Bank of Montreal (BMO) 24 Aug 212021 Q3 Earnings call transcript

Good morning and welcome to the BMO Financial Group's Q3 2021 Earnings Release and Conference Call for August 24, 2021.

Your host for today is Mrs. Christine Viau, Head of Investor Relations. Mrs. Viau, please go ahead.

morning. good and you Thank Welcome to presentation. XXXX third quarter results BMO's

Pat from call BMO's Capital Management. Rotenberg our We are Risk Ernie and Dave questions the BMO Canadian from to remarks Also Chief our Darryl BMO present from Officer. Officer; Johannson Tuzun, will begin from today Tayfun Joanna U.S. with Wealth P&C; White, Markets; take Barclay Chief and by CEO, Financial P&C; from Cronin, Casper followed Dan

statements reported results may considers the listeners I'll be involve will statements. unless their forward-looking made on basis assessing materially otherwise noted adjusted during inherent reported. in useful noted financial performance in which both now, to two, As also that be on these call, to be business assumptions non-GAAP measures performance. results, uses turn risks and measures and this underlying slide remind as from bank remarks call would adjusted over I results and management could to a have the adjusted Darryl. Darryl that arrive to uncertainties. referring Actual differ at Tayfun and And

long-term in strategy and delivering and to loyalty deployment; and announced Thank strategy product of an mix communities The good purpose-driven wellbeing for advice; our last customer to one, two, leading share execution businesses digital drive and commitment Operating capabilities, profitability; our differentiated of diversified morning, employees actions drivers business of risk and $X.X customers increasing the performance recovery are key economic time; per our very and $X.XX of well-positioned for growth our income the net consistent to strong innovation, performance number through continue support $X.XX, financial allocation, three, through purpose-driven four, quarter. up a on and capital the and efficiency and driving execution earnings targeted of strong capital and reflect consistent steadfast number advantaged credit number our from returns number momentum and financial customer-facing you, improve consistent diversified focus over beyond. drive financial performance. of we and flexibility consistent across everyone. and and Christine, management the Today, and investment at billion,

financial consistent continue Our inclusive to on thriving economy, sustainable us an a to performance long-standing support build allows society. with commitment acting to And future, our and we're urgency. and purpose a

have barriers the in impact inclusion advance to that announced BMO U.S. Program services of cost. that communities to work with Banking commitment on needs. change. to at affordable by extended we Wellness aspiration our This a breaking down economic clients we've providing removing On-certified supporting housing Canadian We're additional to the Smart financing all towards new Bank historically a quarter, dedicated of Canadians billion products also barriers XX-year they address health, and and We're no safe of to access body focused In home financial our across the for segment including Account. a Canada, the Assistance can Lifeworks Canada, and institutions, mental affordable continuing climate $XX support afford their significant Business Harris in meets to underserved financial

of creation the to support Capital to This in transition and of Energy clients quarter, BMO Markets provide energy Group tools, announced pursuit knowledge, dedicated Transition opportunities. a their

scores received top the sustainable clean XX recognized board quartile well were future Knights' to Best in first investment, executive among of Canadian clean Corporate banks, again commitment gender building as as Canada's we Citizens. a in diversity, Ranked Our Corporate ranking revenue. diversity,

leverage of adjusted year, $X.X from pre-tax increase with up operating and year-to-date earnings basis, a delivered X.X%. pre-provision on performance, XX%, last revenue of strong financial our to an now billion, Turning we XX% of

to set approach actions growth, ratio year by management force, our the to after on At be expense in technology. position including or We optimize business have And time, to remain and drive leverage allocation. marketing, we year going XXXX, with making the capital in target efficiency X%, further from our with just year-to-date in an efficiency XX.X%. and made including of we've focused Day, are costs. XX% to higher that our X% reached forward, investments operating excluding positive same efficiency and delivering we've declined Even goal for performance-based We targeted taken of At improvements. this investments, benefit XXXX. strategic expenses continue year-to-date up sales we're to disciplined a those resource We better early. progress Investor

landscape poised in and at navigate beginning strong, way year, Engaging service. the We're U.S., economy a higher very and this expected common variants the efficiency partnerships built bank, We're an better, and labor lifting continuing capabilities, have of the is savings and GDP those lending and credit this the productive pandemic-related lead low evolving in continues provisions our digital-first to part and AI relaxing virus isn't chain accelerating pent a the in and restrictions. rates and returning a coming Despite on decades. improvement. for strengthen of the grow, in and with the profitability, our CETX embracing ongoing activity every to With to quarter remains as is remain loyalty, a now will strong shown this economies change also growth climb, transformation. XX.X%, XXXX, Canada grow issues, emergency cloud, of supply operate technology vaccination with capital U.S. future with we target, growth for constraints demand spend. the and as remarkable and data, consumer for it's With above was X% foundation leading and and user-friendly our X% in card to discuss. of increasing and Return channel quality this and to credit is strongest Canadian resilience around and customers already The uncertainty equity XX.X%, of positioning X% position impaired business. ratio quarter. eventual are Small seeing again Our Digital us capital with driving commercial on up shareholders. just and well XXXX. of platforms faster X.X% is in Tayfun to the businesses BMO, tools, digital year back, in to

