Q3 2022 Bank of Montreal Earnings Call

ipens, Please continue to stand by. The conference will begin more ly one again. Please continue to stand by. We thank for year pation con business. The best it.ents, Please continue to stand by. The conference will begin. ly one again. Please continue to stand by. We thank for year pation pre business the. This conference courted Re all standend by eighting to begin V that this conference call being recorded morning and while come to be signancial. Group three to 2022 D? ninging ities and conference call G 30 to thousand 22 ST today teen Co ahead. Thank and good moring. We will begin to call with remarks from most C O? Ed by our chie financial office and act pro our RIS conice there also pres to ATE questions hand from Canadian P N C, from U's P C ly from be capital markeket and alth management as noed on F two for lookinging statements may be may jaring this call which the mptions that have risk and UN certain P actual results could for materially from the statement. I would also remind listen ERS of the bank usees non financial measures to arrive adjusted resul management measures. Performance reported in adjusted bases in consiters both to be use under line will be refering to adjusted sults in their remarks. Less other W noted as reported and with. I will turn the call over to. Thank you ch? Teen and good morning every one our performance this quarter continue to demmon trate the streng and quality of our advanted and di? ver iness mix credit ex? llence and the reilillions of our earnings power. Third quarter adjusted earnings for share were $3 and nine sent, driven by a very strong performan in our North America P? N C businesses bust long growth and March marg expanion D record revenue and over 15% pre provision pretax earnings growth in both Canadian and's P? C more than offseting lower revenue and capital marts, which was impacted by more challenge market conditions. While the economic environment remains UN certain, our signs that Central Bank actions AED that taming inflation are havinging in effectact, while economic activity is moderating on employment and still high consumer and business saving are likely to provide some buffer for the down in the contex of slower growth. The Canadian and U's economies. We our operating from a position of strenank credit remains 9, with strong reerves for lolong losses, to which we added modest this quarter year. Our consistent P P P T performance positions us to support customers while delivering growth through the cycle. The year to date P P P T of nine point one billion is up 7%, with one point 5% operating leverage and efoffficiency ratio of 55%, while oper verage this quarter was impacted by underwrating K downs due to changing market ition and sevenverance and capital markets. We continue to expect to deliver positiveof operating leverage four the year. Year to dateour E with 16% above our mid term target. As we remain focus on driving in proved returns and manageing the bank for sustained growth, acttively managing our capital position thousandancecing the dyamic environment to support client driven balanes and the pending acquition of Bank of the West, we expect post clossinging our C? T one ratio to build ly above leven percent during Q2. 2020 three we continue to make sign significant progress and building a high performaning digally enable future readyy bank and believe that our Re? ent less focus on employ engagagement and customer loyalty is the key to the health our organization and will deliver sustained advantage over time. Our highly engaged be team is acttivating our winning culture, lineed to a one client, one bank proach, which has been a key contributtor to reseting the bank performance to a higher level in a recent conprehhands of high permance culturalal employe surve a results pro from the third to the first Court, placing us among the world best financial institutions. The results are testimment to our focus on a culture that CRE conditions for sustained performance and dire deferferentiates us in atracting and retaining the best town. Our commitment to providing our customers with exceptional experience and personalized Vice in every interaction is now driving world class client loyalty. This quarter we rece the highest customer sat faction R ranking in the J? J power two thousand and 22 Canada their retail banking ADV sat factions that reclaiming the top among Canada largest banks. In addition, we were again recordgnized by world finance bag ine as the best commercial, private and reta bank in Canada. These recognions reflect the investments were making a across our businesses with exexpanded teams and hanced digital and marke capabilities that are driving record new customer acquisition in our North America personal and business bkinging businesses introducing new products to help customers progress, including our mark money accoun, which offers low FE and no over draft or N's F charges's customers. And Canada same dayate grace the newly launed B and online bking feuture. The pro Act of helps customers manage their cash balance and a void missing payments. Our North American commercial banking businesses: our delivering strong long growth- 16% and Canada and 15% in the? U's. Growth is broad based and has beendriven by the quality and reputation of our experience bankers with local market in inddis three exper T who bring the full stren most capabilities and provide out stand client service and quick execition, all of which under P by a defer? tiated risk culture and a consistent risk AP Ty, that is, deliver strong credit quality. Over time. The resullt be seen in the consistently strong performance of our? C businesses, with P leadating year to date: P P? P growth of 15% and Canada and aeleven percent in the? U's ING ongoing strategic investments and positiveof operating leverage investments in our high return North America. We businesses deliver good underlying revenue growth, the ite market clients and a moderation of client trating activity, with growth in new client assets, loans and deposits. Last bring introduced a broad we to threeree tradeity T F to, together with hanced invest education. Year later, this offer is driving strong new client acquposition and growing E T F assets on the plat form. Our asset management business were expand our Canadian franchise, adding more than 50 experience investment ofes.sionals key growth areas, including our global equidity team, who focus on delivering higher returns for our clients. Capital Markets results: this quarter were impacted by the market condions and lower client activity. Our well the vers if five businesses have deliver an average of over 600 and 30 million dollars of P? P P? T over the last four arterters and remain position to build on the inestments we made to expand capabilities and growth. Client relation sh: this quarter we further advanced leadership position, sustainedabilility and our cliate am? ition to beour client lead partner in the transition to a zer world. The nounced acquis of radical group will make a leader carb credit development capabilities and the environmental commodity market. The advantage of our diverse business mix also evidident in theperformance of our U's G overall, which has consistently contributing in the range of Ty 5% of the bank earings. With a year to date we and efoffficien that is in line with the bank. Overall we remain strongly position for the ition of the bankof the W. as we continue to grow the bank, our purpose driven commitments to a driving economy, a sustainable future and inclusive society remain our guid princiable. This quarter was once Ed to corporate ranking of Canada. 50 vbest corporate citizions rank first among major Canadian banks. To includued our high permanceing bank is well position for an involving economic environment with the proven track record of superior risk management, strong capital and liquidity in engaged ployees and Loy customers. We continue to strategically invest for growth, to deliver long term returns for our Re holders and a enable progress the communities we serve, including preparing for the closinging and into gration of our acquisition of Bank of W. now turn over to Ty. Thank good morning and bank joining uss. My comferenments will start on Slide no. Third quarter reportof P's was dollar nineiny five net was one point four billion. Adjusting ite our sho on SL forty one and includde the impact of fair value management activities related to the acquisition of Bank of the West, which this quarter rereduuse net by 600 nineinety four million to changes and interest raates pared the prior courar and remain by comments. Focus on aadjusted results. On adjusted bases P's was $3 and ninein sent and net was two point one billion. two point three billion. Last year performance in our C businesses was very strong with aadjusted year over year pre provision pre tax earnings growth of 15% in Canada and 16% in the U's, as continue strong LO growth and marg exexpan he grow revenues at ouble digions revenue quarter is a record in both businesses. Continue mar environments. Lower results in cap markets, including the impact of sevenver costs, and Mark downs on LO commitments made earlier in the year. Higher P C's ly indiccation quarter date. Our more constructive total was one hundred 30, six million, including 30, two million provision, four perforing loans. comparedred a total recover of seven to million dollars in the prior year act in his remarks ving the on Slide 10 LO growth Act sellleated 14% year over year and 4% courarter over quarter.