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YouKuai Group Brand Z-Rou Meat Signs a Distribution Agreement With IS Seafood

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The premium plant-based meat brand Z-Rou Meat has formed a strategic cooperation with IS Seafood, a sustainable B2B seafood supplier, which is a significant step in continuing its market efforts on sales and distribution. The agreement was signed in Shanghai.

Z-Rou Meat officially launched in China last December and started delivering delicious, wholesome plant-based ˜meat to mainstream restaurants. This iconic future food is made with 100% plant ingredients including non-GMO soybeans, konjac, coconut oil and shiitake. All ingredients are locally sourced, and the end product is 87% more efficient compared with traditional pork production in terms of environmental impact.

YouKuai Group, the company behind Z-Rou Meat, holds the vision of empowering consumers and chefs with tasty and sustainable plant-based meat alternatives. With Z-Rou Meat, people with different dietary habits can sit together at a dining table and enjoy the same food, while being more environmentally responsible.

Sustainability has been a core value of IS Seafood since day one. The teams philosophy is to leave more than they take from Mother Nature. Being an expert and leader in the industry, IS Seafood has successfully built a network with top restaurants in China. Biggi Stefansson, the Founder and CEO of IS Seafood, thinks that Z-Rou Meat is going to be successful and we are supporting our clients to fulfill the demand from their customers.

We all care about the future. We all care about our health. We care about our children. We feel its important to reduce meat consumption based on environmental factors. When Z-Rou approached me, I was immediately sold, not only about the product but also about the love and passion from the team. I feel IS Seafood and Z-Rou Meat are much aligned on our core values and where we want to head in the future. We are looking forward to introducing this futuristic and tasty product into our network, said Biggi.

Celebrity Chef David Laris who worked closely in bringing the three magnificent companies together, expresses his feelings on the great progress: Im personally excited to contribute and close a deal with profound meaning. I hope to see that more environmentally conscious companies enter the consistently developing plant-based market and gain a firm foothold there. David is part of Acorn Digital team, a leading digital agency that assisted in Z-Rou Meats launch in China, who is devoted to sustainability.

When the Founder of Z-Rou Meat, Franklin Yao, was in the US last year, he drew inspiration from eating a lot of Impossible burger and Beyond sausage. It struck him that somebody was going to do this for China, for ground pork, and for Chinese dishes like Mapo Tofu, dumplings, and for Lions Head meatballs and it should be started from Shanghai. He founded Z-Rou Meat afterwards, and is happy to see growing momentum for this space with the likes of Omnipork entering China.

Franklin mentioned: We envision Z-Rou Meat as a global brand from China to serve the entire world, to empower customers who want good food and make choices to do more good. We are extremely fortunate to find like-minded allies in Biggi and David. We are at the point in our lives where our mission is to build businesses that create a better world.

Media

Liqin Lu

[email protected]

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China Zenix Auto International Limited Reports 2020 Third Quarter Financial Results

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ZHANGZHOU, China, Dec. 1, 2020 /PRNewswire/ — China Zenix Auto International Limited (OTC: ZXAIY) (“Zenix Auto” or “the Company”), one of the largest commercial vehicle wheel manufacturers in China in both the aftermarket and OEM market by sales volume, today announced its unaudited financial results for the third quarter ended September 30, 2020.

Financial Highlights

Third Quarter 2020:

  • Revenue was RMB488.3 million (US$71.9 million), down 8.2% year-over-year
  • Sales to the Chinese OEM market increased by 19.7% year-over-year
  • Sales of tubeless steel wheels represented 55.0% of the third quarter revenue
  • Sales of aluminum wheels accounted for 11.7% of total sales
  • Net loss and total comprehensive loss was RMB101.6 million (US$15.0 million) with basic and diluted loss per American Depositary Share (“ADS”) of RMB1.97 (US$0.29) compared with net loss and total comprehensive loss of RMB40.3 million for the third quarter of 2019 with basic and diluted loss per ADS of RMB0.78 in the third quarter of 2019;
  • Net cash inflow from operating activities was RMB47.2 million (US$7.0 million).

First Nine Months of 2020:

  • Revenue was RMB1,311.1 million (US$193.1 million), a decrease of 34.5% year-over-year compared with RMB2,000.2 million in the first nine months of 2019;
  • Tubeless steel wheel sales decreased by 17.9% year-over-year;
  • Sales of aluminum wheels decreased by 13.9% year-over-year;
  • Net loss and total comprehensive loss for the period was RMB240.8 million (US$35.5 million) with loss per ADS of RMB4.66 (US$0.69);
  • Bank balances and cash, pledged bank deposits and fixed bank deposits with maturity period over three months totaled RMB991.0 million (US$146.0 million).

