Bank of Montreal (BMO) 30 Aug 222022 Q3 Earnings call transcript

All participants please standby.

Your meeting is about to begin. Please be advised that this conference call is being recorded. Good morning, and welcome to BMO Financial Group's Q3 2022 Earnings Release and Conference Call for August 30, 2022.

Your host for today is Christine Viau. ahead. go Please

good and Thank morning. you,

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

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

you, good morning, everyone. Thank Christine, and

Our mix, of this excellence diversified of and our the quarter business and demonstrate continues advantaged strength performance the resilience power. our quality earnings and credit to

market drove in both growth $X.XX, offsetting by than capital revenue adjusted earnings earnings American expansion U.S. per growth and revenue by challenging Third pretax North quarter strong and was over pre-provision in share driven record markets, in loan impacted P&C very margin lower and our were XX% more performance a P&C Canadian Robust which more conditions. businesses.

inflation having action there uncertain, an named are effect. environment at economic Central the While Bank signs remains are taming that

of strong for and are position are and we, which growth benign from some with moderating, this slower Credit at economies, of still to loan While context added BMO, for reserves downturn. the high unemployment to provide activity In Canadian the we strength. US modestly business the remains low and savings consumer buffer to operating likely losses, is a quarter.

support to while the Our cycle. consistent growth through customers delivering us performance PPPT positions

year-to-date, PPPT ratio of X% is, up X.X% and the For billion operating of an leverage $X.X efficiency XX.X%. with

improved operating capital and continue impacted to leverage was we markdowns to client-driven target market and driving support returns bank in West. the deliver dynamic our While the Year-to-date, of and the actively Bank the to sustained our severance quarter above by for as growth. for we due focused to capital balances markets, conditions positive position, pending ROE of expect remain managing changing year. managing this We're leverage midterm was XX%, the balancing operating underwriting on environment acquisition

closing, of post XXXX. above ratio expect comfortably QX to during We XX% build CETX our

We engagement progress the loyalty ready in to deliver advantage continue future customer over sustained relentless time. to of and health focus significant our and enabled a that key high-performing believe on bank building employee organization the is our make digitally will and

customers and creates our are culture recent focus These comprehensive, Our our commitment sustained and a best the activating best contributor employee winning results client us Bank experience level. placing improved institutions. conditions differentiates to quartile the from on In to And has bank's a results the every high-performance highly One in to first our Client, key among is cultural engaged with retaining now performance a in aligned attracting a to BMO world's driving to is a been a One which loyalty. personalized and the advice exceptional providing testament financial to that world-class performance our culture the approach, interaction us our for talent. higher resetting survey, third team

Canada's -- J.D. largest Advice Satisfaction top Banking ranking customer the Study, the received Power XXXX highest satisfaction among we reclaiming Retail quarter, rating Canada spot the in banks. This

Magazine Money Finance businesses as enhanced In Bank and addition, World expanded we're and with we across Canada. North Commercial, digital investments recognitions teams the payments. recognized help Private mobile businesses. and to NSF We're customers in low acquisition customers or manage introducing our new capabilities progress, Banking balance the making charges Personal and our proactively Business in American avoid marketing products banking Grace, including our new offers reflect cash Retail best our are online record feature were driving Same-day customer and the These which again by that Account their in helps and customers for newly US Smart overdraft and no that missing a fee launched Canada, and

in been are driven execution. XX% of client capabilities Canada delivering who growth, and expertise quality by strong full Our industry and is and loan the businesses the BMO's broad-based with quick North deep our in bring Growth bankers and strength local the outstanding experienced Commercial of service XX% up US. and market American Banking has and provide reputation

US, client areas, our loans education. suite growing acquisition than delivering growth we're impacted ETF BMO this were driving client on and our trading for we new this Canada deposits. activity. Investments Last is returns North businesses delivered more Capital Wealth high-return Markets credit and new which on XX% together later, growth results in by of our with underpinned has ongoing of seen consistently in introduced and strong The market assets market focus offering be in American PPPT declines underlying of the free-to-trade client despite P&C can good and XX Management the investments A with In quarter the year strong moderation culture our a higher who is All in conditions consistent and business, quality of that team our strong time. key assets, businesses, over global leading activity investor year-to-date our in of risk fueling strategic in net spring, performance XX% growth a and professionals delivered with and risk result expanding enhanced equity Canadian broad appetite platform. peer the ETFs differentiated Asset a clients. adding revenue a by lower including experienced client leverage. positive franchise, growth investment operating

Our positioned to the average to remain of over four well-diversified expand we've on client capabilities quarters made delivered businesses have and grow relationships. and PPPT million of build over last an $XXX the investments

