BMO Financial wealth management arm has demonstrated resilience in a challenging market, reporting a strong fourth quarter (Q4). Overall, the group too surpassed expectations driven by a double-digit growth in both capital markets and wealth divisions.

Wealth management highlights

The unit’s reported net income was C$320m ($247.2m) for the three-month-period ending 31 October 2020, a 20% surge from C$266m in the previous year and down from C$341m in the previous quarter.

Adjusted net income climbed 9% to C$328m from C$300m over the period.

In traditional wealth, reported net income increased 7% to C$253m while adjusted net income rose 6% to C$261m.

Revenue dropped 16% to $1.31bn from C$1.57bn.

Higher online brokerage revenues and the benefit from higher global markets positive affected traditional wealth revenue which rose 2% to C$1.18bn.

“Stronger global markets, growth in client assets and favourable foreign exchange” drove growth in assets under management and assets under administration which grew 2% to C$482.55bn and 5% to C$411.96bn, respectively.

BMO Capital Markets

The unit was a key growth driver, with reported net income jumping 40% year-on-year to C$379m.

The division’s adjusted net income soared 38% to C$387m from C$282m.

Revenue increased 17% to C$1.38bn, with strong client activity across interest rates, equities as well as commodities trading resulted in a rise in Global Markets revenue.

Group performance

At a group level, the bank registered C$1.58bn in net income in the three months to October 2020, versus C$1.19bn in the prior year.

It put aside C$432m in loan loss provisions during this quarter, down from C$1.05bn in the previous quarter.

Revenue dipped to C$5.98bn from almost $6.09bn.

BMO Financial Group CEO Darryl White said: “In 2020, adjusted earnings per share were $7.71, having appropriately provisioned for loan losses. Adjusted pre-provision, pre-tax earnings increased 7%, as we held expenses stable to last year, delivered above-target positive operating leverage of 2.7%, improved our efficiency by 160 basis points from last year and maintained strong capital and liquidity positions.”

“As we look ahead to 2021, we are continuing to accelerate the execution of our strategy and our Purpose, to Boldly Grow the Good in business and life.”