Mr. Junqiu Gao, Deputy CEO and Chief Sales and Marketing Officer of Zenix Auto, commented, “Our lower sales is a result of slower economic growth in China, uncertainties resulting from the COVID-19 affecting business decisions in China and continuing weakness in international markets. While the Chinese economy grew in the third quarter of 2020, it was at a much slower rate than in the past. International markets remain weak in the face of COVID-19, which has affected inventory planning and pricing policies across many industries in China.”

“As the leading manufacturer in the commercial wheel industry in China with a broad customer base, we made proactive adjustments to respond to the new market environment.  We realigned our resources to further improve our manufacturing efficiency through greater production automation and focusing on high-demand wheels to partially offset the effect of price reductions across the industry. We continue to generate positive cash flow from operations during the third quarter and first nine months of 2020 and to focus on maintaining a sound financial standing,” Mr. Gao concluded.

Mr. Martin Cheung, CFO of Zenix Auto, commented, “We maintained our financial strength with solid bank balances of US$99.9 million and US$42.7 million in fixed bank deposits. These amounts represented US$2.76 in cash and fixed bank deposits per ADS on September 30, 2020 including positive operating cash flow from operations of US$7.0 million generated in the third quarter of 2020.  We will continue to review our options that will best utilize our financial resources to create long-term value for shareholders.”

2020 Third Quarter Results

Revenue for the third quarter was RMB488.3 million (US$71.9 million) compared to RMB531.9 million in the third quarter of 2019. The decrease in revenue on a year-over-year basis was mainly due to a combination of the negative impact of weaker demand and price reductions in the domestic aftermarket segment and international markets.  

Sales to the Chinese OEM market were RMB348.7 million (US$51.3 million) compared to RMB291.4 million in the same quarter of 2019. Total unit sales in the OEM market increased by 32.1% year-over-year during the third quarter of 2020. The higher sales to the OEM market was mainly attributable to the strong growth in the Chinese truck market.

Aftermarket sales in China were RMB99.0 million (US$14.6 million) compared to RMB185.0 million in the third quarter of 2019. Total unit sales in this market decreased by 36.0% year-over-year. The lockdown in the first quarter of 2020 and the slowdown in domestic traffic in the second quarter had a material adverse effect on the domestic auto repair shop industry and many owners were forced to close down permanently. During the third quarter of 2020, weak demand from the international markets forced many local export-oriented wheel producers to offload their inventories into an already struggling domestic aftermarket.

International sales were RMB40.6 million (US$6.0 million) compared to sales of RMB55.5 million in the same quarter of 2019, but up from RMB35.6 million in the second quarter of 2020. Total unit sales in the international sales decreased by 17.9% year-over-year in the third quarter of 2020. The COVID-19 pandemic continues to create a challenging environment in many of the world's important automotive markets.

In the third quarter of 2020, domestic OEM sales, domestic aftermarket sales and international sales contributed 71.4%, 20.3% and 8.3% of revenue, respectively.

Sales of tubed steel wheels comprised 29.4% of the 2020 third quarter revenue compared to 45.5% in the same quarter in 2019. Tubeless steel wheel sales represented 55.0% of the third quarter revenue compared to 41.2% in the same quarter of 2019. Sales of aluminum wheels accounted for 11.7% of the third quarter revenue as compared to 9.4% in the same quarter a year ago.

Third quarter gross loss was RMB25.6 million (US$3.8 million), compared to a gross profit of RMB32.9 million in the same quarter in 2019. The negative gross margin in the 2020 third quarter was mainly due to the significant drop in sales volume in both the aftermarket in China and international markets, and the wider-than-normal price cuts following the unprecedented impact from the COVID-19 outbreak. However, the production utilization rate remains at a high level.

Selling and distribution expenses increased by 13.2% to RMB39.0 million (US$5.7 million) from RMB34.5 million in the third quarter of 2019.  As a percentage of revenue, selling and distribution costs were 8.0% in the third quarter, compared to 6.5% in the same quarter a year ago. The increase in selling and distribution costs as a percentage of revenue in the third quarter of 2020 was primarily due to the significantly higher shipping costs and increased marketing campaign expenses compared with the same quarter last year.

Research and development (“R&D”) expenses increased by 25.7% to RMB17.6 million (US$2.6 million), compared to RMB14.0 million in the third quarter of 2019. R&D as a percentage of revenue was 3.6% in the third quarter of 2020, compared to 2.6% in the same quarter a year ago. The increase in R&D as a percentage of revenue in the third quarter of 2020 was primarily due to lower sales and increased new product development projects compared with the same quarter last year. The Company increased its R&D initiatives for new product development, associated new materials development, new light-weight product design, and new production equipment development.