This that a performance leadership transition also ambition and bank make BMO the commodity segment ROE overall. year-to-date which We mix the leader quarter, market. evident in line with diverse the is carbon our earnings in zero we bank's acquisition in lead in XX% clients West. capabilities in the addition net advantage to efficiency strongly development consistently business climate position a the partner for Group remain our be in the sustainability The and of to of world. will further of advanced our Radicle our The environmental contributing of announced our a overall, of of is the with range US positioned Bank the of is and the credit

a future As our grow a purpose-driven commitments society to an we thriving sustainable economy, principle. the bank, remain inclusive and guiding our to continue

ranking superior quarter, capital This loyal to is banks. an employees Corporate BMO record liquidity, was a once with To major track for XX risk ranked proven and well positioned of environment, named conclude, among Canada's and engaged first management, customers. evolving Canadian Knights' again Citizens, strong our of economic Corporate Best high-performing bank

closing shareholders over enable returns We of for of Tayfun. continue and it for serve, of the for turn deliver our West. the invest Bank progress acquisition to long-term to integration and strategically for now I'll we including communities growth our to the preparing

and you, X. comments Thank for will joining Darryl. Good start us. Slide you thank morning, on My

will as our was billion down basis, $X.XX businesses. in adjusted double-digits. the of revenues on income expansion net to and Third reduced was remainder on quarter XX% last due reported is Performance margin quarter and helped comments results. very EPS changes pre-provision, compared and impact this income Slide $X.X prior with quarter by a and the my adjusted this XX earnings income with XX% Bank record the growth which was items end. strong West, The the billion, of $XXX $X.X businesses loan fair interest are the US, was include year-over-year continued adjusted activities rates in net both net was to of management an in in grow Canada year. shown and million, On growth strong $X.XX, $X.X related quarter billion. of Adjusting at acquisition Revenue EPS of pre-tax value focus P&C in from

the including Continued weaker of including capital year. and prior $XXX loans impact the in Total indications total earlier in will PCLs. PCL severance million of made his lowered commitments performing these loan speak a markets, for remarks. quarter-to-date the results with recovery a in year constructive. Early $XX microenvironment on costs to in more and higher million $XX was down Pat million are provision compared

prior the in X% operating wealth. customer balances and and Moving balance X% year, up and across sheet XX%, government growth growth loans Slide accelerated, strong the up year-over-year the in XX% growth groups. increased XX. reflecting increased businesses from deposits year-over-year. P&C to Loan quarter-over-quarter. Business diversified with Consumer were Average all on XX%

we pipelines. ahead, P&C growth to strong continue loan Looking diversified businesses, our reflecting in expect

from ex in Turning Canadian points Net up last margins to prior US year, up higher margin points basis, margins. with partially reflecting up basis deposit and margin basis up in six basis P&C and NIM by the loan interest margins, interest a an growth XX. Slide trading up balance was was was in primarily on the by quarter, XX On Net ex businesses. XX% XX% P&C, from basis income driven and deposit XX strong wider trading sequential P&C offset lower points expansion.

given and next expected to the our widen, in both year, businesses level the quarter all at into Looking P&C fourth rate rising environment. to NIM is continue bank and the

slower rate the them shock expectations, expected by for move XXX our net A sensitivity over to To XX months. next been rate on betas benefit $XXX slide we deposit our XX. rate interest expect higher have basis date, to interest future Moving to but income point is hikes. than million

we the reducing locking lower fixed higher the to During in rates in term rate future. exposure investments, rates our quarter, added incrementally and

lower divestitures. to to of to XX% compared slide on XX. prior due revenue, primarily of Noninterest impact basis, net ex-trading and CCPB, year the XX% the an was Turning

revenue US, more and lower Lower credit lower markdowns in million market securities Capital to higher of the due environment. prior and the loan gains, card spreads. widening addition, deposit in includes In in offset $XX by was Capital revenue than Markets reflecting underwriting Markets revenue commitments on

costs Targeted compensation by growth, revenue Moving compensation. are technology severance, partially by including up in days performance-based a severance up X.X%. were and to compensation higher performance-based net were to severance Sequentially, from force X% were more three XX. partially year. expenses quarter, lower partially that offset was our variable and and markets X% divestitures, year-to-date offset On higher driving of expenses capital divestitures. the due investments by offset expansion are Expenses slide spend, sales and business. technology, basis Lower the up prior in

operating our negative from moved This markets being positive leverage to quarter, items the two in capital X.X%.

constructive Darryl leverage to Assuming we in move year. operating expect and positive leverage also to positive for operating QX markets, delivered as said, the

Moving to XX. slide

remains equity position basis the XX common strong of ratio capital down Tier X XX.X%, prior Our a points quarter. with from

on growth to changes in capital by internal under the shown in interest generation fair were rates. of more increases from risk-weighted the assets changes reduction the shares Bank DRIP the the in offset related West benefit As issued slide, a value and to due than from common and acquisition

on discussed impact previously, interest higher value to the offset by basis rates since the points fair the in As is changes of of capital expected closing, actions to goodwill management incremental XX be the announcement. generated by due

strong risk-weighted in lending higher, were growth reflecting currency assets our Source businesses. commercial

margins, P&C and were lending in starting reflecting XX% strong XX% pre-provision the XX% business, non-interest delivered with up income X% revenue loans residential Expenses increased groups with XX%, Deposits on growth commercial slide Revenue interest operating Net the net balance force of mortgage technology. was in Canadian and XX%. income the while earnings the million, growth in up up were growth strong investment prior increased XX%, X% loans. of increased XX. from including in XX% year. year-over-year to and X%. pretax in sales Average continued sequentially. with higher $XXX and Moving and

down employee growth earnings Net income performing Moving slide XX. and lower on in to Pre-provision strong was due to a US for income, $XXX reflecting higher strong, speak million, interest dollar up investments. the by loans. losses pre-tax XX%. X% due increased higher partially here year offset was to X% US was growth Revenue from revenue. net Expenses performance. comments the prior to non-interest credit My will costs provision P&C on technology up XX%,

very line sheet, year-over-year balance expectations. the XX% the from commercial reflecting On deposits average up quarter, in were our strong were loan and year, X% loans from growth. Average with declined last stable prior

of global million last net net with impact markets. excluding down of with down $XX partially due X% Management offset income from partially $XXX reflecting the $XX investments the Wealth year. was divestitures, was the Traditional higher wealth prior XX. $XXX interest by million, Expenses were of net revenue million income, compared weaker million year. Insurance impact income in the income slide offset $XXX to million, Moving mainly divestitures, by was in underlying growth net to X%, business.