This service to digital quarter, we provider our and platforms selected applications. strategic cloud modernize build AWS as further financial banking

U.S. In technology addition, in a major experience to customers, FIS, mobile, multi-year expanding program U.S., with our personalized solutions across account them the HSA We're financial health also digital working that relationship we're with tackle modern and industry-leading with with in an growth modernization leader, Lively, bring costs. savings supporting the tools markets. continued healthcare a accelerates providing to solutions financial provider to U.S., rising

We a and focus sales. on advice capabilities series to deploy and shifting of continue while service transactions offers employees to our to allowing market-leading digital,

dollars, continues With an U.S. a driver trillion we're earnings to outside bank the over We're of up Pre-provision, XX.X%. be total to which ratio XX% and in of scale year-to-date, our nationally an Midwest North approaching leader with me coming continuing of our to efficiency with XX% of earnings integrated segment, were sheet advantage from our a across revenue earnings balance growth platform, footprint. XX% a which build brings American growing the Midwest year-to-date. pre-tax contributing

value approach BMO scale to of customers. and North Our American integrated full our the brings

the to bank, and the of ROE, part growing each are fastest opportunities growth and comparable of to and a expand with an the efficiency strong operating significant. year-to-date leverage. accretive our positive businesses growth continue On delivered As basis, share PPPT

balanced peer growth leading and is supported business delivering Flagship diversified of lending performance, P&C products growth. mortgages, Our across Canadian checking was XX% PPPT strong growth continued saving consumer and year-to-date commercial by

balances customers financial up digital In year-to-date, commercial P&C, progress. to experience ease. digital to core and in real chain PPPT XX% and accelerate We commercial more helping and see shown make drive momentum we've continue deposits the growth and and are expect economy supply as strengthen was to retail pipelines top-tier issues core continuing lending strong expands U.S. in capabilities checking sales,

and operations continuing had indicators. banking and experience add in more with quarter, four ETF Orlando, In Denver economic added commercial quarter, our Asset PPPT we're And and very all we in This We're mutual than deepen Management We're times investing. expanding of areas we Management, year to Wealth new strong strong in and offices BMO year-to-date. demographic a XX% best-in-class relationships. digital and key leading areas year-to-date wealth, with investing Canadian competitive in of was growth fund flows. sales last private delivering strength clients

now us conclude, perform over Investment a experience. continue commission source results. one trading and our economy investment. BMO the to are self quarter line communities employees our This for years To normalizing thriving in long-term the equity digital elevate revenue for banking financial repositioned sustainable offering robust quarter and and performance. free XX league of to business we customers, more in made bank of began inextricably and quarter, and value. inclusive BMO The M&A performance to overall further delivering very to a have strong third continued an investments enabling the Capital earnings I'll growth an quarter, support society supporting markets than a Markets And talk client's BMO a and portfolios. to in turn sustained second and enhancements we've well-diversified is to well build it how Tayfun directed we about over of our PPPT markets investor conditions. Global financial to our introduced investors XX% actions year-to-date ETFs market linked, our commitment and was strengthened our another that capital shareholder important tables. diversified year-to-date believe had had deliberate the in record drive personalize ranked number in environment, few Canadian consecutive will corporate future, past is trading the

Darryl. start X%. reported was was was on $X.X quarter $X.XX $X.X $X.X us. third was efficiency Thank growth, you billion. EPS billion thank billion net Adjusted year, by EPS I strong earnings and morning adjusted Good improved income and Slide net will a for my Sequentially, and provisions. from last income $X.XX joining XX, revenue and driven up you, lower comments increased

on adjusted at quarter prior from improved was the ratio very the up return efficiency strong and to XX.X%, X.X% Third year, in equity XX.X%.

divestitures revenue $XX our and from items operating slide shown from million was good with leverage compensation. on of year, XX.X% mainly million Adjusting performance Net up to XX% groups. has this X% by the each in reversal positive leverage. fourth over operating this Adjusting strong enabled of maintaining partial offset $XX of from a related to quarter, severance expenses the of growth continue quarter future across invest restructuring operating Efficiency are was billion, items while increased Expenses growth include based positive quarter higher Our $X.X last of year impact recorded reflecting charges XXXX for to performance us XX. after-tax. after-tax improved to last X.X%.

we had Pat million the quarter, credit $XX provision recovery This of a for performing in million, loans credit his provision of which will on impaired $XX a loans losses included million remarks. losses $XXX a total in these for to speak and recovery

sheet the portfolio, while weaker balance flat to slide down rates loans consumer on X% increased down due Canadian year-over-year U.S. through utilization declined growth to government dollar. average excluding of continued Moving mortgage strong of lower loans P&C. the loans due and impact wind and and XX, energy the the in were Business non-Canadian

liquid basis, indicator momentum last sheets. accelerating year-over-year were reflecting up X% deposits and and As compared and and up highly showing on period customer of recent quarter X% balances loan to Average X% the a more growth, consumer are up balance a loan quarter. corporate linked were

loan averaging businesses. Looking digits in to in recovery ahead, mid both economic expect place growth the single P&C we takes our as accelerate,

to up capital, reflecting XX.X% continued X position very of impact XX to capital Moving this from slide Tier the ratio XX strengthen capital The strong XX% quarter, for generation. predominantly equity in internal was common basis quarter. second points the our

growth higher quality business the reduction modestly by multiplier unwinding changes. Source risk in market in an positive increase of and risk by were assets OSFI's were asset temporary SVaR driven currency weighted the quarter-over-quarter offset as largely

continue to grow the capital We to management on expect actions. capital regulatory constraints ratios given our