Administrative expenses were RMB36.0 million (US$5.3 million), an increase of 14.9% from RMB31.3 million in the third quarter of 2019. The increase in administrative expenses in the third quarter of 2020 compared with the same quarter last year was primarily due to increased salaries to retain the core team members, increased medical benefits for the staff and new staff dormitory fees.  As a percentage of revenue, administrative expenses were 7.4%, compared to 5.9% of revenue in the third quarter of 2019. The increase in administrative expenses as a percentage of revenue was primarily due to significantly lower sales in the third quarter of 2020 compared with the same quarter last year.

Net loss and total comprehensive loss were RMB101.6 million (US$15.0 million) in the third quarter compared to net loss and total comprehensive loss of RMB40.3 million for the same quarter of 2019. 

Basic and diluted losses per ADS were RMB1.97 (US$0.29) compared to basic and diluted losses per ADS of RMB0.78 in the third quarter of 2019.  

In the third quarter of 2020, the Company recorded net cash inflow from operating activities of RMB47.2 million (US$7.0 million) compared with a net cash inflow of RMB146.3 million in the third quarter of 2019. Capital expenditures for the purchase of property, plant and equipment in the third quarter were RMB28.8 million (US$4.2 million).  The quick ratio in the third quarter was 1.52 to 1.

During the third quarter of 2020 and 2019, the weighted average number of ordinary shares was 206.5 million and the weighted average number of ADSs was 51.6 million.

2020 First Nine Months Results

Revenue for the first nine months ended September 30, 2020 was RMB1,311.1 million (US$193.1 million) compared with RMB2,000.2 million in the first nine months of 2019.

Sales to the Chinese OEM market decreased by 20.4% year-over-year to RMB864.5 million (US$127.3 million) and represented 65.9% of revenue generated in the first nine months ended September 30, 2020. Aftermarket sales decreased by 53.5% year-over-year to RMB322.9 million (US$47.6 million) and represented 24.6% of total first nine-month revenue. International sales decreased by 43.6% year-over-year to RMB123.7 million (US$18.2 million) compared with the same period last year and represented 9.5% of revenue.

Tubed steel wheel sales for the first nine months ended September 30, 2020 decreased by 53.5% compared with the same period in 2019 and accounted for 31.9% of revenue. Tubeless steel wheel sales decreased by 17.9% from the same period a year ago and accounted for 52.7% of revenue. Aluminum wheel sales decreased 13.9% from the same period a year ago and accounted for 11.5% of revenue. Construction equipment wheel sales decreased by 32.4% and accounted for 2.2% of revenue.

Gross loss for the first nine months ended September 30, 2020 was RMB31.9 million (US$4.7 million) compared with a gross profit of RMB211.8 million during the same period in 2019. 

Net loss and total comprehensive loss for the first nine months ended September 30, 2020 was RMB240.8 million (US$35.5 million) compared with a net loss and total comprehensive loss of RMB34.5 million during the same period in 2019. Basic and diluted losses per ADS for the first nine months ended September 30, 2020 were RMB4.66 (US$0.69), compared with basic and diluted losses per ADS of RMB0.67 during the same period in 2019.

As of September 30, 2020, Zenix Auto had bank balances and cash of RMB678.0 million (US$99.9 million) and fixed bank deposits with a maturity period over three months of RMB290.0 million (US$42.7 million). Accounts receivables were RMB408.5 million (US$60.2) compared to RMB369.7 million at the end of 2019. Total bank borrowings were RMB558.0 million (US$82.2 million). Total equity attributable to owners of the Company was RMB2,193.0 million (US$323.0 million).

Conference Call Information

The Company will host a conference call on Tuesday, December 1, 2020 at 8:00 a.m. EST/9:00 p.m. Beijing Time. Please dial in five minutes before the call start time and ask to be connected to the “China Zenix Auto” conference call. Interested parties may participate in the conference call by dialing:

Phone Number: +1-877-407-0782 (North America)

Phone Number: +1-201-689-8567 (International) 

Phone Number: +86-400-120-2840 (Mainland China) 

A telephone replay of the call will be available after the conclusion of the conference call through December 31, 2020. The dial-in details for the replay are: U.S. Toll Free Number +1-877-481-4010 and International dial-in number +1-919-882-2331 using Conference ID “38554″ to access the replay.

Exchange Rate Information

The United States dollar (US$) amounts disclosed in this press release are presented solely for the convenience of the reader. All translations from RMB to U.S. dollars are made at a rate of RMB6.7896 to US$1.00, the effective noon buying rate as of September 30, 2020 in The City of New York, and for cable transfers of RMB as set forth in the H.10 weekly statistical release of the Federal Reserve Board. The percentages stated are calculated based on RMB amounts.

