 |
|||||||||
Change in U.S. dollar and other currencies interest income |
3,986 |
14,239 |
18,225 |
|||||||||
Total All Currencies |
||||||||||||
Change in total interest income (a) |
5,406 |
23,271 |
28,677 |
|||||||||
Liabilities |
||||||||||||
Canadian Dollar |
||||||||||||
Deposits |
||||||||||||
Banks |
(2 |
) |
72 |
70 |
||||||||
Business and government |
162 |
3,918 |
4,080 |
|||||||||
Individuals |
98 |
2,388 |
2,486 |
|||||||||
Total deposits |
258 |
6,378 |
6,636 |
|||||||||
Securities sold but not yet purchased and securities lent or sold under repurchase agreements |
(76 |
) |
1,442 |
1,366 |
||||||||
Subordinated debt and other interest bearing liabilities |
(1 |
) |
306 |
305 |
||||||||
Change in Canadian dollar interest expense |
181 |
8,126 |
8,307 |
|||||||||
U.S. Dollar and Other Currencies |
||||||||||||
Deposits |
||||||||||||
Banks |
29 |
834 |
863 |
|||||||||
Business and government |
636 |
9,877 |
10,513 |
|||||||||
Individuals |
128 |
1,696 |
1,824 |
|||||||||
Total deposits |
793 |
12,407 |
13,200 |
|||||||||
Securities sold but not yet purchased and securities lent or sold under repurchase agreements |
180 |
3,106 |
3,286 |
|||||||||
Subordinated debt and other interest bearing liabilities |
646 |
442 |
1,088 |
|||||||||
Change in U.S. dollar and other currencies interest expense |
1,619 |
15,955 |
17,574 |
|||||||||
Total All Currencies |
||||||||||||
Change in total interest expense (b) |
1,800 |
24,081 |
25,881 |
|||||||||
Change in total net interest income (a – b) |
3,606 |
(810 |
) |
2,796 |
BMO Financial Group 206th Annual Report 2023 | 129 |
Table 4: |
Net Loans and Acceptances – by Geography (1) |
($ millions) | Canada | United States | Other countries | Total | ||||||||||||||||||||||||||||
As at October 31 | 2023 |
2022 | 2023 |
2022 | 2023 |
2022 | 2023 |
2022 | ||||||||||||||||||||||||
Consumer |
||||||||||||||||||||||||||||||||
Residential mortgages |
150,570 |
139,387 | 26,675 |
9,483 | – |
– | 177,245 |
148,870 | ||||||||||||||||||||||||
Credit cards |
10,880 |
9,069 | 1,414 |
594 | – |
– | 12,294 |
9,663 | ||||||||||||||||||||||||
Consumer instalment and other personal loans |
69,919 |
71,070 | 33,969 |
14,931 | – |
– | 103,888 |
86,001 | ||||||||||||||||||||||||
Total consumer |
231,369 |
219,526 | 62,058 |
25,008 | – |
– | 293,427 |
244,534 | ||||||||||||||||||||||||
Business and government |
141,405 |
135,317 | 221,218 |
175,571 | 11,662 |
11,225 | 374,285 |
322,113 | ||||||||||||||||||||||||
Total loans and acceptances, net of allowance for credit losses on impaired loans |
372,774 |
354,843 | 283,276 |
200,579 | 11,662 |
11,225 | 667,712 |
566,647 | ||||||||||||||||||||||||
Allowance for credit losses on performing loans |
(1,272 |
) |
(1,102 | ) | (1,833 |
) |
(959 | ) | (18 |
) |
(12 | ) | (3,123 |
) |
(2,073 | ) | ||||||||||||||||
Total net loans and acceptances |
371,502 |
353,741 | 281,443 |
199,620 | 11,644 |
11,213 | 664,589 |
564,574 |
Table 5: |
Net Loans and Acceptances – Segmented Information (1) |
($ millions) As at October 31 |
2023 |
2022 | ||||||
Net Loans and Acceptances by Province |
||||||||
Atlantic provinces |
17,741 |
17,617 | ||||||
Quebec |
55,978 |
53,975 | ||||||
Ontario |
171,236 |
159,862 | ||||||
Prairie provinces |
57,877 |
54,607 | ||||||
British Columbia and territories |