X% while points in Treasury. sequential a businesses. in lower basis, by risk was U.S. from growth, flat decline was basis last the driven to modestly deposit prior of and interest earning XX, was the in both P&C loan lower of and funding basis, on loan Canada, to activities and reflecting margin margins trading income ex Total bank trading net the due margins, asset In up deposit two of the higher net hedging, down forgiveness. accelerated slide margin partially by quarter, rate interest year NIM. PPP interest relatively offset from investment an the from Turning revenue and On benefits impact impact was ex was up

revenue over shown is to a interest on benefit basis in on impact short short-term slide rate sensitivity impacts. income rate next XX shock increase million basis net as by rates our XX XX, point slide, by deposits the to yields. to that the interest to by we and no reinvestment higher XXX driven two-thirds, The over We the XX to rate a surge would Moving expected $XXX significantly over add second-year from months of point retained rates and if driven rising over million rising $XXX assume benefit higher the deposits. months. rates to primarily at benefit would be These be capital these hired sensitivities of benefit next revenue would deposits,

lower increased activity, gains on higher investments, an XX%, net on of Services, in was basis, a up XX, in the our in non-interest partially Corporate fund quarter, customer X% driven Year-over-year including on groups mutual offset X% operating fees. rebound revenue and fees, investments advisory primarily prior and from revenue. CCPB and higher to by revenue up and ex-trading underwriting by Turning gains and revenue securities slide and reflecting non-interest card markets commissions

growth we our businesses. very are some future in we may non-interest lines, capacity Although, pleased underlying strengths with generating revenue quarter-to-quarter fee volatility the across of all see and

the were Moving quarter, more X% year-to-date increased by counts primarily and were compensation impact variable performance-based and higher facing technology sales days performance expenses reflecting costs collective a the XX, impact compensation, in up expenses On Expenses current X% up roles. the stronger of compensation, spent. to of excluding higher declined X.X%. client basis in year-over-year, and performance-based related slide driven head the quarter-over-quarter, advertising

we in campaigns. including generating our the grow have revenue technology achieved quarter, we to modernize While continued sub to invest our and capabilities, efficiency company this XX% our ratio to sales

leverage confidence we while optimize strategic a to highly ahead, in investing see focused growth opportunistically and efficiency our that growth, achieve operating businesses as As all our we result look will of good for we opportunities very and positive management. expense actions

term including Operating Average leverage the business, from sales last roles, X% spent. the efficiency operating from and net residential growth continued P&C Deposits to Moving X% Revenue and was year-over-year, the $XXX Canadian continued last was income XX. were The up credit losses X.X%, in starting in year, and $XXX technology facing pre-tax pre-provision up groups reflecting slide from prior earnings by up of XX% $XX strong was the million XX%. on strength higher in income retail investments lower cards year with business in most Non-interest were reflecting customer marketing investments good year Expenses and related was accounts prior revenue and and ratio revenue. growth growth for non-interest core from strong reflecting interest in was client loans X% both reflecting activity. across revenue on and in XX.X%. net including were up categories quarter, and X% and up growth gains increased X% deposits. million. offset provision lending, commercial commercial our reflecting up million, loans.

leverage earnings Moving and X.X%. to performance. $XXX XX.X%. growth results million, non-interest up my X% year, were from year, reflecting speak the U.S. and reflect efficiency here to was $XXX million Net and interest from growth year. positive compared X% will Revenue up income income net last P&C prior to operating last dollar pre-provision to the on in well-managed, in improved revenue. of both Expenses Strong comments was in XX, pre-tax slide XX% U.S.

down prior year-over-year. coming balance stronger There balances X% total growth was and year-over-year, excluding loans loan deposits signal quarter, from On average increased losses quarters. of a PPP $XX were recovery likely up Average a of the which in commercial the or loans, credit X% million. impact loan although the for sheet, were is X% period

$XX had of costs year. slide the from million, Insurance from markets. based to income to were due income XX% business. the including very prior in prior higher net and up $XXX XX, due X% up investments Moving million, was XX% higher last results WEALTH year. XX% income year net in million, $XXX management global wealth stronger growth client strong with was revenue up Expenses assets, up the net reflecting revenue to Traditional from

assets under increased markets. the stronger prior management and administration, to under both global from Assets due year

declined, and XX, a and year-to-date. had $XXX leverage income million, year. Banking results credit up moderating Markets of X% of of slide this had performance-based record costs. Capital XX% prior strong to BMO Turning revenues. the benefits was net reflecting up diversification There higher Corporate from Expenses a up the with but XX% demonstrate on million. and another quarter revenue $XX of with by Markets Investment were driven performance market Global revenue negative underwriting revenue total Operating The XX%, XX% investments. environment. by positive was losses quarter, driven growing recovery higher gains