About China Zenix Auto International Limited

China Zenix Auto International Limited is one of the largest commercial vehicle wheel manufacturers in China in both the aftermarket and OEM market by sales volume. The Company offers approximately 883 series of aluminum wheels, tubed steel wheels, tubeless steel wheels, and off-road steel wheels in the aftermarket and OEM markets in China and internationally. The Company's customers include large PRC commercial vehicle manufacturers, and it also exports products to over 67 distributors in more than 28 countries worldwide. With six large, strategically located manufacturing facilities in multiple regions across China, the Company has a designed annual production capacity of approximately 15.5 million units of steel and aluminum wheels as of September 30, 2020. For more information, please visit: www.zenixauto.com/en.

Safe Harbor

This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “confident” and similar statements. The Company may make written or oral forward-looking statements in its periodic reports to the SEC, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement. Further information regarding these risks is included in our filings with the SEC. The consequences of the coronavirus outbreak to economic conditions and the automobile industry in general, and the financial position and operating results of our company in particular, have been material in the first nine months of 2020, are changing rapidly, and cannot be predicted. The Company does not undertake any obligation to update any forward-looking statement, except as required under applicable law. All information provided in this press release and in the attachments is as of the date of the press release, and the Company undertakes no duty to update such information, except as required under applicable law.

For more information, please contact
Kevin Theiss
Awaken Advisors
Tel: +1-(212) 521-4050
Email: [email protected]

— Tables Follow —

 

 

 

China Zenix Auto International Limited

Unaudited Condensed Consolidated Statements of Profit or Loss and Other

Comprehensive Income (Loss)

For the three months ended September 30, 2020 and 2019

(RMB and US$ amounts expressed in thousands, except number of shares and per share data)

2019

2020

2020

RMB' 000

RMB' 000

US$' 000

Revenue

531,875

488,340

71,925

Cost of sales

(498,972)

(513,928)

(75,693)

Gross profit (loss)

32,903

(25,588)

(3,768)

Other operating income 

4,200

3,008

443

Net exchange gain(loss)

1,115

(1,023)

(151)

Selling and distribution costs

(34,464)

(39,020)

(5,747)

Research and development
expenses

(13,982)

(17,576)

(2,589)

Administrative expenses

(31,348)

(36,031)

(5,307)

Finance costs

(6,202)

(6,157)

(907)

Loss before taxation 

(47,778)

(122,387)

(18,026)

Income tax credit

7,499

20,773

3,060

Loss and total
comprehensive loss for the
period

(40,279)

(101,614)

(14,966)

Loss per share

Basic

(0.20)

(0.49)

(0.07)

Diluted

(0.20)

(0.49)

(0.07)

Loss per ADS

Basic

(0.78)

(1.97)

(0.29)

Diluted

(0.78)

(1.97)

(0.29)

Shares

206,500,000

206,500,000

206,500,000

ADSs

51,625,000

51,625,000

51,625,000

 

 

 

China Zenix Auto International Limited

Unaudited Condensed Consolidated Statements of Profit or Loss and Other

Comprehensive Income (Loss)

For the nine months ended September 30, 2020 and 2019

(RMB and US$ amounts expressed in thousands, except number of shares and per share data)

2019

2020

2020

RMB' 000

RMB' 000

US$' 000

Revenue

2,000,223

1,311,088

193,102

Cost of sales

(1,788,422)

(1,342,968)

(197,798)

Gross profit (loss)

211,801

(31,880)

(4,696)

Other operating income 

13,144

8,617

1,269

Net exchange gain(loss)

1,108

(1,105)

(163)

Selling and distribution costs

(117,850)

(102,402)

(15,082)

Research and development
expenses

(42,198)

(47,685)

(7,023)

Administrative expenses

(86,525)

(98,985)

(14,579)

Finance costs

(18,230)

(18,278)

(2,692)

Loss before taxation 

(38,750)

(291,718)

(42,966)

Income tax credit

4,202

50,936

7,502

Loss and total
comprehensive loss for
the period

(34,548)

(240,782)

(35,464)

Loss per share

Basic

(0.17)

(1.17)

(0.17)

Diluted

(0.17)

(1.17)

(0.17)

Loss per ADS

Basic

(0.67)

(4.66)

(0.69)

Diluted

(0.67)

(4.66)

(0.69)

Shares

206,500,000

206,500,000

206,500,000

ADSs

51,625,000

51,625,000

51,625,000

 

 

 

China Zenix Auto International Limited

Unaudited Condensed Consolidated Statements of Financial Position

(RMB and US$ amounts expressed in thousands)

