The group says that its dividend on paid-up common shares will be the same as the previous quarter
BMO Financial Group posted a strong set of quarterly results for the first quarter of 2022.
The big six bank revealed its financials before the bell Tuesday showing that recorded net income for the three months ended January 31, 2022, was $2,933 million or $4.43 per share on a reported basis; and was $2,584 million or $3.89 per share on an adjusted basis.
These figures are up 45% and 27% respectively compared to the same period of 2021.
Chief executive Darryl White says that the bank’s performance is underpinned by strong risk management and excellent credit quality.
"We continue to build on our operating momentum and delivered another quarter of very strong earnings, driven by our Canadian and U.S. Personal and Commercial businesses, including accelerating commercial loan growth, and ongoing strength in BMO Capital Market,” he said. “The targeted investments we are making in talent, technology and marketing are delivering stronger revenue growth, improved efficiency and return on equity."
The group saw some significant events in the quarter including the divestment of its EMEA asset management business, the sale of its private bank business in Hong Kong and Singapore, and the agreement to acquire Bank of the West.
White said that BMO is responding to the challenges of sustainability and is proud of its moves towards helping clients transition to a net-zero world.
"Our proven, diversified business model is consistently delivering strong returns for our shareholders. We are investing in our businesses and executing on our Purpose-driven, Digital-First strategies aimed at helping our customers make real financial progress, and positioning us for continued growth while strengthening our capital position in advance of closing our acquisition of Bank of the West," he concluded.
BMO declared a quarterly dividend of $1.33 per share on paid-up common shares for the second quarter of fiscal year 2022, unchanged from the prior quarter.
Wealth Management
For the banking group’s wealth management business, reported net income was $315 million, compared with $336 million in the prior year, and adjusted net income was $316 million, compared with $344 million in the prior year.
Traditional Wealth reported net income was $261 million, an increase of $5 million or 2%, and adjusted net income was $262 million, a decrease of $2 million or 1%, with strong underlying revenue from growth in client assets, including stronger global markets, more than offset by higher underlying expenses and the impact of divestitures.
Insurance net income was $54 million, a decrease of $26 million from the prior year, primarily due to less favourable market movements in the current quarter relative to the prior year.
Capital markets
For Capital Markets, reported net income was $705 million, an increase of $227 million or 47% from the prior year, and adjusted net income was $712 million, an increase of $228 million or 47%. Reported and adjusted results were driven by continued strong revenue performance, with higher revenue in Investment and Corporate Banking driven by particularly strong underwriting and advisory revenue and in Global Markets driven by elevated client activity, higher expenses, including higher performance-based compensation, and a recovery of credit losses in the current quarter compared with a provision in the prior year.
Other divisions
- Canadian P&C: Reported and adjusted net income was $1,004 million, both increasing $254 million or 34% from the prior year. Results were driven by a 15% increase in revenue, with higher net interest income and non-interest revenue, higher expenses and a lower provision for credit losses compared with the prior year.
- US P&C: Reported net income was $681 million, an increase of $102 million or 18% from the prior year, and adjusted net income was $682 million, an increase of $96 million or 16%. The impact of the weaker U.S. dollar reduced net income, revenue and expense growth by 1%, respectively.
- Corporate services: Reported net income was $228 million and adjusted net loss was $130 million, compared with a reported and adjusted net loss of $126 million in the prior year. Reported results reflected the impact of the announced acquisition of Bank of the West and divestitures related to the sale of our EMEA Asset Management business, while adjusted results were relatively unchanged.