68,670 |
67,680 | ||||||
Total net loans and acceptances in Canada |
371,502 |
353,741 | ||||||
Net Business and Government Loans by Industry |
||||||||
Commercial real estate |
69,726 |
54,478 | ||||||
Construction (non-real estate) |
7,531 |
5,761 | ||||||
Retail trade |
30,374 |
23,716 | ||||||
Wholesale trade |
23,643 |
20,693 | ||||||
Agriculture |
18,400 |
14,181 | ||||||
Communications |
1,917 |
876 | ||||||
Financing products |
4,710 |
1,588 | ||||||
Manufacturing |
40,547 |
36,607 | ||||||
Mining |
3,268 |
3,503 | ||||||
Oil and gas |
3,711 |
3,780 | ||||||
Transportation |
15,656 |
14,691 | ||||||
Utilities |
12,247 |
9,754 | ||||||
Forest products |
1,302 |
1,113 | ||||||
Service industries |
65,593 |
55,658 | ||||||
Financial |
71,179 |
70,438 | ||||||
Government |
2,746 |
1,859 | ||||||
Other |
1,735 |
3,417 | ||||||
Total business and government (2) |
374,285 |
322,113 |
(1) | Segmented credit information by geographic area is based upon the country of ultimate risk. |
(2) | The Business and government Net Loans and Acceptances balances are net of allowance for credit losses on impaired loans only. |
130 |
BMO Financial Group 206th Annual Report 2023 |
Table 6: |
Gross Impaired Loans (GIL) – by Geography (1) |
($ millions, except as noted) | Canada | United States | Other countries | Total | ||||||||||||||||||||||||||||
As at October 31 | 2023 |
2022 | 2023 |
2022 | 2023 |
2022 | 2023 |
2022 | ||||||||||||||||||||||||
Consumer |
||||||||||||||||||||||||||||||||
Residential mortgages |
249 |
194 | 175 |
101 | – |
– | 424 |
295 | ||||||||||||||||||||||||
Consumer instalment and other personal loans |
291 |
197 | 258 |
115 | – |
– | 549 |
312 | ||||||||||||||||||||||||
Total consumer |
540 |
391 | 433 |
216 | – |
– | 973 |
607 | ||||||||||||||||||||||||
Business and government |
1,089 |
767 | 1,898 |
604 | – |
13 | 2,987 |
1,384 | ||||||||||||||||||||||||
Total impaired loans and acceptances, net of allowance for credit losses on impaired loans |
1,629 |
1,158 | 2,331 |
820 | – |
13 | 3,960 |
1,991 | ||||||||||||||||||||||||
Condition Ratios |
||||||||||||||||||||||||||||||||
GIL as a % of gross loans and acceptances |
0.44 |
0.33 | 0.82 |
0.41 | – |
0.12 | 0.59 |
0.35 | ||||||||||||||||||||||||
Consumer |
0.23 |
0.18 | 0.70 |
0.86 | – |
– | 0.33 |
0.25 | ||||||||||||||||||||||||
Business and government |
0.77 |
0.57 | 0.86 |
0.34 | – |
0.12 | 0.80 |
0.43 |
Table 7: |
Gross Impaired Loans – Segmented Information |
($ millions) As at October 31 |
2023 |
2022 | ||||||
Gross Impaired Business and Government Loans |
||||||||
Commercial real estate |
438 |
72 | ||||||
Construction (non-real estate) |
123 |
59 | ||||||
Retail trade |
479 |
173 | ||||||
Wholesale trade |
243 |
78 | ||||||
Agriculture |
135 |
202 | ||||||
Communications |
4 |
1 | ||||||
Financing products |
– |
– | ||||||
Manufacturing |
422 |
184 | ||||||
Mining |
2 |
19 | ||||||
Oil and gas |
22 |
39 | ||||||
Transportation |
170 |
73 | ||||||
Utilities |
3 |
4 | ||||||
Forest products |
4 |
3 | ||||||
Service industries |
868 |
410 | ||||||
Financial |
52 |
54 | ||||||
Government |
3 |
3 | ||||||
Other |
19 |
10 | ||||||
Total business and government |
2,987 |
1,384 |
(1) | Segmented credit information by geographic area is based upon the country of ultimate risk. |
