Event Transcript

13th ANNUAL CANADIAN FINANCIAL SERVICES CONFERENCE March 25, 2015 CORPORATE PARTICIPAN TS Darryl White Bank of Montreal - Group Head, BMO Capital Markets Peter Routledge National Bank Financial - Analyst Caution Regarding Forward-Looking Statements Bank of Montreal’s public communications often include written or oral forward-looking statements. Statements of this type are included in this document, and may be included in other filings with Canadian securities regulators or the U.S. Securities and Exchange Commission, or in other communications. All such statements are made pursuant to the “safe harbor” provisions of, and are intended to be forward-looking statements under, the United States Private Securities Litigation Reform Act of 1995 and any applicable Canadian securities legislation. Forward-looking statements may involve, but are not limited to, comments with respect to our objectives and priorities for 2015 and beyond, our strategies or future actions, our targets, expectations for our financial condition or share price, and the results of or outlook for our operations or for the Canadian, U.S. and international economies. By their nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties. There is significant risk that predictions, forecasts, conclusions or projections will not prove to be accurate, that our assumptions may not be correct and that actual results may differ materially from such predictions, forecasts, conclusions or projections. We caution readers of this document not to place undue reliance on our forward-looking statements as a number of factors could cause actual future results, conditions, actions or events to differ materially from the targets, expectations, estimates or intentions expressed in the forward-looking statements. The future outcomes that relate to forward-looking statements may be influenced by many factors, including but not limited to: general economic and market conditions in the countries in which we operate; weak, volatile or illiquid capital and/or credit markets; interest rate and currency value fluctuations; changes in monetary, fiscal or economic policy; the degree of competition in the geographic and business areas in which we operate; changes in laws or in supervisory expectations or requirements, including capital, interest rate and liquidity requirements and guidance; judicial or regulatory proceedings; the accuracy and completeness of the information we obtain with respect to our customers and counterparties; our ability to execute our strategic plans and to complete and integrate acquisitions, including obtaining regulatory approvals; critical accounting estimates and the effect of changes to accounting standards, rules and interpretations on these estimates; operational and infrastructure risks; changes to our credit ratings; general political conditions; global capital markets activities; the possible effects on our business of war or terrorist activities; disease or illness that affects local, national or international economies; natural disasters and disruptions to public infrastructure, such as transportation, communications, power or water supply; technological changes; and our ability to anticipate and effectively manage risks associated with all of the foregoing factors. We caution that the foregoing list is not exhaustive of all possible factors. Other factors and risks could adversely affect our results. For more information, please see the Enterprise-Wide Risk Management section on pages 77 to 105 of BMO’s 2014 Annual MD&A, which outlines in detail certain key factors and risks that may affect Bank of Montreal’s future results. When relying on forward-looking statements to make decisions with respect to Bank of Montreal, investors and others should carefully consider these factors and risks, as well as other uncertainties and potential events, and the inherent uncertainty of forward-looking statements. Bank of Montreal does not undertake to update any forward-looking statements, whether written or oral, that may be made from time to time by the organization or on its behalf, except as required by law. The forward-looking information contained in this document is presented for the purpose of assisting our shareholders in understanding our financial position as at and for the periods ended on the dates presented, as well as our strategic priorities and objectives, and may not be appropriate for other purposes. Assumptions about the level of default and losses on default were material factors we considered when establishing our expectations regarding the future performance of the transactions into which our credit protection vehicle has entered. Among the key assumptions were that the level of default and losses on default would be consistent with historical experience. Material factors that were taken into account when establishing our expectations regarding the risk of future credit losses in our credit protection vehicle and risk of loss to Bank of Montreal included industry diversification in the portfolio, initial credit quality by portfolio, the first-loss protection incorporated into the structure and the hedges into which Bank of Montreal has entered. Assumptions about the performance of the Canadian and U.S. economies, as well as overall market conditions and their combined effect on our business, are material factors we consider when determining our strategic priorities, objectives and expectations for our business. In determining our expectations for economic growth, both broadly and in the financial services sector, we primarily consider historical economic data provided by the Canadian and U.S. governments and their agencies. See the Economic Review and Outlook section of our First Quarter 2015 Report to Shareholders. Non-GAAP Measures Bank of Montreal uses both GAAP and non-GAAP measures to assess performance. Readers are cautioned that earnings and other measures adjusted to a basis other than GAAP do not have standardized meanings under GAAP and are unlikely to be comparable to similar measures used by other companies. Reconciliations of GAAP to non-GAAP measures as well as the rationale for their use can be found in Bank of Montreal’s First Quarter 2015 Report to Shareholders and BMO’s 2014 Annual Report, all of which are available on our website at www.bmo.com/investorrelations. Examples of non-GAAP amounts or measures include: efficiency and leverage ratios; revenue and other measures presented on a taxable equivalent basis (teb); amounts presented net of applicable taxes; adjusted net income, revenues, non-interest expenses, earnings per share, effective tax rate, ROE, efficiency ratio and other adjusted measures which exclude the impact of certain items such as, acquisition integration costs, amortization of acquisition-related intangibles assets and decrease (increase) in collective allowance for credit losses. Bank of Montreal provides supplemental information on combined business segments to facilitate comparisons to peers. MARCH 25, 2015 - Bank of Montreal at NBF Canadian Financial Services Conference PRESENTATION Peter Routledge - National Bank Financial - Analyst I would like to introduce to you to my right, Darryl White, who was appointed Group Head of BMO Capital Markets in November 2014. Previously he was Head of Global Investment and Corporate Banking at BMO and has been with BMO since 1994. Darryl, thank you for being here. Darryl White - Bank of Montreal - Group Head, BMO Capital Markets Thank you for having me. Peter Routledge - National Bank Financial - Analyst So you are fairly new to your role, at least as Head of BMO Capital Markets. What are your observations so far? Darryl White - Bank of Montreal - Group Head, BMO Capital Markets You are quite right; I am five months in the chair so it is kind of an interesting and appropriate time to ask the question. I should say I have been 20 plus years at capital markets and 10 years plus in management chairs at BMO Capital Markets. So as I think about observations so far, your first thought goes to strategy and as a co-architect of the strategy that we have been on which I would say has been very clear and consistent for the last five years, one of the key messages that my partner, Pat Cronin and I went out on our internal series of town halls in the fall with is that the strategy isn't changing. So we are quite happy with the strategy. We like our positioning. We think we've got an opportunity to operationalize that strategy even better in the next five years than we have in the last five years. There are some places where we may tweak the way we operationalize that strategy. You have seen some changes with respect to resource deployment and we will look at others. But on the big S strategy, my observation is that I like it and I think we are going to continue to do it. The question that I often deal with when we talk about that is with respect to the differentiation of our North American strategy perhaps relative to others and we are quite clear in talking about our strategy as a North American strategy and that doesn't mean it is the same in all the geographies. If you look at our Canadian business, we are very consistent in saying that we want to have a top three market share in all of our products and all of our sectors and all of our asset classes and for the most part we attain that objective. And when we don't, we have some difficult conversations and we try to make sure that we get back into that objective. In the U.S. our strategy is quite different. We talk about having a much more focused strategy and we focus that strategy in the mid-market in the U.S. and that mid-market for us is defined by the $200 million to $5 billion market cap target zone across the sectors that we have chosen to participate in which is not all of the sectors that you could choose to participate in and across most but not all asset classes.

Load more