Bank of Montreal (BMO) Q3 2022 Earnings Call Transcript

For the period ending JULY 31, 2022

August 30, 2022 8:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

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. 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 Pat Cronin, 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 2, forward-looking statements 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 otherwise noted as reported.

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

Darryl White

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

Third quarter adjusted earnings per share were $3.09, driven by a very strong performance in our North American P&C businesses. Robust loan growth and margin expansion drove record revenue and over 15% pre-provision pretax earnings growth in both Canadian and U.S. P&C more than offsetting lower revenue in capital markets, which was impacted by more challenging market conditions.

While the economic environment remains uncertain, there are signs that Central Bank action named at taming inflation are having an effect. While economic activity is moderating, low unemployment and still high consumer and business savings are likely to provide some buffer to the downturn.

In the context of slower growth for the Canadian and U.S. economies, we, at BMO, are operating from a position of strength. Credit remains benign with strong reserves for loan losses, to which we added modestly this quarter.