BMO Financial Group 206th Annual Report 2023 | 131 |
Table 8: |
Changes in Gross Impaired Loans – by Geography (1) |
($ millions, except as noted) | Canada | United States | Other countries | Total | ||||||||||||||||||||||||||||
As at October 31 | 2023 |
2022 | 2023 |
2022 | 2023 |
2022 | 2023 |
2022 | ||||||||||||||||||||||||
Gross impaired loans and acceptances (GIL), beginning of year |
||||||||||||||||||||||||||||||||
Consumer |
391 |
382 | 216 |
256 | – |
– | 607 |
638 | ||||||||||||||||||||||||
Business and government |
767 |
813 | 604 |
718 | 13 |
– | 1,384 |
1,531 | ||||||||||||||||||||||||
Total GIL, beginning of year |
1,158 |
1,195 | 820 |
974 | 13 |
– | 1,991 |
2,169 | ||||||||||||||||||||||||
Purchased credit impaired (PCI) loans |
||||||||||||||||||||||||||||||||
Consumer |
– |
– | 104 |
– | – |
– | 104 |
– | ||||||||||||||||||||||||
Business and government |
– |
– | 311 |
– | – |
– | 311 |
– | ||||||||||||||||||||||||
Total PCI |
– |
– | 415 |
– | – |
– | 415 |
– | ||||||||||||||||||||||||
Additions to impaired loans and acceptances |
||||||||||||||||||||||||||||||||
Consumer |
897 |
630 | 332 |
77 | – |
– | 1,229 |
707 | ||||||||||||||||||||||||
Business and government |
819 |
538 | 1,994 |
377 | 5 |
13 | 2,818 |
928 | ||||||||||||||||||||||||
Total additions |
1,716 |
1,168 | 2,326 |
454 | 5 |
13 | 4,047 |
1,635 | ||||||||||||||||||||||||
Reductions to impaired loans and acceptances (2) |
||||||||||||||||||||||||||||||||
Consumer |
(506 |
) |
(462 | ) | (80 |
) |
(66 | ) | – |
– | (586 |
) |
(528 | ) | ||||||||||||||||||
Business and government |
(413 |
) |
(533 | ) | (723 |
) |
(389 | ) | (18 |
) |
– | (1,154 |
) |
(922 | ) | |||||||||||||||||
Total reductions due to net repayments and other |
(919 |
) |
(995 | ) | (803 |
) |
(455 | ) | (18 |
) |
– | (1,740 |
) |
(1,450 | ) | |||||||||||||||||
Write-offs (3) |
||||||||||||||||||||||||||||||||
Consumer |
(243 |
) |
(159 | ) | (138 |
) |
(51 | ) | – |
– | (381 |
) |
(210 | ) | ||||||||||||||||||
Business and government |
(83 |
) |
(51 | ) | (289 |
) |
(102 | ) | – |
– | (372 |
) |
(153 | ) | ||||||||||||||||||
Total write-offs |
(326 |
) |
(210 | ) | (427 |
) |
(153 | ) | – |
– | (753 |
) |
(363 | ) | ||||||||||||||||||
Gross impaired loans and acceptances, end of year |
||||||||||||||||||||||||||||||||
Consumer |
539 |
391 | 434 |
216 | – |
– | 973 |
607 | ||||||||||||||||||||||||
Business and government |
1,090 |
767 | 1,897 |
604 | – |
13 | 2,987 |
1,384 | ||||||||||||||||||||||||
Total GIL, end of year |
1,629 |
1,158 | 2,331 |
820 | – |
13 | 3,960 |
1,991 | ||||||||||||||||||||||||
Condition Ratios |
||||||||||||||||||||||||||||||||
GIL as a % of Gross Loans |
||||||||||||||||||||||||||||||||
Consumer |
0.23 |
0.18 | 0.70 |
0.86 | – |
– | 0.33 |
0.25 | ||||||||||||||||||||||||
Business and government |
0.77 |
0.57 | 0.86 |
0.34 | – |
0.12 | 0.80 |
0.43 | ||||||||||||||||||||||||
GIL as a % of gross loans and acceptances |
0.44 |
0.33 | 0.82 |
0.41 | – |
0.12 | 0.59 |
0.35 |
Table 9: |
Allowance for Credit Losses – by Geography (1) (2) (4) |
($ millions, except as noted) | Canada | United States | Other countries | Total | ||||||||||||||||||||||||||||
As at October 31 | 2023 |
2022 | 2023 |
2022 | 2023 |
2022 | 2023 |
2022 | ||||||||||||||||||||||||
Consumer |
