RNS No 1118d
BANK OF MONTREAL
26th August 1997
Bank of Montreal Reports Third Quarter Results
TORONTO, August 26, 1997 - Bank of Montreal reported net income for the quarter
ended July 31, 1997, of $372 million, up 23.7 per cent from $300 million in
1996. Fully diluted earnings per share were $1.31 ($1.34 basic), up 22.4 per
cent from $1.07 ($1.09 basic) last year. Return on equity was 19.1 per cent,
up from 17.3 per cent in 1996.
Net income through the first three quarters was $1.008 million, up 14.9 per cent
from $877 million in 1996, while fully diluted earnings per share were $3.58
($3.64 basic), up 15.9 per cent from $3.09 ($3.15 basic) one year ago. Return on
equity for the three quarters was 18.0 per cent compared to 17.3 per cent in
1996.
"The North American economy is posting its strongest sustained growth of the
decade and that has added to the solid performance of the bank," said Matthew
Barrett, Chairman and Chief Executive Officer, Bank of Montreal.
"The investments that Bank of Montreal has been making over the last several
years in treasury, investment banking and alternate delivery channels, together
with the benefits of geographic and line of business diversification, are
producing results and serving customers and shareholders.
"Low interest rates and inflation, along with reduced unemployment are fueling
consumer spending on durables, including housing, leading to growth in key areas
such as residential mortgages. As well, investment banking and brokerage
activity is also being driven by the favorable economic climate," said Mr
Barrett.
In its recent mid-year review, Bank of Montreal's Economics department projects
that the Canadian economy will grow 3.5 per cent in 1997 and that more than
300,000 jobs Will be created this year.
"New residential mortgage approvals for the bank have reached record levels
every month during the first three quarters of the fiscal year. Due to low
mortgage rates and home prices, housing attractiveness is close to its highest
level in three years," said Mr. Barrett.
In Canada, average residential mortgages grew $3.9 billion from the prior year
to $30.9 billion. Card and other personal loans were up $1.3 billion to $14.3
billion. Similar trends occurred in the U.S., where average loans grew by $4.2
billion, driven primarily by strong growth in personal and commercial lending at
Chicago-based Harris Bank.
Volume Growth Remains Strong
Net interest income increased 15.7 per cent over last year. Major contributors
to the increase were business volume growth and earnings from bonds and equities
of lesser-developed countries ($45 million), partially offset by narrower
margins.
Non-interest revenue for the quarter increased by $180 million or 28.3 per cent
over 1996. Investment banking operations and treasury revenues contributed to
this increase.
Expense Growth and Investments for the Future
Non-interest expense in the third quarter increased 17.5 per cent over last
year. The increase reflects revenue-driven expenses in investment banking and
treasury operations, costs related to strategic investments for future growth
including alternate delivery channels such as mbanx and telephone banking, and
business expansion in treasury related products and services.
Strong Asset Quality
Net impaired loans reduced by $743 million from the end of the third quarter
last year to a credit balance of $254 million at the end of the same quarter
this year. Net impaired loans consist of gross impaired loans, less the
allowance for credit losses.
The bank's current 1997 forecast annual provision for credit losses has been
maintained at $275 million, unchanged from the second quarter. The final
provision will be determined in the fourth quarter, as will the allocation
between general and specific reserves.
U.S. Comparability
Due to different accounting treatments for business acquisitions in the United
States and Canada, there is increasing use of cash basis reporting to provide a
more consistent basis for comparing bank results. On a cash basis, which
excludes goodwill from both income and equity when comparing return on equity,
the third quarter return on equity would be 22.1 per cent compared to 19.8 per
cent last year, with cash basis earnings per share of $1.41 compared to $1.14
last year.
Income from Outside Canada Increases
Earnings from outside Canada are $521 million, representing 51.7 per cent of
total income during the first three quarters of the fiscal year. In fiscal 1996,
the bank's outside Canada income was 47.0 per cent.
Earnings from Mexico for the first nine months increased, reflecting the effect
of the bank's acquisition last year of a 16 per cent equity stake in Grupo
Financiero Bancomer. The contribution from Bancomer on a year-to-date basis is
$43 million. In addition, a foreign exchange gain of $21 million was recorded in
retained earnings, in accordance with Canadian accounting principles.
"Trade throughout North America has increased dramatically in the first three
years of NAFTA. The meeting of Bank of Montreal's board of directors in Mexico
City last month emphasized our commitment to continue developing business in
all three NAFTA countries," said Mr. Barrett.