$XX market of capture turn am to Services, year. which operating a Turning have businesses, positive Pat. to opportunistically it Corporate To an for and to the to factor. strong momentum now capital investing allocation will be in environments. share long-term $XXX I businesses growth net slide million, deliver And last balance our position, with loss a are in in XX over to was operating I growth loss compared sheets net a across our improving that, will and ability key and conclude, maintaining we economic our success confident scale leverage, for continued while future million resource

on Starting slide economic for risk we've the throughout and the disciplines fiscal risk or down provision the saw morning, five pre-COVID and key quarter. and points strong year of or negative reflecting pleased the due everyone. strong well momentum million steady our the points $XX consecutive total Thank low or performance basis you, down levels. points XX, were below were metrics basis from or positive points quarter quarter We profile, $XX Similar second quarter formations. with credit the of our basis impaired seen $XXX credit bank. XX losses good million our in from basis many continued risk for Tayfun, this million million a We last improvement and was to risk six quarter. Impaired across provisions six loan release improvement across this performance fourth management a quarter, of last very in to is $XX the

provision a are the these outlook mainly of was normal $XXX expect We but positive recognized results, more return which levels this provisions We the result do million with to improving migration. pleased performing overtime. very quarter, on an loans impaired release to of credit and for economic

strong relatively year. forecast the our Given the performing in impaired year $X.X remain billion loan in comfortable the consensus loan outlook than for adequate coming our specific of economic allowances provides more and against losses that provisioning ahead, losses we

our million, the impaired to significantly Turning businesses the impaired from loss low This losses loans were $XX rates well provisions Corporate in Canadian and credit as down most down reported we $XX operating strong lending. low insolvencies performance. recoveries delinquency strong million impaired was loan our Canadian we impaired across Businesses, In provisions and million. U.S. saw performance last quarter. $XX business of in we by In and million, groups, as from P&C, four $X driven saw credit commercial credit in quarter, consumer excellent In particularly unusually of Commercial had on auto performance recovery basis business net consumer the a across P&C loan segments. the prior points loan consumer

million. loans those U.S. a low The decline a provisions was and formations. loss $X in low by of net very Commercial on on driven impaired Our rate recovery formations Business had

to quarter on low This prior very with very $XX in quarters. credit slide On business overview had and impaired and segments These also gas. those had million. our markets now provide relative formations the loans than and have million reservations levels. date. X% and modest prior by we low $XXX good have this on of to was by In losses loan a additionally performance where seen we quite particularly recoveries continue are formations be portfolio, declined capitalized pre-COVID impaired XX, Our quality. basis sectors less $XXX of performance Gross appendix, credit oil excellent XX impaired to recovery COVID-related million at net make impacts with also an points driven up consistent to of

almost of highlighted. days on are trading we in And credit these signs there migration seeing XX, slide in quarter loss In with early credit as improvement positive addition, sectors quarter. no of see this all this were net you the segments, can

quarters. In remain optimistic in terms cautiously credit we've four of we outlook, given performance the solid seen the the last

uncertainty expect remains line economic the quarters. future the of we path consensus and in pandemic further While releases coming terms provision with variants from estimates, assuming in strength performing concern, of our would continues of in the

of basis next normalize loss low We of the expect this very low impaired from in over And expect terms so. the levels quarter. impaired year to loan the points losses be or XXs to rate in the

losses However, operator quarter given the conditions, see strength this two the may of we turn or portion I level. for to the call. the next that below impaired question-and-answer call current back with will the now of

you. Thank

The will of take ahead. from Poonawala Ebrahim Please Bank the go from [Operator lines. question is now Instructions] from We telephone America. questions first

Your line is open.

morning. Good

Morning, Ebrahim.

if lift if Thank have segments, are USP your up headed [in contribution the just consolidated the for fees start get terms major interest guess, interest from [Ph] and in Canada U.S. net in a sequentially, don't for in the you. CA] if NII we still I you both rates, to the both I to margins get expectation the third and Tayfun, PPP could us talk margin. of went the where but margin you with quarter? these the

Sure. Thanks for the question, Ebrahim.

to show start healthy two quarter with of the the expansion the our ex-trading that basis points a treasury times, four past team six over to has continues margins. a this I think done navigating margin picture quarters in very and job these First, actually great challenging in me let

despite are interest very that, the the the look manage appropriately. been curve flattened; and has to in low. -- But The puts takes. yield able environment, As rate we've some the there clearly level of sensitivities I is rates

impact far liquidity of excess this the year. so neutral been think has I

yield up into remember tailwind headwinds liquidity, the loans next picks the a we two quarter. be the they should probably points as the that loan five continued should the consuming with stability. in dip or quarters pick of curve. you look three, as getting little with forward second we into in our benefited, first-half U.S., start quarter two one growth And a next be the There bit wave basis again PPP against were NIM XXXX. have four, in now basis is the of us you PPP up from the quarter, the PPP we manage another in PPP as you're loans so [any a [Ph], continue because as third So, forgiveness fourth in see through may related I second those but in I and the points that But, target a some will will process the fluctuation. we expect originated year cliffs] accelerated may that of their of general, don't think exit in excess help to of quarterly

and deposits turn and in we continued to respect with and general, normal as spreads. in comments this I will about gives the make headwinds So, takes, NIM some Dave their business loan stability with it to over in Ernie environment. expect relative

what It's couldn't said, you Dave. to much I add Tayfun.