December 31
 2019

September 30
 2020

September 30
 2020

RMB'000

RMB'000

US$' 000

ASSETS

Current Assets

Inventories

129,641

168,083

24,756

Trade and other receivables and
prepayments

596,359

564,307

83,113

Pledged bank deposits

14,900

23,000

3,388

Fixed bank deposits with maturity
period over three months

290,000

290,000

42,712

Bank balances and cash

906,840

678,008

99,860

Total current assets

1,937,740

1,723,398

253,829

Non-Current Assets

Property, plant and equipment

1,076,731

1,042,679

153,570

Right-of-use assets

357,599

350,530

51,627

Long term prepayments

13,000

1,915

Deferred tax assets

54,641

99,379

14,637

Intangible assets

17,000

17,000

2,504

Deposits paid for acquisition of
property, plant and equipment

61,618

62,598

9,220

Total non-current assets

1,567,589

1,585,186

233,473

Total assets

3,505,329

3,308,584

487,302

EQUITY AND LIABILITIES

Current Liabilities

Trade and other payables and accruals

410,764

468,179

68,955

Amount due to a shareholder 

10,557

Taxation payable

982

Short-term bank borrowings

558,000

558,000

82,185

Total current liabilities

980,303

1,026,179

151,140

Non-current liabilities

Deferred tax liabilities

85,150

83,908

12,358

Deferred income

6,106

5,509

812

Total non-current liabilities

91,256

89,417

13,170

Total liabilities

1,071,559

1,115,596

164,310

EQUITY

Share capital

136

136

20

Paid in capital

392,076

392,076

57,747

Reserves

2,041,558

1,800,776

265,225

Total equity attributable to owners
of the company

2,433,770

2,192,988

322,992

Total equity and liabilities

3,505,329

3,308,584

487,302

 

 

 

China Zenix Auto International Limited

Unaudited Condensed Consolidated Statement of Cash Flows

For the three months ended September 30, 2020

(RMB and US$ amounts expressed in thousands)

Three Months Ended

September 30, 2020

OPERATING ACTIVITIES

RMB' 000

US$' 000

Loss before taxation

(122,387)

(18,026)

Adjustments for:

          Depreciation of right-of-use assets

2,356

347

          Depreciation of property, plant and equipment

31,811

4,685

          Release of deferred income

(199)

(29)

          Finance costs

6,157

907

          Loss on disposal of property, plant and equipment

586

86

          Interest income

(2,449)

(361)

Operating cash flows before movements in working capital

(84,125)

(12,391)

Increase in inventories

(3,286)

(484)

Decrease in trade and other receivables and prepayments

45,929

6,765

Increase in trade and other payables and accruals

86,126

12,685

Cash generated from operations

44,644

6,575

Interest received

2,574

380

NET CASH FROM OPERATING ACTIVITIES

47,218

6,955

INVESTING ACTIVITIES

Purchase of property, plant and equipment

(28,848)

(4,249)

Withdrawal of pledged bank deposits

95,000

13,992

Placement of pledged bank deposits

(100,500)

(14,802)

Proceeds on disposal of property, plant and equipment

503

74

Deposits paid for acquisition of property, plant and equipment

(980)

(144)

Placement of fixed bank deposits with maturity periods over three months

(160,000)

(23,565)

Withdrawal of fixed bank deposits with maturity periods over three months

160,000

23,565

NET CASH USED IN INVESTING ACTIVITIES

(34,825)

(5,129)

FINANCING ACTIVITIES

New bank borrowings raised

(80,000)

(11,783)

Repayment of bank borrowings

80,000

11,783

Interest paid

(6,164)

(908)

NET CASH FROM FINANCING ACTIVITIES

(6,164)

(908)

NET INCREASE IN CASH AND CASH EQUIVALENTS

6,229

918

Cash and cash equivalents at beginning of the period

671,304

98,872

Effect of foreign exchange rate changes

475

70

Cash and cash equivalents at end of the period

678,008

99,860

 

 

 

China Zenix Auto International Limited

Unaudited Condensed Consolidated Statement of Cash Flows

For the nine months ended September 30, 2020

(RMB and US$ amounts expressed in thousands)

Nine Months Ended

September 30, 2020

OPERATING ACTIVITIES

RMB' 000

US$' 000

Loss before taxation

(291,718)

(42,966)

Adjustments for:

          Depreciation of right-of-use assets

7,069

1,041

          Depreciation of property, plant and equipment

98,890

14,565

          Release of deferred income

(598)

(88)

          Finance costs

18,278

2,692

          Loss on disposal of property, plant and equipment

1,622

240

          Interest income

(8,015)

(1,180)

Operating cash flows before movements in working capital

(174,472)

(25,696)

Increase in inventories

(38,442)

(5,662)

