Earnings Highlights and Review: Bank of Montreal Posted Healthy Q2 Results

Research Desk Line-up: Royal Bank of Canada Post Earnings Coverage

LONDON, UK / ACCESSWIRE / June 13, 2017 / Pro-Trader Daily publishes post-earnings coverage on Bank of Montreal (NYSE: BMO) following the Company’s release of its financial results for the second quarter fiscal 2017 (Q2 FY17) on May 24, 2017. The Toronto, Ontario-based bank’s quarterly adjusted net income and adjusted EPS rose 12% and 11% y-o-y, respectively. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member’s account at:

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Earnings Reviewed

During the quarter ended on March 31, 2017, Bank of Montreal’s total revenues came in at $5.74 billion, up from $5.10 billion in the year ago same quarter. The Company’s revenues, net of commissions and changes in policy benefit liabilities (CCPB), grew to $5.03 billion in Q2 FY17 from $4.69 billion in Q2 FY16.

The Canadian bank reported net income of $1.25 billion, or $1.84 per diluted share, in Q2 FY17 versus $973 million, or $1.45 per diluted share, in Q2 FY16. Adjusted net income for the reported quarter was $1.30 billion, or $1.92 per diluted share, against $1.15 billion, or $1.73 per diluted share, in the year ago comparable period. The quarterly adjusted net income numbers beat analyst’s expectations of expected adjusted net income of $1.40 per diluted share.

Performance Metrics

In Q2 FY17, Bank of Montreal’s adjusted return on average assets came in at 0.73% compared to 0.67% in the previous year’s corresponding period. The Company’s adjusted return on common equity was also up to 13.1% in Q2 FY17 from 12.1% reported in the year ago same quarter. Furthermore, the bank’s adjusted efficiency ratio, net of CCPB, was 63.8% in Q2 FY17 compared to 65.2% in Q2 FY16. The bank’s net interest margin on average earning assets for the reported quarter stood at 1.52% compared to1.61% in Q2 FY16.

As on March 31, 2017, the bank’s common equity tier 1 ratio was 11.3% compared with 9.7% as on March 31, 2016. Additionally, tier 1 capital ratio and total capital ratio stood at 12.8% and 14.9%, respectively at the end of FY17.

Segment Performance

For the reported period, Canadian P&C total revenues grew to $1.72 billion from $1.67 billion in Q2 FY16. The segment net income also increased to $531 million in Q2 FY17 from $525 million in the last year’s comparable quarter.

US P&C segment’s total revenue stood at $1.16 billion in Q2 FY17 compared to $1.15 billion in Q2 FY16. During the quarter, the segment recorded net income of $248 million compared to $268 million in Q2 FY16. The segment’s adjusted net income for Q2 FY17 came in at $260 million versus $280 million in Q2 FY16.

In Q2 FY17, BMO Wealth Management segment’s revenue was $1.86 billion compared to $1.40 billion in Q2 FY16. In the reported quarter, net income was $251 million, up from $134 million in Q2 FY16. Moreover, adjusted net income also increased to $272 million during Q2 FY17 from $158 million in Q2 FY16.

BMO Capital Markets segment reported total revenue of $1.20 billion in Q2 FY17 compared to $1.06 billion in Q2 FY16. The segment’s net income increased to $321 million in Q2 FY17 from $287 million in Q2 FY16. Furthermore, adjusted net income for Q2 FY17 stood at $322 million.

Dividend

In a separate press release on May 24, 2017, Bank of Montreal’s Board of Directors raised the quarterly dividend by $0.02 per share to $0.90 per common share. The dividend on the common shares is payable on August 28, 2017, to shareholders of record on August 01, 2017.

Stock Performance

At the closing bell, on Monday, June 12, 2017, Bank of Montreal’s stock rose slightly by 0.22%, ending the trading session at $69.90. A total volume of 710.53 thousand shares were traded at the end of the day, which was higher than the 3-month average volume of 495.79 thousand shares. In the last month and previous twelve months, shares of the Company have advanced 1.28% and 7.34%, respectively. Shares of the Company have a PE ratio of 11.88 and have a dividend yield of 3.78%. The stock currently has a market cap of $44.96 billion.

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