the the back P&C year. you have next with agree fourth You're U.S. headwind of right, in said. in -- in quarter, a everything up the a we'll And picking little bit I

add. to nothing have I Ernie. it's Yes,

deposit our how impact the on growth that and have focus loans, NIM. will that growing on is loan Just we're again, over

to further thanks. add, So, nothing

that in inflecting Is of seen and balances some the you you momentum for just loan as banks in a last like intra-quarter lot period-end Dave. you the additional heard in is of mentioned could on follow-up us we disruptions just X% some supply if weeks? we and I uptick the this If U.S. and consistent that, maybe could Delta June-July. a Dave, is Or growth that with around -- ex-PPP. chain few what seen from building? because talking slowdown color loan of the you about Tayfun, saw, have we've give

I So, but comment the to cases well. mostly in -- is U.S., as say think I your apply for would they Canada most

So our comes is whether Despite all in we which difference that plan And were really and X% up comp. issues, we working mentioned. we're generally point-over-point I thought significant today. between And throughout U.S., better despite chain that the up there point-over-point been businesses, was trucks, that's lending labor would all supply things what of all by still both in the on And that's up And financing, quarter. utilization X% now, pre-COVID and X% still despite, issues frankly, you it's ex-PPP. have and is still trailers, Canada are in the were that capital or asset-based the XX our till the points floor our so point-over-point. the

strong acquisition I'll in So, U.S. this pandemic the and been you throughout well. And has team through really Client before. has really what anything very all the Canada headwinds done tell it is beyond we've the about talked

teams been starting have which And strong has is in face acquisition been good on Teams pipeline. all remarkably to and in whether it's but client customers, face, some of Our the certainly, front consistent really with time. cases

really about good it. at So, feeling and of say we're end I'd that, front the

Got you. it. Thank

Please next you. ahead. from Scott is go Genuity. Chan The from question Canaccord Thank

open. is line Your

Thank you. on Maybe sensitivity, is U.S. can there going better slide XX, interest you us on leverage Canada? rates to get where on on side rate the increase back on exposure to on short-term to the why anything can side in you Canadian And Tayfun an reposition that? you more relative remind the have

to expecting that and And 'XX given the really have, that's that's deposit -- fact U.S. in related U.S. U.S., the the higher, question. and related composition little the between [Ph] will difference in It's in continue we the a both to great really we Canada Canada in it's the bit actually so tend loan the [betas] driving better are Yes, to U.S. growth a be and -- we now

higher on As focused support sensitivity a are which we deposit bit of the slightly could balances in change exit U.S. nonetheless, rate. we Canada for between growth, the you impact growing always difference two a more U.S. the in the little very somewhat transaction I maybe the think, competition on the closer preserve will excess countries. liquidity the potentially to that loan to But deposits that, of have

Okay, Thank you great. very much.

next question from Grauman is Scotia Meny go from is Please The Capital. you. open. Thank your ahead, line

put [indiscernible] operating you're a good Hi, accelerate can And gives good look guess good below needs operating of that leverage thing? the missing banks Darryl, on have year-to-date focused question that leverage a opportunity leverage too have X.X% investment but are X.X% year-to-date, that all much to operating only and not you to grow. leverage, at continue an is, Meaning, we operating to scope fintech know what in level. of up definitely you as morning. and I confidence great business still you even the technology

question. for Meny, Yes, thanks the

As our leverage journey began operating you on know, ago. years couple of a we

So, remind in course, we the of recommit a up But we've right, we're items you by, before, we us you and repositioning lot those that lots said And that year. it's we're the hearing of the within real how you're have of what for that any we've in forward. we've year-to-date go the expense of spend those are lots got leverage been did of them that to numbers. go net. particular quarter, of that's gone And result places quarter taking investments X.X% within a here positive bank. quarters going making it's up. anything for next down, you're actions see, I acceleration got a some X% operating I've proud go of the that And function we're is that not this time, as of the over would

in question, we quarters. been expenses If you they look the at little previous higher a than the had have are in that quarter

Some marketing, in accelerated But fact, we could performance good of that, in we all running all technology, also, that, XXXX sales of deal as the is with in that, some based in it operating a despite we And investments comp. X% leverage. so frontline delivered were. still force, hit it that

time, those at don't places track. value to I that the We So, we're where are opportunities able we're opportunities we're they many are long-term same and feeding on that feel good think the can around deliver leverage. deliver right starved, are opportunities think operating we the there shareholders like

far. come there's from you've so think more we what to So, seen

reiterating just the on leverage quarter terms And a you but as negative we how quarter-to-quarter meaning the been? in year-to-date a basis can Thanks. positive look has operating given have QX, change leverage, to for that strong outlook operating clarification of could

look, coming leverage so but on as any specific you have give positive reiterating I at particular going other any otherwise this to we don't have than quarter it's not suppose. whether of the know, the won't the I'm where point operating But on guidance Yes, the view time. particular course QX in positive, Could anything will or we over positive that quarters forward. it's quarter, commit horizon we

Fair enough. Thank you.