debt to impact trading in lower compared $XXX prior reflecting to of in Turning slide Markets was and the issuance reflecting year, banking and mostly lower Capital net of new to equity revenue issuances. weakness underwriting Markets corporate BMO the advisory million decline Similarly, in million the and in investment Global Revenues declined due income revenue environment. XX. continued market the was $XXX activity. a in impact slow and

and The results year, year. that severance higher this of as quarter performance-based expenses. compensation flat partially on development We more was loan Expenses business which the offset we banking also lower had core of we so were far were normalization revenue. in show end to were and environment relatively made constructive signs by by our earlier fiscal offset as approach markdowns commitments is the expect

in Corporate to our now million of conclude, results loss income a profitably. our year-to-date focus million to strong, compared dynamically revenue To businesses, were Turning continue growth XX. growth $X P&C company managing in Recognizing net on boosted Services our we prior in net continue overall record the pause to related by market-sensitive to year. businesses. was $XX revenue to growing slide the

that, Pat. and Our diversification to be strong continues will And geographic it an in over with maintaining performance advantage to I levels. turn business

strong $XXX and down million Thank $XX million, with or you, of quarter or in origination XX. were formations slide points risk impaired basis to reflects remain on points, The quarter. metrics and Tayfun, for prior time. very credit or from basis points, last We again provision strong delinquency $XXX up strong were impaired of portfolio XX our provisions from through is discipline Impaired and million This good morning, everyone. the last million due loan XX low management the performance was basis Similar provisions key for periods and quarter, pleased this strong. from the QX. rates. disciplined total risk performance risk Starting or to $XXX performance basis combination four points quarter eight losses very

quarter impaired over these credit specific prior reflecting a was quarter $XX time. with pleased are as We relative expect a as well the deteriorating to judgment in credit losses return for to to offset results, positive COVID-related we on portfolio been strong levels outlook growth. more to the by uncertainty. but largely loans this reduction applying normal have again Provision do This provisions performing was quarter, and million economic this migration

against in that our Given adequate remain profile allowances loan of credit comfortable and we the $X.X coming losses strong the current impaired provides our of provisioning loan performing billion portfolio forecast year. losses, our for

Banking remained quarter. Banking impaired with that interest levels. across most segments but pre-COVID the insolvency which inflation. were losses from increased across changes Business impact in credit and well delinquency we Business segment million, for loan for QX rate prior US very delinquency Personal Banking by again said, interest quality the impaired with products, businesses in strong, modest P&C, rates below In our low well impaired performance we to loan QX, business And change or remains credit a our very performance provisions to refinance still flat rate indication all strong when do the losses and below driven could the stress levels. to that recent operating groups. expect Loss quarters, view borrowers With of reasons. as PCL. and relative little pre-COVID they in delinquency RESL renew, ultimately lead this loan risk several low low Overall, levels up million, saw consumer or continued and still credit Business rates. from prior to We of Canadian Personal quarter. had Turning $X Consistent in $XX Personal was consumer

First, products uninsured XX% the second, installment book are only out XX% next our of time spread giving RESL XX time borrowers are for up months, over RESL is our insured; to in renewal renewals and installment of adjust.

high a base quality $X.XX have average LTV with borrower of we credit bureau an Finally, of XX%. score an average credit and

XXX of In fact, an book a bureau with than combination than RESL to score a borrowers less X% less of our greater Canadian LTV than XX%. is and credit

slightly quality. next portfolio and we strong you commercial, renewing also As XX, performance. commercial In very segment corporate our Canadian impaired months down our we last US commercial the million Slide business, provisions credit quarter. loan given of reported XX can million loan riskier saw up below In the last from In on from of nominal, is over businesses, we levels. quarter, $XX see had but impaired $X pre-COVID our million, provisions million, well $XX $XX

indication had with by credit rates stress this modest or this remains Our recovery Overall, quarter some a driven quarter little credit pre-COVID of saw and XX-year levels. quality commercial business corporate strong new and Markets this excellent QX, PCL wholesale very $XX loan with lows net we impaired million, our a below recoveries. well rates performance impairment formations quarter at and in Capital of zero borrower

protections as driven to continue consistently We geographic strong peer-leading and have well from as loss very benefit sector structural strong that diversification rates.

