BMO Financial wealth management arm has reported a rise in income in Q3 2020 despite the challenging market conditions triggered by the Covid-19 pandemic. However, higher credit loss provisions dampened the group performance.
Key wealth management metrics
The division’s reported net income for the three-month-period ending 31 July 2020 stood at C$341m ($258.7m). This is a 37% surge from the year-ago figure of C$250m.
Go deeper with GlobalData
The division’s adjusted net income, which excludes the amortisation of acquisition-related intangible assets, increased 35% year-on-year to C$349m.
In traditional wealth, reported net income soared 20% to C$271m while adjusted net income increased 19% to C$279m.
The growth was attributed to lower expenses, including benefits from cost containment programmes, as well as stronger global markets.
The wealth management unit’s total revenue of C$2.48bn was 18% higher than the previous year.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataStronger global markets and favourable foreign exchange resulted in a 5% rise in assets under administration to C$411.12bn.
Assets under management increased 7% to C$498.02bn.
BMO Capital Markets
This unit was another growth driver at the bank.
Reported net income at the unit was C$426m in Q3 2020, a 36% surge from Q3 2019.
The unit’s adjusted net income increased 36% year-on-year to C$435m.
Group highlights for BMO in Q3 2020
At a group level, BMO Financial’s reported net income dropped to C$1.23bn from C$1.56bn as it set aside more money in loan loss provisions linked to the pandemic.
Provisions for credit losses in Q3 2020 were C$1.05bn, compared with C$306m a year ago and C$1.12bn in the previous quarter.
Adjusted net income dropped to C$1.26bn from C$1.58bn.
BMO Financial Group CEO Darryl White said: “This quarter, we continued to deliver on our commitment to expense management, a critical and appropriate lever in the current environment. Expenses declined 2% from the prior quarter and year-over-year. Operating leverage for the quarter was 5.3% and year-to-date operating leverage was strong at 2.9%.
“We are moving forward with a strong foundation and good operating momentum, and are well positioned to withstand both economic headwinds and recovery.”