Financial. go you. Dechaine question Bank ahead. next Gabriel The from National is Please Thank from

line is open. Your

moderate with lowest, you lowest, not Sticking morning. numbers steady expect consensus, Good group. I'm or the that those if if if your one modest Darryl wondering to pace? the there, statement? we my could Are payout going based of removed should in to Or we we currently in larger the go on and of same lowest dividend caveats type like the when some bank course, around what dividend not more catch of when, and ratio increases increases up if see restrictions the place.

for Gabe. thanks the so Yes, question,

our I record our seriously of is, think part I look years. XXX we've should what the for better Meeting, Annual said you at pretty dividend taken for

that, I that when to you're get we we're will targeted pre-COVID restrictions and ratio the continue and think that talking day payout about foremost, first lifted. we one we is target respected going as have that that to So,

excess for terms capital payout really through quickly, you things to if will fairly us. ensuing increases lots buybacks. dividend the as over for left in then guess I over have of the ratio the So, there'll kind other of priority calculated, probably course And back means for be look is it capital, that, in at the as of well, even priority we'll to look with of then order where get That's including to the other of had returning we course, quarters. our will for was us

That's it Darryl. Thanks, for me.

Gabe. you, Thank

is question Barclays. from you. John Please ahead, line Thank is next from go Aiken The open. your

morning. Good

can of that AUM headwind, Just Bank in a growth Provincial Purchase was of talking any looking report the was bit the what Canada terms was? a Program, having Bond a the sequentially revenue of quarter, the the of and that of us in in a size at about comment what you there of the being shareholders the reported give AUM sense contribution

would de-minimis, on has impact very financials. is This down overall, that Provincial I Bond our there. our say Hi, Joanna. AUM, well it impacted Program minimal winding Purchase and

for Thanks Joanna. confirming that,

is from from Mendonca Please go ahead. you. Thank TD Mario next Securities. question The

open. is line Your

a ratio big we well for years BMO's sorry TD expense A moment. ago, the that in can was X. Darryl, to not question Big between few XXXX, efficiency the of morning. back the go a average fairly of few years -- gap there actually and Good

interesting reason has or essentially long BMO's remember, the Now higher has more. -- or And that had has so, last to now, the been then been like been of is that me or as eliminated higher a in that's as than years, vanished. ratio the for efficiency and why decade gap last gap I months couple group's XX

lot a actions to taken to suspect, has relates it management and I Now, relates lot a of the environment. the that

reasons getting what or in basis the for have here be the efficiency is that we've past, think past? BMO be the ratio, and of XXX is, seen those one away, would I'm bank sort that you structural in have you ratio BMO at forward, in as group in BMO higher, expect BMO's now the ratio XXX efficiency with average look of to we've discussed So, difference efficiency gone line it appropriate as to is an points those not do

Mario. Thanks, okay. Yes,

don't timeline take talked it, we facetiously. that we believe for ahead the of in we're in you acknowledging very the you on we It's it and I very about, that it important thank say committed fact, to delivering seriously. us, Firstly, to progress, target.

do Your the peers, we have do calculate than question maybe are, is more But made done go metric, we yet catch-up you we about And I our still where peers, do as that. a progress we realized of well. relative how item our peers. the the will of do portfolio of hard if things look we're than here? them took had still we better because this we I do, think look were better, particular what good line And you can would we you we Look, to we have on a average there's places ourselves. as our from opportunity that, one. that average there could a could know, we've to in any more hard we say, more things expense some than to at at partners I don't think pretty think look, of every the at been with And How doing, were it? where do doing do place and we

in as Canada. portfolio an not So, couple GAM efficiency driven returns far before, a the concerned, outside are we of numbers over were by yet. and issues. would Those businesses weren't they our appetite in on our you saw last on were and the our from And the as they particular to social years. the are driven some those drive returns and returns. of They driven of necessarily, particular, decisions, the some published shifts by they The performance for gains I by those efficiency views geography of driven weren't by highlight ability of exit the

well. come as year they So, next

to So, to of all we we ultimately, you get that told we more year go I think we've did got XX% where that a are. And from we XXXX, destination, earlier. room in what's our would

we Here why I as point the off we take we drive into are another see of don't or year-to-date. next years. And two around that couple can't XX%

big it's that this say real, this is permanent again, we'll permanent gap I'll more than emerge see unlikely improvement then. a that that is it's

point I we're ROE, our it's not now on ROE, the our well, group part as peer of Mario Having to that a plan. XX% out gap, through on efficiency business would and

Got it.

to of to specifically Let quarter, it's to relates unrelated in gains. question million that last you, quarters, nearly high the focused over I'm business. been have me the $XXX numbers another in gains, And just Treasury million few $XXX securities over go securities sort the this been related or very on remind

it and a what gains? on number, talk could that's change Is in Looking big a we or rates both? gains big securities are these classes few material back securities asset about quarters, the pretty the driving seeing segments just what's interest we what