portfolio pre-pandemic. positive has in rating the better to average risk We than now an QX, migration see migrated continue net and quality to credit

recent market good and low origination loan higher quality, at credit of or impaired were pre-COVID that leading highlighting challenges XX, the more balance this depend our now XX than formations has both Slide how The fiscal on highly Despite in saw for allowances higher below the date geopolitical have to very uncertain. this Canada see rates levels however, Slide loan remain $X and Consequently, situation current the is over continue XX. even still quarter We high again the was million, and in we been as environment environment points growth trading quarter levels. stands one notwithstanding can noting, likely basis more billion, there relative borrowers rated will expectations overall what bank-wide performing only a coming changes investment-grade average year. a some gross performing you and in than our Our impaired quarters of macroeconomic remain impaired our of gross coming to percentage time XX volatility, the percentage that overlays on XX%, uncertain loan points. impaired XXXX, that our in loan losses Both do we outlook loan balance. economic at On that $XXX in our period. formations comfortable to adequate COVID-related provision of well loss be for US

low the of are operator the teens expect back will While a the Despite capabilities. move we rates year. in level do I low PCL turn current with result pleased in now slowly the adequate more up in call portion the Impaired pre-pandemic interest our XXs high was this given rising expected headwinds to in of to risk coming management are well Question-and-Answer high are call. Session rates of manage the impaired impaired our which to to headwinds, higher emerging we PCL inflation, portfolio, our for allowance to quality other very the quarter, losses these basis or question-and-answer line risks of and positioned and with strong experience, we in to range points. terms

Thank you.

Instructions] Aiken lines. We John take first go the question Please questions from telephone from Barclays. from will now [Operator is ahead. Our

quarter? what of I Can to the moving saw Dave, what believe to deposits. behavior the forward? US wanted growth you in of you you terms customer speak to Good terms discuss leads And morning. this in in

Good morning, John.

the and decline small think deposit I we exactly In say, in environment. have this actually, the in rate the the profile I the a deposits modeled would seen Canada both quarter-over-quarter. US, we matches way US,

We competitors' are matching some terms of of offers. not quite in rate aggressive the

increase. the digital where have We to our state additional offers we We point, an moved, for example, do have up active obviously, expect betas at below actually And to each been therefore, one rate deposit have betas with And them. modeled the on. outflow margin we effect. switch you not behave. yet. But XX the thought have point, this margin way US, expansion at reflects how slow matches would digital seen, will exactly our we point the basis that that the And the in expansion offering about the the deposits go

Thank you

Thank you.

Following of from Poonawala from Please America. Ebrahim go ahead. question is Bank

overall of good ratio Hi, at and the or expect we you the outlook backdrop over I economy? wanted leverage terms lead would drivers for a us get to guess materially that of what efficiency heard next improvement your capital we either and so, in I And just and efficiency around into more beyond incrementally clear we the I low XQ. that XX.X% are adjusted should XX.X%. XXs? up. positive for loud better in markets operating the years look year-to-date doesn't for follow when the that look But ratio two in morning. from the a just year if Give of sense

for Ebrahim, Darryl. with I'll help question. try to Maybe Thanks that. the Hi, it's you

on and outlook. fall year, short our the So give the considerations operating we the giving revenue you both XXXX a but on we'll think the momentum of and I business of in leverage. we've our as end I our Look, We and good as planning, the of about here how look future got that at PPPT cost our businesses, think we travel we performance the side. can at of some do lot

That You're set XX.X% to at I year-to-date. XXX peer basis a averages that think compares on we're only points that. right,

little to number it's time, that than the and a narrow. at higher So And basis now the hundred average. be I points used one gap say pretty hand, it's the the several on would same

levers we'll operating we on. into of And to have I that update leverage, as think continue we that we more have push go opportunity bit a as beginning of to get do as on we we there. XXXX, XXXX. you into continue the And we about build to think little can we plan So continue our

the quickly I terms XQ? in And through expansion comments did in if on not sense in as beyond deposit as from inform margin. the towards And US a some consolidated earlier. that, pricing possible of at term, West strategy and just guess similar your cycle? Bank very in think the near we of follow the and betas, on made the us we of Give How segments you deal one comments about I it. we betas US of that fourth different up does the your their is see last that a you Got you it level deposit deposit can when in the look regional as of move bank deposit close? Tayfun, does

I the We not of strong. NIM I COVID give to we margin be start year. depends -- when have Look, expansion and going you downside into and magnitude I the increases. expect continues NIM protected with very mean, take on said. expansion we frequency you, be environment. it year, to quarterly I But next expansion into looks of performance the we really next the the as the Yes. try NIM yes, even account to expect it next rate quarter because updates think better expect do Now since how honest our well into

part tend maintaining what in. terms -- upon the on In beneficial to actually the be deposit depending very in have of deposit Bank West, contribution portfolios of margins a the terms portfolio, they of core clearly very good of rate you're cycle from and core

with the better Bank do So profile planning even start post national actually of we once have West. our that the deposit sheet helped will absorb a believe today we that balance now future, NIM program. for digital to I compared the strongest and gathering

Got it. questions. taking Thanks my for

is Please The ahead. question you. Desjardin go Capital from Thank following from Young Doug Markets.

morning. Good Hi.