||||||||||||||||||||||||||||||||
Residential mortgages |
5 |
7 | – |
3 | – |
– | 5 |
10 | ||||||||||||||||||||||||
Consumer instalment and other personal loans |
118 |
88 | 34 |
14 | – |
– | 152 |
102 | ||||||||||||||||||||||||
Total consumer |
123 |
95 | 34 |
17 | – |
– | 157 |
112 | ||||||||||||||||||||||||
Business and government |
334 |
268 | 193 |
159 | – |
5 | 527 |
432 | ||||||||||||||||||||||||
Total allowance for credit losses on impaired loans |
457 |
363 | 227 |
176 | – |
5 | 684 |
544 | ||||||||||||||||||||||||
Allowance for credit losses on performing loans |
1,272 |
1,102 | 1,833 |
959 | 18 |
12 | 3,123 |
2,073 | ||||||||||||||||||||||||
Allowance for credit losses |
1,729 |
1,465 | 2,060 |
1,135 | 18 |
17 | 3,807 |
2,617 | ||||||||||||||||||||||||
Coverage Ratios |
||||||||||||||||||||||||||||||||
Allowance for credit losses on impaired loans as a % of gross impaired loans and acceptances |
||||||||||||||||||||||||||||||||
Total |
28.1 |
31.3 | 9.7 |
21.5 | – |
38.5 | 17.3 |
27.3 | ||||||||||||||||||||||||
Consumer |
22.8 |
24.3 | 7.8 |
7.9 | – |
– | 16.1 |
18.5 | ||||||||||||||||||||||||
Business and government |
30.6 |
34.9 | 10.2 |
26.3 | – |
38.5 | 17.6 |
31.2 |
(1) | Segmented credit information by geographic area is based upon the country of ultimate risk. |
(2) | Includes impaired amounts returned to performing status, sales, repayments, the impact of foreign exchange fluctuations and offsets for consumer write-offs which have not been recognized in formations. |
(3) | Excludes certain loans that are written off directly and not classified as new formations. |
(4) | Amounts exclude Allowance for Credit Losses related to off-balance sheet instruments, which are reported in Other Liabilities. |
132 |
BMO Financial Group 206th Annual Report 2023 |
Table 10: |
Allowance for Credit Losses on Impaired Loans – Segmented Information |
($ millions) As at October 31 |
2023 |
2022 | ||||||
Business and Government |
||||||||
Allowance for Credit Losses on Impaired Loans by Industry |
||||||||
Commercial real estate |
34 |
11 | ||||||
Construction (non-real estate) |
55 |
25 | ||||||
Retail trade |
167 |
81 | ||||||
Wholesale trade |
43 |
31 | ||||||
Agriculture |
4 |
13 | ||||||
Communications |
– |
– | ||||||
Financing products |
– |
– | ||||||
Manufacturing |
61 |
41 | ||||||
Mining |
– |
5 | ||||||
Oil and gas |
22 |
39 | ||||||
Transportation |
20 |
10 | ||||||
Utilities |
2 |
1 | ||||||
Forest products |
2 |
1 | ||||||
Service industries |
108 |
144 | ||||||
Financial |
9 |
29 | ||||||
Government |
– |
– | ||||||
Other |
– |
1 | ||||||
Total business and government (1) |
527 |
432 |
Table 11: |
Changes in Allowance for Credit Losses – by Geography (2) |
($ millions, except as noted) | Canada | United States | Other countries | Total | ||||||||||||||||||||||||||||
As at October 31 | 2023 |
2022 | 2023 |
2022 | 2023 |
2022 | 2023 |
2022 | ||||||||||||||||||||||||
Allowance for credit losses (ACL), beginning of year |
||||||||||||||||||||||||||||||||
Consumer |
851 |
907 | 173 |
133 | – |
– | 1,024 |
1,040 | ||||||||||||||||||||||||
Business and government |
797 |
792 | 1,162 |
1,111 | 15 |
15 | 1,974 |
1,918 | ||||||||||||||||||||||||
Total ACL, beginning of year |
1,648 |
1,699 | 1,335 |
1,244 | 15 |
15 | 2,998 |
2,958 | ||||||||||||||||||||||||