Paid $972 million in Taxes and Govemment Levies
In the first three quarters of the fiscal year, income resulted in $972 million
in taxes and government levies, representing 48.0 per cent of income before
taxes and government levies. Salaries and employee benefits payments amounted to
$1.9 billion, compared to $1.6 billion in 1996.
Bank of Montreal, Canada's first bank, is a highly diversified financial
services institution that ranks as one of the 10 largest banks in North America
with average assets of $203 billion. The bank's group of companies includes
Nesbitt Burns, one of Canada's largest full-service investment firms,
Chicago-based Harris Bank, a major U.S. mid-west financial institution and
mbanx, the first North American virtual banking unit. Bank of Montreal has an
equity position in and an alliance with Grupo Financiero Bancomer, the leading
Mexican financial institution.
Media Relations Contacts: Investor Relations Contacts:
Joe Barbera (416) 927-2740 Cathy Cranston (416) 867-6656
Ronald Monet (514) 877-1101 Bob Wells (416) 867-4009
Internet: http://www.bmo.com
FINANCIAL HIGHLIGHTS
(Canadian $ in millions except as noted)
For the three months ended For the nine months ended
July 31, Apr 30, July 31, Change from
1997 1997 1996 July 31, 1996
Net Income Statement
Net Interest Income (TEB)(a) $ 1,054 $ 1,032 $ 911 15.7 %
Other Income 811 702 831 28.3
Total revenue (TEB)(a) 1,885 1,734 1,542 20.9
Provision for credit losses 68 69 43 57.1
Non-Interest expense 1,147 1,117 977 17.5
Provision for Income taxes (TEB)(a) 272 228 217 25.2
Non-controlling interest in subsidiary 6 6 5 25.8
Net Income 372 314 300 23.7
Taxable equivalent adjustment 28 28 28 (1.1)
Per Common Share ($)
Net Income - basic $ 1.34 $ 1.13 $ 1.09 $ 0.26
- fully diluted 1.31 1.11 1.07 0.24
Dividends declared 0.40 0.40 0.36 0.04
Book value per share 28.54 27.66 25.52 3.02
Market value per share 57.45 50.70 32.75 24.70
Total market value of common shares
($ billions) 15.0 13.2 8.5 6.5
For the nine months ended
July 31, July 31, Change from
1997 1996 July 31, 1996
Net Income Statement
Net Interest Income (TEB)(a) $ 3,095 $ 2,746 12.7 %
Other Income 2,210 1,871 18.1
Total revenue (TEB)(a) 5,306 4,617 14.9
Provision for credit losses 206 181 13.8
Non-Interest expense 3,344 2,872 16.4
Provision for Income taxes (TEB)(a) 729 672 8.4
Non-controlling Interest in subsidiary 18 15 23.9
Net Income 1,008 877 14.9
Taxable equivalent adjustment 81 77 4.4
Per Common Share ($)
Net Income - basic $ 3.64 $ 3.15 $ 0.49
- fully diluted 3.68 3.09 0.49
Dividends declared 1.20 1.08 0.12
Book value per share 28.54 25.52 3.02
Market value per share 57.45 32.75 24.70
Total market value of common shares
($ billions) 15.0 8.6 6.5
As at
July 31, Apr 30, July 31, Change from
1997 1997 1996 July 31, 1996
Balance Sheet Summary
Assets (b) $ 196,209 $ 200,423 $ 162,646 21.9 %
Loans 112,068 115,345 96,284 16.4
Deposits 138,485 138,942 118,108 15.6
Capital funds 12,057 12,396 10,826 11.4
Common equity 7,432 7,202 6,610 12.4
Net impaired loans and
acceptances (254) (3) 489 (151.9)
Average Balances
Loans 118,086 113,090 96,663 22.9
Assets (b) 203,386 196,470 161,190 26.2
(a) Reported on a taxable equivalent basis (TEB).
(b) Reporting of unrealized gains and losses on interest rate and foreign
exchange contracts held for trading related activities is on a gross rather
than a net basis, adopted in 1997. Prior periods have not been restated to
give effect to this change.