sector-wise Just size a details quarter? more any which maybe took which provide It the just you're start. mark, -- QX. provide on out and guess, to the details And if feel can the to mark move as through on this leverage Can in some you book the And feeling as I lending why it? book wanted you improving you you or are to quantification comfortable comfortable like marks. any more color things as with you or took sounds

detail to hoping that. a little Just get on more

Thanks Sure. do for I'll Doug, two Maybe its things. question. Pat Cronin. the

First, is I'll from quite from. markdowns bit altogether of a separate out the loan the a book, which where thing underwriting came different

size of annual the that in then book, loan we is disclosed what report. the the So

So report, have you it to be year's $XX in seen I of our slightly number want is would just billion our portfolio financial over definition. annual loans last companies -- that was sponsors. definition under to sub-investment-grade over clear,

rates definition. you would loan what So published of And can like. and sense under get wholesale that seen that's what's apply growth the portfolio that you've a that since look report was current

very clear Now, that we into segments. make of two a distinction total,

The -- that first is things parts of portfolio that are highly secured.

there. estate some capital are secured call So these loans, in loans real be ABL, RBL, there would

we a rates gross differently. and into we and loan that we by years in to very business, experience. And leverage this those of actually as don't limit, even data apply them the lending view impaired that different because we profile, those fact, treat quite PCL So around limit risk that's supported include

So The -- all, I might I condition reading current with about deals the flow of just limit we're And to the that environment. be that the book. is what financial you very strong, that about. first of That real is total notwithstanding of those in whole very we our talked current with comfortable loan about just portion the traditional book is XX% internal roughly that cash talked sponsors limit that about.

loan It's I The of our you PCL diversified the a been rate quarter, experience third loan where we're down. diversified ago. Our size sizes actually we business and gross rates to gross And, that of come portfolio we has that than we It's, impaired mean, transfer your fact, about than X% were impaired in portfolio. lower risk a any really number, on the it's good on continue some to XXX points basis very $XX small it's year And that from overall PCL we a for wholesale less that of that once quarter, the no business of that PCL have We, you million. quarter. to parties. it part assumption on give look actually segment at portion if you hold make just little on to hold even in the and detail can almost a our size. And PCL don't pretty But you this relatively this segment. overall loans. doesn't by out saw given average, down government include also well question sector realize over that low.

quite our We've actually those. And book. a dry sponsor now. to on very good additional performance clients, lot they know, with support seen including lots of as you of comfortable where committed during the right sitting capital we're they're stress So powder from

we would under be same. to that, that stress the expect So

Now book. that from the separate completely underwriting

positions these to we are hold. do not intend So that

are a think to over distribute When compensated time. risk been at clients. in well the the good to generate for a we relative for to very fee We business, professional, risk intending very risk we the as I That's investor that revenue look I business that we're inherent us take. that

of as to -- don't is to we would dollar markdowns in you, though, typically as But going $X the not where profound billion take be like and in prior that the originated of give would to Ukraine. we the immune concentrated of I terms terms have we're that, in Russia's We find did this end of quarter, But the in to but of deals were north slightly total quarters for are of sizing, it. market Canadian going that dislocation that invasion were that underwritings. been book primarily note terms, don't just

base the quite leverage broader were declines in quite So market. consistent we it was that The with markdowns concentrated. lending took

all regular valuation subject virtually of the if roughly on rigorous concern. those valuation took question none valuation, of review on we we've see to leverage lending cause quarter by a end. would we about and your us Specific of to independent and review that those with line second issues look the at the marks And in then about, better specific average, with fact, and you the Deals originated that at markdowns that indices, since largely broader Now that's terms those been positions. we pricing. invasion

I for about markdown And that we're so of that, I unrealized. would And comfortable we say, took QX. quite XX% was the would note that with marks

We market have in QX. that in a modest bit of little seen improvement

extent recovery, to better So a open bit least of I'm right we're To with. terms we're distribution, book quite a with that the but said, in the same at down. at for we're calling originating new market unrealized. comfortable as I heading for those at time, fair But certainly we'll up that continue windows direction deals, not the whittle

maybe, your hopefully, So answers that question.

seems appreciate positive had like I in can If quarter. sneak more It just in it. earnings I fulsome, the you corporate. on corporate one in Very

But me I think loss. I correct and $XX you quarterly that. -- to $XX to I could million the I'm probably wrong, can on wrong it again, -- think million past, guided was I'm in be

of unusual drivers, some to or on anything Just to anything corporate? pricing wanted came there unpack like transfer the was around gains or that interest hedging fund rate

Yeah.

little I think the around segment corporate move tends to bit. a

valuations mark-to-market there in be -- U.S. were CRA in our the to quarter good just some This happened investments

in So then quarter, impact. to quarter, that fees issuance the last positive And for recorded corporate. had we our equity underwriting compared a last

move Q-over-Q that the those this items basically numbers, to impact but there's quarter is So number. nothing two unique that would

you. Thank

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

Good question morning. on Asset Walter or for Management. is Darryl My

having and strategy investment. in assets over people to obviously, asset talked income of the just the You equity pretty investment there a like gather wondering the opportunities kind fixed the or team, there internalized Is opening is mostly opportunities, remarks big on it's because XX it medium-term? and

accounts. question, portfolios, portfolios. business away that thank No, EMEA in managing a growth international a and you. When And right no, both the lot of sold had the lot of great took expertise we we on actually Scott, you're

to this to And it to within our a opportunity our allows mandates that internalize And restack so and us we have that. took mandates the then branches. also expand of we bunch distribution

us. So to both solve going really it's for issues

or particular, Is the like on all focus segments, in or retail institutional both?

it's so do both. Actually, us going to to allow

income. gone, And team. with have the could institutional and especially reduced the that we very we with that So with international amount EMEA equity portfolios, good capability fixed do, that

So us. institutional to retail and it's for both going solve

Okay. Thank you.