Provision for credit losses (3) |
||||||||||||||||||||||||||||||||
Consumer |
789 |
268 | 437 |
45 | – |
– | 1,226 |
313 | ||||||||||||||||||||||||
Business and government |
124 |
48 | 845 |
(43 | ) | (9 |
) |
(7 | ) | 960 |
(2 | ) | ||||||||||||||||||||
Total provision for credit losses |
913 |
316 | 1,282 |
2 | (9 |
) |
(7 | ) | 2,186 |
311 | ||||||||||||||||||||||
Recoveries |
||||||||||||||||||||||||||||||||
Consumer |
121 |
105 | 63 |
60 | – |
– | 184 |
165 | ||||||||||||||||||||||||
Business and government |
26 |
– | 55 |
50 | – |
– | 81 |
50 | ||||||||||||||||||||||||
Total recoveries |
147 |
105 | 118 |
110 | – |
– | 265 |
215 | ||||||||||||||||||||||||
Write-offs |
||||||||||||||||||||||||||||||||
Consumer |
(621 |
) |
(390 | ) | (196 |
) |
(69 | ) | – |
– | (817 |
) |
(459 | ) | ||||||||||||||||||
Business and government |
(83 |
) |
(51 | ) | (289 |
) |
(102 | ) | – |
– | (372 |
) |
(153 | ) | ||||||||||||||||||
Total write-offs |
(704 |
) |
(441 | ) | (485 |
) |
(171 | ) | – |
– | (1,189 |
) |
(612 | ) | ||||||||||||||||||
Other, including foreign exchange rate changes |
||||||||||||||||||||||||||||||||
Consumer |
(66 |
) |
(39 | ) | (15 |
) |
4 | – |
– | (81 |
) |
(35 | ) | |||||||||||||||||||
Business and government |
(40 |
) |
8 | 112 |
146 | 16 |
7 | 88 |
161 | |||||||||||||||||||||||
Total other, including foreign exchange rate changes |
(106 |
) |
(31 | ) | 97 |
150 | 16 |
7 | 7 |
126 | ||||||||||||||||||||||
ACL, end of year |
||||||||||||||||||||||||||||||||
Consumer |
1,074 |
851 | 462 |
173 | – |
– | 1,536 |
1,024 | ||||||||||||||||||||||||
Business and government |
824 |
797 | 1,885 |
1,162 | 22 |
15 | 2,731 |
1,974 | ||||||||||||||||||||||||
Total ACL, end of year |
1,898 |
1,648 | 2,347 |
1,335 | 22 |
15 | 4,267 |
2,998 | ||||||||||||||||||||||||
Net write-offs as a % of average loans and acceptances (4) |
un |
un | un |
un | un |
un | 0.15 |
0.08 |
(1) | Amounts exclude Allowance for Credit Losses related to off-balance sheet instruments, which are reported in Other Liabilities. |
(2) | Segmented credit information by geographic area is based upon the country of ultimate risk. |
(3) | Excludes provision for credit losses on other assets. |
(4) | Aggregate Net Loans and Acceptances balances are net of allowance for credit losses on performing loans and impaired loans (excluding those related to off-balance sheet instruments). |
BMO Financial Group 206th Annual Report 2023 | 133 |
Table 12: |
Provision for Credit Losses – Segmented Information |
($ millions) For the year ended October 31 |
2023 |
2022 | ||||||
Consumer |
||||||||
Residential mortgages |
19 |
7 | ||||||
Cards |
366 |
190 | ||||||
Consumer instalment and other personal loans |
379 |
151 | ||||||
Total consumer |
764 |
348 | ||||||
Business and Government |
||||||||
Commercial real estate |
60 |
2 | ||||||
Construction (non-real estate) |
37 |
20 | ||||||
Retail trade |
113 |
4 | ||||||
Wholesale trade |
31 |
7 | ||||||
Agriculture |
(50 |
) |
(2 | ) | ||||
Communications |
1 |
(5 | ) | |||||
Financing products |
– |
– | ||||||
Manufacturing |
37 |
10 | ||||||
Mining |
(6 |
) |
5 | |||||
Oil and gas |
(10 |
) |
(32 | ) | ||||
Transportation |
69 |
(7 | ) | |||||
Utilities |
– |
1 | ||||||
Forest products |
2 |
– | ||||||
Service industries |