Decrease in trade and other receivables and prepayments

23,712

3,492

Increase in trade and other payables and accruals

54,554

8,035

Cash used in operations

(134,648)

(19,831)

Interest received

8,209

1,209

PRC income tax paid

(982)

(145)

NET CASH USED IN OPERATING ACTIVITIES

(127,421)

(18,767)

INVESTING ACTIVITIES

Purchase of property, plant and equipment

(56,849)

(8,373)

Withdrawal of pledged bank deposits

244,000

35,937

Placement of pledged bank deposits

(252,100)

(37,130)

Proceeds on disposal of property, plant and equipment

503

74

Deposits paid for acquisition of property, plant and equipment

(8,158)

(1,201)

Placement of fixed bank deposits with maturity periods over three months

(450,000)

(66,278)

Withdrawal of fixed bank deposits with maturity periods over three months

450,000

66,278

NET CASH USED IN INVESTING ACTIVITIES

(72,604)

(10,693)

FINANCING ACTIVITIES

New bank borrowings raised

420,000

61,859

Repayment of bank borrowings

(420,000)

(61,859)

Interest paid

(18,352)

(2,703)

Repayment to a shareholder

(10,557)

(1,555)

NET CASH USED IN FINANCING ACTIVITIES

(28,909)

(4,258)

NET DECREASE IN CASH AND CASH EQUIVALENTS

(228,934)

(33,718)

Cash and cash equivalents at beginning of the period

906,840

133,563

Effect of foreign exchange rate changes

102

15

Cash and cash equivalents at end of the period

678,008

99,860

 

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SOURCE China Zenix Auto International Limited

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Gerdau S.A. Announces Results Of Early Tender Period Of The Cash Tender Offer For Certain Of The Outstanding 5.750% Bonds Due 2021, 4.750% Bonds Due 2023, 5.893% Bonds Due 2024 And 4.875% Bonds Due 2027 And Upsizing Of The Cash Tender Offer

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SÃO PAULO, Dec. 1, 2020 /PRNewswire/ — Gerdau S.A. (Bovespa: GGBR, NYSE: GGB, Latibex: XGGB) (“Gerdau” or the “Company”) hereby announces the results of the early tender period under the previously announced offer by the Company to purchase for cash (the “Tender Offer”) up to a maximum tender consideration of U.S. $230,000,000 (including the Early Tender Payment, if applicable) of certain of the outstanding 5.750% Bonds due 2021 (the “2021 Bonds”) issued by Gerdau Trade Inc. (“GTI”), 4.750% Bonds due 2023 (the “2023 Bonds”) issued by  GTI, 5.893% Bonds due 2024 (the “2024 Bonds”) issued jointly by Gerdau Holdings, Inc. (“GHI”) and GTL Trade Finance Inc., (“GTL”) and the 4.875% Bonds due 2027 (the “2027 Bonds”, and together with the 2021 Bonds, the 2023 Bonds and the 2024 Bonds, the “Bonds” and each, a “series” of Bonds) issued by GTI (GTI, GHI and GTL, collectively, the “Offerors”). The Tender Offer is being made pursuant to the offer to purchase dated November 16, 2020 (the “Offer to Purchase”). Capitalized terms used but not defined in this press release shall have the meanings assigned to them in the Offer to Purchase.

The Tender Offer was oversubscribed as of 5:00 P.M., New York City time, on the Early Tender Date.  The Offerors have agreed, however, to increase the tender offer to accept for purchase an aggregate of U.S. $300,007,000 principal amount of the Bonds, so that the “Aggregate Maximum Tender Consideration” (as defined in the Offer to Purchase) has been increased to U.S.$ 335,887,519.22.   Accordingly, the Company will not accept for purchase any additional Bonds tendered after the Early Tender Date.  As the Tender Offer was oversubscribed, Bonds tendered at or prior to the Early Tender Date were accepted in accordance with the Acceptance Priority Level (as defined in the Offer to Purchase) and proration, in the amounts set forth in the table below. No 2023 Bonds or 2027 Bonds were accepted for purchase.

The principal amount of each series of Bonds that were validly tendered and not validly withdrawn in the Tender Offer as of the Early Tender Date and the principal amount of each series of Bonds that have been accepted for purchase by the Company are set forth in the table below.

 

Description of Bonds

CUSIP / ISIN Nos.