A Thank from question go Financial. following Bank National from ahead. you. is Dechaine Gabriel Please

much lot pro almost higher of been have there's of but and of $XX a driving on increase it's in maybe I'm I'm of to loans And business to question, the and the some -- Deposit US margins classified or are credit pertains the specifically. really versus sequentially million in wondering questions expansion. X% I that I XX%, flat deposits peers. your And increasing billion in for forma and quarters pieces on sales deposit about you're money look And any deposit here. at Stage base there. the side. margin loans. was commercial moving a the saw traits, demand this number for down million portfolio, the When then X if provision, related taking couple seeing over see that -- going year-over-year soft the how performing just One, outlook guess? the clients the if of of see forma Hi worth I than performing the A how of migration could I NIM $XX pro the on was, up we trend few or dampened, Pat $X of invested quarter, next whatever? could that? growth this how the but

in the the great. of Pat. really quality a answer first were entirely was economic quarter-over-quarter. But your it's asking you that the answer think simple. That's outlook Gabe, And is and in The to audio there deterioration use Hi the X provision. increase question. I calculate about try function the Stage not we balances almost I'll quite

staging. and in in in really particularly quarter, -- that actual supplement, and in wholesale. migration actually That this the really both as went the seen sense, positive, had some RWA regulatory migration you affects consumer have credit down you risk So isn't would positive that capital risk in -- probably we the rating know, because traditional

So, that's really just worsening purely of outlook. economic a function that

question in really… if the didn't of that up maybe the That's was an an think question? see increase of I show or maybe you provision, the that's second increase in part more your

Yeah.

this deterioration I reduction fact my of as increased offset economic But really the the was a by remarks, in that, a said function prepared That's quarter. that that Okay. of largely would have in overlays equal, the all the provision. size being else

COVID farther the those overlays we imagine, As that's are specific of And provision itself expected. can have you related as see you up down. uncertainty much out starting to of might as some COVID, didn't you as go come get why

Okay.

of as NIM again, X% the we the deposit Gabriel, On question, correctly. the again, than expected. if have to US, I expected you question your that did decline, I slower betas refer which been said, And we decline. type In heard

quarter. protect margin to going deposits was expansion We We're up just strong continue and we four going pricing this very still points basis three, in not because basis expect deposit our still every shouldn't US. for expansion We actively turf. to expect attract in nevertheless, excess quarter But, growth, the next have The XX forward, business. happen. not Banking quarters. the to for Business we our especially That's Personal XX point

are this more so We from than commercial. benefiting

the In think about side? on -- client to I would comment want see you deposits. terms asking from client of what you on were behavior Dave, you

Sure.

of bread our our decline, surge core surge grow, actually operating continues We on feel side, but we've the maintain and larger us really deposits very we the side. had for large deposits. those than their modest We where but had about is portion a very with commercial we good using which and that. are to butter, our peers deposits, clients on So thought, our real consistent commercial –

were are stronger really still than LDRs the So they pre-pandemic. today

to that very hope feel we this well. to able quite and good helps. I expect be So manage

Thank you.

question go Holden Please from is Paul Following ahead. CIBC. from

Good morning. start. one A real you. Thank quick to

Just losses or to clarify, mark-to-market markdowns. include purely realized Was that well? some as the loan did

is Pat. excuse unrealized. unrealized me. realized, are rough Then it's These Paul, numbers. Hi, XX% XX% About – about

risk-adjusted in heard US and a And competitive both the Canadian And commercial opposite up not now certain you. loan conclusion almost awfully in competitive from I US right some pockets. some competitors comments on Perfect. question then loans. the then the are dynamics Canada. in banks are underwriting We've that sort particularly attractive and that the you of commercial criteria Thank that margins the want to tightening segment, points ask point in markets data to

wondering, just markets? is perspective So, your both what of on those

think for and hear always both US, and in clients, you'll my time, yet, say, our more would sides both on industries. back much And competitive too. from way go that's I business, we always particularly it's I clients similar We a Dave. Canada almost over is go you really – business see long the of It Most and the time, competitive. in never for perspective, of back don't We price. border, the is if said. actually on us. our do in more And this compete I compete similar actually This dynamics. larger

the and all but is, in that You the is hear at them part, an maintaining helping who job our the business, them, are looking clients actually term. the reality can price time. long that The important over for do we're best attracting grow

a the and we So business is is perspective having have as long-term actually more being as important. yeah, in long important. But price

other But really Canada? actually or can't really So it looking client are I I continued the is about in I don't is. US really we just talk supporters. see think acquisition new Is for banks. more momentum BMO, strong Yeah. clients it long-term particularly, And that for I for competitive competitive? actually it think on

the wouldn't reward get certainly any the – bank I So our today. over but think going that happening change Might actually as substantially, well. you our what's and I but overly do what's hear, wanted And our to not risk appetite, not on. will risk change very cycle through not extent not be that's exercised Hopefully, helps. bank what to well

Thank It you. does help.