I'll Tayfun. that. Mario, This is take

line been more the this showed comments to these have they we related even both the are significant related And So, are for to especially at will business all to that the in is positive very in securities broader and much fact to those further much portfolio. in four investment securities the as by are that I business with And just our parts in not portfolio They it quarter, of make turn item characterized investments investment clients. our Dan investments. clearly gains capital despite their all. defined These and an with and related And disclosures, Dave commercial investment over their than gains this as the that business it as business will that markets of does clients gains, business. relationships of pieces have not item any in well very last the there our in our results. always as line portfolio our environment, type pre-COVID, increases businesses are three, quarters, related really valuation

business consistent Tayfun. make clients, for would Dave. are supporting long investments Yes, gains. have that this our a the time. gains, the year, with Canada so the of in good it's we investment been been growth. P&C a We've and some doing small long attracted been time. Thanks, largely It's for This it's These

these good them But for -- but we've it's we've year, a Some many of business on years. and are this had mark-to-market. had many been are it's real off but a just pretty Dan? has been realizations,

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what else the mark-to-market rates or is it? because there to that something are declined. gains logic, Is have So

in increase No investment. valuation the of the

say Yes, more interest to than I would rate. equity the tied it's

it. Got Thank you.

is from CIBC. ahead. Thank Paul you. go from Holden The Please next question

is open. Your line

for outlook to to I commercial growth. want your with Good loan just respect morning. Thank follow-up you.

to So, roughly you're appreciate single-digits. to mid it expecting accelerate

it the really or understand matter to then trying excess what how factors a loan deposits deposits wondering in just excess of, equation? is liquidity if higher potential? get situation dampening growth sort these burn-off, we to that can rate it Just to a Is maybe extent and of

having it our Dave. clients capital it's Well, CapEx they're as is definitely a in lot where have using of an growing their expenditures, cash, impact. they those. Yes, Certainly are

that expect We continue. -- But And really has hasn't overriding back it that yet. there strong demand But up, will about is will talked demand. have the So, an I growth. the loan I be that come would a business impact. that is think gone utilization even

beginning the that said, in I said we'd the the year, we while thought fourth this would have I I at single-digit I of mid end were or As have growth. at the year-over-year midst of you think of quarter, COVID, we

think I out better to going that's and year. go probably be longer actually the in next

clients are on strong. their will borrow it's starting cash. really think clients many more. by down But I It drawing of to impacted So, our be already

question Okay. on business. And the second is capital markets

more figure broadly, not very putting I think the you've just everyone's for plus. year up results look for obviously kind BMO, but strong the of last out been what to like normal for might trying banks

in So, the sort would business the of you given kind view couple normalized you've last as would what investments of be helpful. a any was in years run help rate the made

Dan it's here. Yes,

the the ability market results very as it's exposure And XX and driving to what continuing expected. have provision. can that their When we we're been line. in a expansion, investments, sustainable U.S. with I and of seeing sustainable So, In and off. continue I say to across can performance. we repositioning deliver that chunk and Obviously, bringing wouldn't off, more we out that the we've made, to at get deliver large think goal the is about And positive market years, the places I all our we've behaviours. done those we the we But operating a I to now that's grab satisfying investments we we the creating last that Canada, look drive where can to look We're you to with intense forward, scale, really the over investments and the to diversity over made if those make think in pay the first business. some very to going see particular, think performance results, long-term. say to predict more forward, product positive particularly operating we're client share, leverage continue acquisition, accuracy that in more in U.S., of revenues operate

Okay.

share or no want with a used of run revenue forecasts terms PPPT to sort us rate? that there's So, you'd of you've in normalized what

then We per normalizing. this At pieces investments exposure have stage, and obviously at have that. PPPT target watching we're this forward and we of we we're se. gains making business, others think I have the we've to stage, wouldn't market where made I push

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it. Got

Okay, thank you.

is next Please Mihelic The from you. ahead. go Markets. question Thank from Darko RBC Capital

open. line Your is

first here much XX, couple line at and in the a coming that Page a the things lines thank Hi, looking brokerage. how from sort first Supplemental investor direct Good you. XXX your $XXX morning. very I'm of I'm interested BMO item, is million of of foremost,

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see to we're delivering, demand brakeage and expect to continue. client and continue strong So, advice full the service for that there

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Great, thank you.

The you. question Lemar Thank from next go Persaud Securities. Please Cormark ahead. is from

is line Your open.

thanks. Yes,

So, help elevated modeling did us for I terms Mario's guys normalization anything in gains. follow-up I It outlook to suggesting of in investment or with that want just us very give our that of to can they and some remain next can be moving and along helpful? the couple the would you to the business answer for you're that, in on years, on correctly, that sounds -- forward, interpret like question

this, Tayfun. take is I'll Sure, this

$XXX million financials entities we be to $XXX this going look QX, a sometimes We always there how year, exactly in tick. a to QX, are numbers should quarterly I to overall, have in So, this volatility, difficult it. when to predict you average million? had Unfortunately, bit to I you suggest at been $XXX million is or this an around. model predict it's you because these wouldn't expect will up QX, to they which little think $XXX example, year, some these remain But numbers cause in for $XXX clearly periods, on that above the related I these move you in might, will will certain on continue healthy, in receive basis, we million going environment, million. that near not be But

