Bank of Montreal (BMO) Q4 2022 Earnings Call Transcript

For the period ending October 31, 2022

December 1, 2022 8:30 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good morning, and welcome to the BMO Financial Group's Q4 2022 earnings release and conference call for December 1, 2022. Your host for today is Christine Viau. Please. go ahead.

Christine Viau

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

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

And with that, I'll turn the call over to Darryl.

Darryl White

Thank you, Christine, and good morning, everyone. Today, we announced adjusted earnings per share of $3.04 for the fourth quarter, closing out another strong year where we delivered record net income of $9 billion and EPS of $13.23. This year, we continued to execute on our strategy to strengthen and grow each of our diversified businesses to deliver sustained performance.

Of note, including 2022, we've achieved consistent pre-provision pretax earnings growth and met our commitment to positive operating leverage in each of the last five years. Over that period, our efficiency ratio has improved by over 600 basis points to 55.8%. And we remain committed to delivering positive operating leverage and efficiency improvement going forward.

We've achieved these consistent results against a rapidly changing economic backdrop that included the worst health challenge of our time and a wide range of interest rate and market conditions.

For 2022, PPPT was up 7%, building on 19% growth last year. And operating leverage was 1.3% as we increased our investment in our business to drive revenue growth and absorb the higher impact of inflation.

Return on equity of 15.2% this year remains above our midterm target, even while building capital through the year in advance of the acquisition. Our proven track record of dynamically managing our business and maintaining our strategic focus to deliver resilient operating and credit performance through market cycles gives me confidence that we are built to sustain performance in any environment.