Thank you.

Scotiabank. ahead. is Meny Please from question Grauman from go Following

morning. Good Hi.

little about look think hoping in expenses quarter-over-quarter. One that of was get the is in business. non-interest two if the I X% bit revenue. questions US color sequential on. to one, at on Just decline the dollars, US I results a more the I other aspects P&C up Two And

point So unusual going provide jump. wondering quarter from US view? there Is in the more could expense if anything P&C an you on of that in business on expense detail the

this So again. is Dave

the operating have leverage. you unusual. positive Let fact continue first. to me at it year, now several And but quarters, ratio not positive take US going remain to we the things aspect. of expense expect a will bit quarter, well It's the question, over really I strong. We below XX and this I'm there's forward. had in if I our And couple there. that's higher last The would complicated, there's very for quite And overly little is the but leverage proud the question think expense a NIR that look it efficiency one nothing operating continue of

we in down NIR about think We million million we was have went what decline in there revenue. $XX call I $XX And a lease -- quarter-over-quarter. our

the quickly. buy all and let we loan. a a they make NII. very it, all that they revenue at that's interest. the If clients When as directly choice. residual. they equipment, going lease So to me decide They -- we actually because if to that, end take That's get And do risk NIR explain the either equipment have can just actually, buy we that they're on

equipment So as opposed the clients to have of our lease the to buy difference is, more over it. time, decided actually

to NIR. from it And so from we move goes NIR Income NII.

fees, impact portion M&A substantial have first deal, a have terms had some fees, in of in some But market record declined expect. earnings the bit decline. the quarter things of a it we that's business. And little the lastly, some those we'd -- it's while as we had So a we are not does some -- in there other syndication big

We rid of of our gotten overdraft fees. all have

a should has thing help? as And think do that's decline for the to right business. that it. Does our I well. explain that so of And And most that

That's good detail. Yeah.

overdraft, you be the that size in of impact? the on Just to would able terms

number, detail. further but decline. to This of give you NIR a relatively it's modest. get it's think the I exact some back with you portion can the quarter, I we But couldn't

Appreciate Got it. it.

you. Thank

go is ahead. question Please TD from Mendonca Mario from Securities. Following

help last, the the I costs me generally? the like or breaking you the out shareholders to to your your that that and benefiting morning. break protect the important that but the to understand still with being funding Good haven't over happening help provide up. BMO That's down, last there positive to do you just a Tayfun, way relative cost able Is quarters in yields one. on the asset way Could say, couple me out, of comments way what's yet? NIM, report margin about understand on an seen

the change you provide mix In with think, can portfolio. two into we typically important are the our helps, sort that. note. loan the as there on you Mario. of I'm discussion as up well details on around But both changes. business look well happy to as follow as factors comments that We commercial as are general, that, is Yeah. That I detailed give One more business with to that spread more directional a retail and

Okay.

about Sort else, look in of of like treasury strong. the, has there. happening talk retail net wealth, or bank I'll to then of everything the various say, The you parts call to follow-up which at the margins non-retail I'd interest that's bit US that but everything a to income? which, thing, like not your margin the non-retail in margin, been trading. really the function a there non-retail. just course, supporting And and the that domestic little retail, sort capital incorporates markets, Can just what's

the the for up. asset in to more that rates an clearly same But job as support room to maintain at us protecting time, excellent have we we NIM side, Yes. NIM. And a on treasury shared manage done our in we focus all been to moved has helped sensitivity. also direction. our And with as Look, has mean stable of the I the past, have you left

has so mentioned the comes side side, also, think, stable. and I portfolios the composition behaving of sense. in think an loan tremendously I to smaller more been that a true has a franchise, the US, certain believe in I at I is well. helping us of of that us And in in to strength have you the is as portfolio our the P&C and much asset extent, general, very the margin when bit look Canada helped And also the deposit mortgage our loan our the businesses, outperformance way that

that in be different where that the sort of Every to loan today explained slightly to in XXXX. was or composition, commercial bank then. would BMO's heavier when was is below the you up QX below follow above that, the meaningfully it mix? bank quickly QX be to where referred story? be of you -- suggesting open all just only could in very I Is BMO is where exposure? can it BMO's by Is is advantages correct these about And I would referred the the you business If margin advantages other one much part structural the XXXX. bank up comments that of that

focus strategy our think provide think more period-to-period, a to addition help. exposure in in close general, our stability in that that, But hedging is I maintaining some in I factor very would portfolio in also commercial our in our that. loan our NIM heavy big actually and

Thank you.

this about of Mario, managers matter. that, a in I'm to terms add core competency. being going it's margin around mix as does a We to The lot here talk Daryl.

on relationships. markets example, relationships time. you XX% that, manage them And earlier or about heard And how we of reminding to important the high-touch most we've talk fond commercial business, over You're those in mean business. business, how an wealth been think managing the And about business, as point. our for whether capital you it's relationship businesses, I you lead of of deposits. are in the about we commercial our sole Dave relationships When talked

a we the that to is way the input asking. you're relationship I the significant think manager approach question

Appreciate you. your Thank help.

advantage. an We think it's

Okay.

one for more. time We got

Thank you.