thanks. Okay,

important on to the that for next domestic to Later is second, expected think with is is and than COVID a business, my talk overall by post-pandemic balances you So, I competitive bit group. cards Maybe how perhaps on competition, cards And given growth tougher you question the seeing rise things is the cards the then and in the just outlook being profitability, one Buy not growth that and Pay then comment retail we're of across with in about come I the recovery. in can terms had also of for for increased a could first, Now of post-pandemic, landscape profitability? both the

that business, forward, this over it seen you as cards will cards been story, seeing frame we're going of perspective consumer that the question. of and has and and of while good of this which of travel as up the spend part the delivering been our and momentum, broad coming that out imagine, business comments with of return, we're continue exception very growth pretty based the had I be part couple performance, seeing it to little, the appreciate we've P&C what just category. strong part quarter we've story can consistent A Thanks, Canada in overall, quarter performance of past cards story, with

last better to perspective, just look it's X%, it. you it I a QX spend kind 'XX. So, year this get because than 'XX always against higher over want frame we And of XX% about and of at year, give is to a

recent us, of the of of suite, of our we're also a coming good seeing obviously, So, return. our product That's and for we're launch seeing Visa and our breadth that eclipse some function the the products. card out offering performance business fact

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about think Later franchise, And and both portfolio I taking, our again we've is a measure As the quarter-over-quarter the of the growth of competitive the on year-over-year, Pay I recognition had that cards way, well that opportunity actions and marketing market in as an been performance. And against in we've Now manifest interesting strength always on landscape, the participating that our Buy we'll haven't we franchise or obviously of, be good some it that time, really cards form pick-up but will share when seen a we as the keep obviously we gains shape as over lending. terms go our track forward. and in of yet, consistent

pandemic So, an suite the given being of overall, and participate we to breadth I important well our in more growth, the going of importantly, cards, see to credit payment network continue we're and for capability cards products Canada, would positioned that even and now pandemic. one say we're and well our dual through component ecosystem out coming of in the

So, in overall on confident future pretty our cards.

Okay, you said -- sorry, go ahead.

before last hold and to for wrap off So, have one to we I the think go we're call. going that just just question now

thanks. Okay,

ahead. from Veritas. will from Last go be Thank Nigel question Please d'Souza you.

open. is line Your

you. the undertaken something well hit revaluation the at Thank XX driving wondering that months? is is last pandemic, that's of security during gains? portion to quarter. your had unrelated, undertaken debt those on XX those it all actually warrant that related equity swaps completely to was the of Good follow-up as were a over swaps equities morning. Or the I were this for on gains And a equity the I in if gains workouts those

Dan small capital The our I'll there in was here, the in that was equity take piece, from a majority amount that. investments. very maybe markets

will where I of in debt-to-equity think those bigger future. the see future there's some swaps a gains

on Delta persisting overplay that growth variant supply you been plays or depending might Has on mentioned how see apply, side. perhaps chain issues any of and adverse the with or impacting your the the Do growth that just supply your you for variant, any Delta potential the you if your growth credit issue Asia? And and variant the out on outlook? chain Okay. Delta there side, of just commercial impact that change credit finish impacting could any outlook scenario I and quickly potential on could on impact management inputs

nor left Thanks our this our might And the recall, the take scenario, we made the the I'll it's weighting the for question, Pat. unchanged for actually it, we to adverse severity, part adverse we you Nigel, changes credit of case. of of no in did increased that severity QX, quarter.

provision total released during If you look XX% what at our performing about fiscal of releases 'XX. so added far, we've we

and other in emerge. So, uncertainty we between pretty momentum good strong seeing, the we're that a balance around seeing we're really economy the and obviously, that's the credit performance or variants think that might Delta the

out? play our to But if scenario we So, should think case position, we a the out, lots releases scenario come. plays we've cautious in still adverse base got of fairly think we're obviously

got an growth just that on think say slowdowns our taken impact, we've certainly some consideration, the comments, Dave, quickly, and in. significant it's that we've would but markets, good coming into in inventory, we've I still while growth when that's that has I And had side, factored in,

appreciate you. color. it, the Thank Got

portion call concludes I'll back turn call. the the That question-and-answer you. Darryl White. to now the of Thank

operator [technical all your -- Okay, difficulty] Sorry, you [technical for thank difficulty]… questions

Yes.

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that take the past us I'm have I summary quarters. going consistent several four to So, themes on, want to key for for conclude been this with

for growth, our are all leverage mid-term quarters first operating First, strong. and ROE, targets. EPS above the are results three our

our have expense we do commitments, efficiency on strategies to in more. we Second, and and delivered place

to for balance differentiator, begins primed mix, the Third, continue that will our is. to be sheet as business advantage, in which that and ensuring the it we and a believe strong to enabling our for we will you for financial credit quality it's and going as to strategy speaking we to will recovery momentum with do communities. have look our confident our businesses And And inclusive purpose our that, remains connected are is forward to be highly that our performance. in in consistent an December. we our while all you call Thank deliver we our do again driven view in and participating part recovery customers grow again, even think four, we number economic today's