Bank of Montreal (BMO) Q2 2022 Earnings Call Transcript

For the period ending APRIL 30, 2022

May 25, 2022 8:15 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good morning, and welcome to the BMO Financial Group Q2 2022 Earnings Release and Conference Call for May 25, 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 Barkley from BMO Capital Markets; and Deland Kamanga from BMO Wealth Management.

As noted on Slide 2, 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 otherwise noted as reported. And with that, I'll turn the call over to Darryl.

Darryl White

Thank you, Christine, and good morning, everyone. We continued to deliver good financial performance this quarter, driven by broad-based customer loan growth in our North American P&C and Wealth Businesses and solid results in our market-sensitive businesses.

Second quarter adjusted earnings per share improved to $3.23, with continued positive operating leverage and strong pre-provision pretax earnings growth of 6%.

Year-to-date, PPPT is up 12%, driven by strong revenue growth and continued expense management that includes targeted investments for future growth. With operating leverage of 3.3% and an efficiency ratio of 54.7% year-to-date, we are delivering on our commitment for positive operating leverage for the year.

This morning, we also announced a dividend increase of $0.06 to $1.39 per share, an increase of 5% over last quarter and 31% over last year. We continued to strengthen our capital, including executing the planned equity issuance and are well positioned to support both client-driven balance sheet growth and the Bank of the West acquisition. ROE remains our key area of focus, guiding our strategic investment decisions as we manage the bank and our businesses for sustained profitable growth.

Year-to-date, ROE was 17.2%, up from the same period last year as we continue to drive initiatives to improve the profitability of our businesses.