Outstanding
Principal
Amount

Acceptance Priority

Level

Principal Amount Tendered

Principal Amount Accepted

5.750% Bonds due 2021

G3925DAA8 / USG3925DAA84
37373WAA8 / US37373WAA80

U.S.$394,643,000

1

U.S. $29,056,000

U.S. $29,056,000

5.893% Bonds due 2024

G24422AA8 / USG24422AA83
36249SAA1 / US36249SAA15

U.S.$626,403,000

2

U.S. $349,433,000

U.S. $270,951,000

4.750% Bonds due 2023

G3925DAB6 / USG3925DAB67

37373WAB6 / US37373WAB63

U.S.$517,968,000

3

U.S. $74,993,000

U.S. $0

4.875% Bonds due 2027

G3925DAD2 / USG3925DAD24

37373WAD2 / US37373WAD20

U.S.$650,000,000

4

U.S. $96,059,000

U.S. $0

The Tender Offer is subject to, and conditioned upon, the satisfaction or waiver of certain conditions as set forth in the Offer to Purchase. 

Gerdau will deliver cash with respect to such validly tendered and accepted Bonds on December 2, 2020.

On the Early Settlement Date, eligible holders of Bonds that were validly tendered prior to the Early Tender Date, and whose Bonds were accepted for purchase, will be entitled to receive total consideration of (i) U.S. $1,008.62 for each U.S. $1,000 principal amount of the 2021 Bonds and (ii) U.S. $1,131.50 for each U.S. $1,000 principal amount of the 2024 Bonds, which includes, in each case, the Early Tender Payment of U.S. $50.00  per U.S. $1,000 principal amount of the Bonds. In addition, such eligible holders will be entitled to receive a cash payment equal to the accrued and unpaid interest on such Bonds up to, but not including, the Early Settlement Date.

The Tender Offer will expire at 11:59 p.m. New York City time, on December 14, 2020, unless extended or earlier terminated. The withdrawal deadline for the Tender Offer was 5:00 p.m., New York City time, on November 30, 2020 and so has passed.  Accordingly, Bonds tendered (in the past or future) in the Tender Offer may no longer be withdrawn, except if required by applicable law.

The Information and Tender Agent for the Tender Offer is D.F. King & Co. To contact the Information and Tender Agent, banks and brokers may call (866) 207-3636 or email [email protected].

The Dealer Managers for the Tender Offer are BofA Securities, Inc. and Goldman Sachs & Co. LLC (the “Dealer Managers”). Any questions or requests for assistance may be directed to BofA Securities, Inc. at Collect: +1 (646) 855-8988 or U.S. Toll-Free: +1 (888) 292-0070, or Goldman Sachs & Co. LLC at U.S.: +1 (212) 357-1452 or by email at [email protected].  In addition, Holders may contact their broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Tender Offer.

Documents in connection with the Tender Offer are available at the offices of the Information Agent, D.F. King & Co., Inc., 48 Wall Street, 22nd Floor, New York, New York 10005, Attn: Andrew Beck.  

This notice does not constitute or form part of any offer or invitation to purchase, or any solicitation of any offer to sell, the Bonds or any other securities in the United States or any other country, nor shall it or any part of it, or the fact of its release, form the basis of, or be relied on or in connection with, any contract therefor. The Tender Offer is made only by and pursuant to the terms of the Offer to Purchase and the information in this notice is qualified by reference to the Offer to Purchase. None of the Dealer Managers or the Information and Tender Agent make any recommendations as to whether Holders should tender their Bonds pursuant to the Tender Offer.

This notice to the market does not represent an offer to sell securities or a solicitation to buy securities in the United States or in any other country.

This notice to the market is released for disclosure purposes only, in accordance with applicable legislation. It does not constitute marketing material and should not be interpreted as advertising an offer to sell or soliciting any offer to buy securities issued by any of the Offerors. This notice to the market is not for distribution in or into or to any person located or resident in the United States, its territories and possessions, any state of the United States or the District of Columbia or in any jurisdiction where it is unlawful to release, publish or distribute this announcement, other than any exemption thereunder.

Forward-Looking Statements

This notice includes and references “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may relate to, among other things, the Offerors' business strategy, goals and expectations concerning its market position, future operations, margins and profitability.

Although the Offerors believe the assumptions upon which these forward-looking statements are based are reasonable, any of these assumptions could prove to be inaccurate and the forward-looking statements based on these assumptions could be incorrect.

The matters discussed in these forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results and trends to differ materially from those made, projected, or implied in or by the forward-looking statements depending on a variety of uncertainties or other factors.

The Offerors undertake no obligation to update any of their forward-looking statements.

 

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SOURCE Gerdau S.A.