Securities. is ahead. question following Cormark Please from go Our from Persaud Lemar

to Bank risks the update about of Thanks. end today, for rates estimates? it's West by how then we that interest acquisition. And close I announced And the taking appreciate was out? going Thanks the greatest on should the impact the the given the getting the the my think when still from in of you accretion guys year. pushed are the to on big move deal noticed status think question. I the What of

I'm Yes. Maybe a second. ask chime I'll I'm terms in bit in to Look, wants -- on have we take have more Tayfun if say of don't timing. much the answer. the the first to little going going to he bore part and don't with you to We

see we as if view. and based XXth year. on update based involved would that the we take approximately of we what you are was that today, current on prediction. of the a back changes. announced that estimate time we best And our And that's the we'll in -- December as that at acquisition But on and it that what stand by now, Our

terms we've impact remind you neutralized of I just higher the of basically, hedged impact the from that to in the And goodwill, the the to higher on mark and want accretion, exposure rates way we moment transaction. the rate the closed

assumed. So, I would same we the say, accretion rates the with as to is estimates, respect have

upon depending get interest sensitivity if forward, they estimates the bring But as rate going stay this announced. asset more to point, we same close the once accretion rates to the continue we us. up environment strength at transaction, go we our Now, and may

what about PCL for think COVID I performing those have release you then, then And been, overlays the mentioned, didn't some that. Pat, put you numbers us for help some you And COVID-related Thanks that? around PCL. overlays? saw Okay. think would of you if those in some Can can of you

two that two macroeconomic would things to I Those million. contributed variables a about the been as would together $XXX have growth. roughly mentioned, otherwise Sure. deterioration The in factors have a loan and build, were

have you, the would back on And size that, reducing going were reduction out COVID, came of migration get would a QX minus so, close probably into want made into of of That judgment. to to the X% three that hit total for was by tell offset pretty XXXX in COVID, now. been quarters overlays. of provision high positive we the overlay. plus or of up don't I we in credit and a our row in as the zero I and it's

We environment. heading into an are

the models understand uncertain, we expect loss that it's can recession. difficult While estimation our

is, I think short stop being to all I giving out specific come going numbers. can it to I So, you all of expect else equal, down, would tell to but continue I'm

fair. Appreciate Thanks, time. That’s the guys.

would like That's I we you. meeting over to back the Thank the Darryl to have turn time questions. for White. now for

for advised if being in somebody have got time the that one you've more, operator, queue. I'm I'm we just do just --

do We go from have Darko Capital Please Mihelic Markets. Certainly. RBC ahead.

thanks of I'm be in. answered, Hey, interest going squeezing and to questions time. My been have main especially me so quick, for very in asked the

to things down heard couple though, that wanted a of Just morning. I this pin on

a was And was respect earnings in we're your corporate, to question if regarding can when indices you the correctly, If Tayfun, I levered to then just Can your that just markets. like lending with the out do answer at expected one or question heard that marks fees include out you that? thing those $X First, book marks capital sounds look in around you. us there, confirm, loan the accrued on give quarter, are hand the per you the I marks left billion. versus those with taking not? it Thank

Hi Darko, it's Pat.

only on the First, the losses. in on loan sizing the I is for lending take book gave provision leverage loaXn book, loan we that that particular. for credit And book,

underwriting markdowns the book. talking to $XX the the about, apply that Now you're million

just a very that over separate So sized $X where book, at and that's I billion. is that

it? that question other was One losses separate of no. very takes PCL takes as Dan's I that And Did answer things. think and those business. two the or mark-to-market So I flow your think one through

or on Are fees there I not? mark that went Sorry, accrued in mute.

Apologies. The That's inclusive answer of to that is fees. yes.

And the then to over corporate. Thanks. on Okay. Tayfun just

Yes.

On aberration. side, Darko, an was the this bit clearly a little corporate quarter of

term, for to two probably back and we'll guidance near go then give you when prior the the year-end. the So, get we quarters average XXXX we in will of to

much Q&A End Okay, just. in for great. very of squeezing me Thanks

we for to So, the Mr. White. questions. that's have Back time all you

I complex you want thank recognize his all to know, across I having off I hope made, operator, a take years. with all adviser, our defined few bank, and the market that close, Throughout impact response one have and I the strongest last and function through a calls these have of our He's Pat Cronin, you, career, environment CRO, the the running after to I'm because introducing for has significant ever a strong. you're call to quarter. announced COVID-XX recently his I retire performance with bankers and worked steered trusted of who intention as credit risk your of BMO. including key and do moment years to as to XX And all you not themes, conclude incoming you Piyush think going do, expertly I nearly we next remains forward with. Pat always Agrawal, our Thank questions. I look and want credit the to to our he's before

Number we're fundamentally mix, lastly, protect consistent results delivering overall believe, with and the of strength our growth managed, were two, given deliver allowance that XX% us whole. particularly of pressures, inflationary environment operating financial forward it's enables And strong the performance. in leverage as we We committed coverage have we're year-to-date for PPPT Expenses bank. taken positive from really and P&C and grow business well a significant to the and position is perform a to with in advantaged year. set any to going our remain

thank we in all the for you call, So you again December. participating and in speaking look forward to to

and The participation. this you thank Please lines disconnect for now your we at you. Thank has time, your conference ended.