92 |
133 | ||||||
Financial |
14 |
16 | ||||||
Government |
– |
– | ||||||
Other |
26 |
2 | ||||||
Total business and government |
416 |
154 | ||||||
Total provision for credit losses on impaired loans |
1,180 |
502 | ||||||
Provision for credit losses on performing loans |
998 |
(189 | ) | |||||
2,178 |
313 | |||||||
Performance Ratios (%) |
||||||||
PCL-to-average net loans and acceptances |
0.35 |
0.06 | ||||||
PCL on impaired loans-to-segmented average net loans and acceptances |
||||||||
Consumer |
0.28 |
0.15 | ||||||
Business and government |
0.12 |
0.05 | ||||||
PCL on impaired loans-to-average net loans and acceptances |
0.19 |
0.10 |
Table 13: |
Average Deposits |
2023 |
2022 | |||||||||||||||
($ millions, except as noted) | Average balance |
Average rate paid (%) |
Average balance |
Average rate paid (%) |
||||||||||||
Deposits Booked in Canada |
||||||||||||||||
Payable on demand – interest bearing |
51,830 |
4.24 |
51,184 | 1.09 | ||||||||||||
Payable on demand – non-interest bearing |
71,789 |
– |
84,280 | – | ||||||||||||
Payable after notice |
125,664 |
3.03 |
130,812 | 0.90 | ||||||||||||
Payable on a fixed date |
292,597 |
4.11 |
205,284 | 1.74 | ||||||||||||
Total deposits booked in Canada |
541,880 |
3.33 |
471,560 | 1.13 | ||||||||||||
Deposits Booked in the United States |
||||||||||||||||
Payable on demand – interest bearing |
17,837 |
3.30 |
8,856 | 1.02 | ||||||||||||
Payable on demand – non-interest bearing |
26,656 |
– |
10,699 | – | ||||||||||||
Payable after notice |
164,149 |
1.74 |
139,952 | 0.29 | ||||||||||||
Payable on a fixed date |
71,643 |
4.43 |
63,047 | 0.94 | ||||||||||||
Total deposits booked in the United States |
280,285 |
2.36 |
222,554 | 0.49 | ||||||||||||
Deposits Booked in Other Countries |
||||||||||||||||
Payable on demand – interest bearing |
178 |
2.53 |
318 | 0.77 | ||||||||||||
Payable on demand – non-interest bearing |
44 |
– |
73 | – | ||||||||||||
Payable after notice |
2,161 |
4.27 |
1,486 | 0.87 | ||||||||||||
Payable on a fixed date |
41,259 |
4.35 |
31,703 | 0.91 | ||||||||||||
Total deposits booked in other countries |
43,642 |
4.34 |
33,580 | 0.91 | ||||||||||||
Total average deposits (1) |
865,807 |
3.07 |
727,694 | 0.92 |
(1) | Average deposits payable on a fixed date included $88 million, $44,520 million and $17,664 million of federal funds purchased, commercial paper issued and other deposit liabilities, respectively, as at October 31, 2023 ($101 million, $27,287 million and $17,394 million, respectively, as at October 31, 2022). |
134 |
BMO Financial Group 206th Annual Report 2023 |
• | Adjusted Revenue non-recurring items, and adjusted net revenue is adjusted revenue, net of CCPB. |
• | Adjusted Provision for Credit Losses non-recurring items. |
• | Adjusted Non-Interest Expensenon-interest expense excluding the impact of certain non-recurring items. |
• | Adjusted Effective Tax Rate |
• | Adjusted Net Income non-recurring items. |
BMO Financial Group 206th Annual Report 2023 | 135 |
136 |
BMO Financial Group 206th Annual Report 2023 |
• | Commodity swaps |
• | Credit default swaps |
• | Cross-currency interest rate swaps |
• | Cross-currency swaps |
• | Equity swaps |
• | Interest rate swaps |
• | Total return swaps |
BMO Financial Group 206th Annual Report 2023 | 137 |