CONSOLIDATED STATEMENT OF INCOME
(unaudited) For the three months ended For the nine months ended
(Canadian $ in millions
except number of common shares)
July 31, Apr 30, July 31, July 31, July 31,
1997 1997 1996 1997 1996
Interest, Dividend
and Fee Income
Loans $ 2,108 $ 1,962 $ 1,863 $ 5,948 $ 5,572
Securities 522 517 522 1,563 1,579
Deposits with banks 360 317 251 954 736
2,990 $ 2,796 2,626 8,465 7,887
Interest Expense
Deposits 1,376 1,261 1,305 3,831 3,953
Subordinated debt 74 75 64 221 178
Other liabilities 514 456 374 1,399 1,087
1,964 1,792 1,743 5,451 5,218
Net Interest Income 1,026 1,004 883 3,014 2,669
Provision for
credit losses 68 69 43 208 181
Net Interest Income
After Provision for
Credit Losses 958 935 840 2,808 2,488
Other Income
Deposit and payment
service charges 130 124 119 379 349
Lending fees 62 63 51 171 143
Capital market fees 218 237 194 871 569
Card services 69 60 61 194 169
Investment management
and custodial fees 74 68 60 203 197
Mutual fund revenues 43 36 25 111 58
Trading revenues 140 51 69 277 236
Other fees and
commissions 67 63 52 204 158
811 702 631 2,210 1,871
Net Interest and
Other Income 1,769 1,637 1,471 5,018 4,359
Non-interest Expense
Salaries and
employee benefits 637 627 561 1,859 1,636
Premises and
equipment 216 210 178 629 538
Communications 60 61 53 181 162
Other expenses 215 200 173 619 500
1,128 1,098 965 3,288 2,836
Goodwill and other
valuation
intangibles 19 19 12 56 36
Total non-interest
expense 1,147 1,117 977 3,344 2,872
Income Before Provision
for Income Taxes 622 520 494 1,674 1,487
Provision for
Income taxes 244 200 189 648 595
Income Before Non-
Controlling Interest
in Subsidiary 378 320 305 1,026 892
Non-controlling
interest 6 6 5 18 15
Net Income $ 372 $ 314 $ 300 $ 1,008 $ 877
--------------------------------------------------------------------------------
Dividends Declared
- preferred shares $ 23 $ 20 $ 17 $ 60 $ 52
- common shares $ 104 $ 104 $ 94 $ 312 $ 282
--------------------------------------------------------------------------------
Average Number
of Common
Shares
Outstanding 260,414,763 260,253,447 260,070,971 260,239,164 261,849,939
Average Assets $ 203,366 $ 196,470 $ 181,190 $ 193,992 $ 155,688
--------------------------------------------------------------------------------
CONDENSED CONSOLIDATED BALANCE SHEET
(unaudited) (Canadian $ in millions) As at
July 31, 1997 April 30, 1997 July 31, 1996
Cash resources $ 28,252 $ 28,996 $ 21,252
Securities 39,410 36,985 34,547
67,662 65,981 55,799
Loans
Residential mortgages 33,839 32,291 29,285
Consumer installment and other
personal loans 14,243 13,954 12,643
Credit card loans 2,480 3,836 3,671
Loans to businesses and governments 44,535 45,116 39,514
Securities purchased under resale
agreements 18,119 21,282 12,203
113,216 116,479 97,316
Allowance for credit losses (1,148) (1,134) (1,032)
112,068 115,345 96,284
Customers' liability under acceptances 6,117 4,717 4,366
Other assets 13,362 14,380 6,097
Total Assets $ 198,209 $ 200,423 $ 162,546
Deposits
Banks $ 31,194 $ 29,389 $ 26,504
Businesses and governments 47,588 49,877 35,553
Individuals 57,703 57,676 56,051
136,485 136,942 118,108
Acceptances 5,117 4,717 4,366
Securities sold but not yet purchased 13,178 11,483 1l,437
Securities sold under repurchase
agreements 19,236 20,353 11,582
Other liabilities 12,136 14,532 6,227
49,667 51,085 33,612
Subordinated debt 3,359 3,923 3,350
Shareholders' equity Share Capital
Preferred shares 1,266 1,271 866
Common shares 3,001 2,999 2,973
Retained earnings 4,431 4,203 3,637
8,698 8,473 7,476
Total Liabilities and
Shareholders' Equity $ 198,209 $ 200,423 $ 162,546
Notes:
(1) These consolidated financial statements have been prepared in accordance
with Canadian generally accepted accounting principles, including the
accounting requirements of the Superintendent of Financial Institutions
Canada.
(2) Comparative figures are reclassified to conform with the current year's
presentation. Reporting of unrealizod gains and losses on interest rate and
foreign exchange contracts held for trading related activities is on a gross
rather than a net basis, adopted in 1997. Prior periods have not been
restated to give effect to this change.
END
Bam Groep (Kon) (LSE:BAM)
Historical Stock Chart
From Jun 2024 to Jul 2024
Bam Groep (Kon) (LSE:BAM)
Historical Stock Chart
From Jul 2023 to Jul 2024
