Bank of Montreal (BMO) Q3 2024 earnings summary

Executive summary

• Record pre-provision, pre-tax earnings of CAD 3.5 billion, up 8% year-over-year, with positive operating leverage and strong deposit growth; U.S. segment contributed 36% to adjusted earnings.

• Adjusted net income for Q3 was CAD 2 billion, down 8% year-over-year; reported net income was CAD 1.9 billion, up 19% year-over-year.

• Adjusted EPS was CAD 2.64, down from CAD 2.94 year-over-year; reported EPS was CAD 2.48, up from CAD 2.12.

• Quarterly dividend declared at $1.55 per share, unchanged sequentially and up 5% year-over-year.

• U.S. segment delivered $1 billion+ PPPT for sixth consecutive quarter.

Financial highlights

• Adjusted EPS was CAD 2.64, down $0.30 year-over-year; adjusted net income down 8% year-over-year.

• Provision for credit losses (PCL) rose to $906 million (54 bps), with impaired provisions at 50 bps.

• CET1 ratio at 13.0%, up from 12.3% year-over-year, reflecting a strong capital position.

• Adjusted operating leverage was 5.2% for the quarter; adjusted efficiency ratio improved to 57.3%.

• Average loans grew 6% year-over-year, deposits up 9% (customer deposits up $74B or 12%).

Outlook and guidance

• Expect positive operating leverage for the full year, with credit provisions anticipated to remain elevated for the next 1-2 quarters before trending toward long-term averages through 2025.

• Canadian P&C NIM expected to tighten, U.S. P&C NIM to be modestly higher; year 2 benefit to rising rates estimated at ~$600MM.

• Capital position expected to remain above 12.5% management target; medium-term ROE target remains at 15%.

• Management expects continued sustainable returns, supported by a strong balance sheet and robust capital and liquidity.

• Forward-looking statements caution that economic and market conditions, regulatory changes, and credit quality remain key uncertainties.