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BMO Financial Group Reports Fourth Quarter and Fiscal 2020 Results

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Financial Results Highlights

Fourth Quarter 2020 Compared With Fourth Quarter 2019:

  • Net income4 of $1,584 million, up 33%; adjusted net income1 of $1,610 million, up $3 million from the prior year
  • Reported EPS2 of $2.37, up 33%; adjusted EPS1,2 of $2.41, compared with $2.43 in the prior year
  • Revenue, net of CCPB3, of $5,986 million, up 4%
  • Provision for credit losses (PCL) of $432 million, compared with $253 million; current quarter includes PCL on performing loans of $93 million
  • ROE of 12.4%, up from 9.9%; adjusted ROE1 of 12.6%, compared with 13.5%
  • Common Equity Tier 1 Ratio of 11.9%, up from 11.4% in the prior year
  • Dividend of $1.06, unchanged from the prior quarter and the prior year

Fiscal 2020 Compared With Fiscal 2019:

  • Net income4 of $5,097 million, compared with $5,758 million; adjusted net income1 of $5,201 million, compared with $6,249 million
  • Reported EPS2 of $7.55, compared with $8.66; adjusted EPS1,2 of $7.71, compared with $9.43
  • Revenue, net of CCPB3, of $23,478 million, up 3%
  • Provision for credit losses of $2,953 million, compared with $872 million, including PCL on performing loans of $1,431 million
  • ROE of 10.1%, compared with 12.6%; adjusted ROE1 of 10.3%, compared with 13.7%

TORONTO, Dec. 1, 2020 /PRNewswire/ — For the fourth quarter ended October 31, 2020, BMO Financial Group (TSX: BMO) (NYSE: BMO) recorded net income of $1,584 million or $2.37 per share on a reported basis, and net income of $1,610 million or $2.41 per share on an adjusted basis.

“BMO continued to demonstrate strong operating momentum this quarter, delivering adjusted earnings of $1.6 billion and adjusted earnings per share of $2.41, with pre-provision, pre-tax earnings up 7% from last year, good operating leverage and an efficiency ratio of 58.7%,” said Darryl White, Chief Executive Officer, BMO Financial Group.

“We entered the year in a strong position with good momentum across our businesses. Throughout the challenges brought on by the pandemic we have been on the front line of the economic recovery, supporting our customers, communities and employees through uncertainty and hardship. Our results for the year are a testament to the resilience and diversification of our businesses and our ability to quickly adapt to the evolving environment, while actively delivering against our strategic priorities. 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. We are recognized as a global leader in sustainability, including being the highest rated bank and placing 15th overall among the 5,500 companies reviewed by the Wall Street Journal in its recent ranking of the Most Sustainably Managed Companies in the World, and scoring in the top 10% of banks on the Dow Jones Sustainability Indices. We're positioning our businesses for profitable growth, providing unwavering support for our customers and championing an inclusive recovery for our communities. We are focused on sustaining our momentum and competitive strengths, leveraging strong client loyalty and a winning culture to continue to build a digitally enabled, highly efficient and future ready bank,” concluded Mr. White.

(1)

Results and measures in this document are presented on a GAAP basis. They are also presented on an adjusted basis that excludes the impact of certain items. Adjusted results and measures are non-GAAP and are detailed for all reported periods in the Non-GAAP Measures section, where such non-GAAP measures and their closest GAAP counterparts are disclosed.

(2)

All Earnings per Share (EPS) measures in this document refer to diluted EPS, unless specified otherwise. EPS is calculated using net income after deducting total dividends on preferred shares and distributions payable on other equity instruments.

(3)

On a basis that nets insurance claims, commissions and changes in policy benefit liabilities (CCPB) against insurance revenue.

(4)

Q4-2019 reported net income included a $357 million after-tax ($484 million pre-tax) restructuring charge, related to severance and a small amount of real estate-related costs, to continue to improve efficiency, including accelerating delivery against key bank-wide initiatives focused on digitization, organizational redesign and simplification of the way BMO does business. Q4-2019 reported net income also included a $25 million (pre-tax and after-tax) net impact of major reinsurance claims from Japanese typhoons incurred after the announced wind-down of the reinsurance business. The restructuring charge was included in non-interest expense in Corporate Services and the reinsurance adjustment was included in CCPB in BMO Wealth Management.

Note: All ratios and percentage changes in this document are based on unrounded numbers.

The bank's operational performance remains resilient, despite ongoing impacts from COVID-19. Reported net income of $1,584 million and adjusted net income of $1,610 million were impacted by higher provisions for credit losses, which increased $179 million pre-tax, or $131 million after tax from the prior year. Net revenue increased 4% from last year, with increases in BMO Capital Markets, BMO Wealth Management and Corporate Services, partially offset by decreases in the P&C businesses. The bank maintained a disciplined approach to expense management, with adjusted expenses increasing 1% year-over-year and positive adjusted net operating leverage of 2.1%. Results demonstrated the resiliency of the bank's diversified earnings platform in a challenging environment.

Return on equity (ROE) was 12.4%, up from 9.9% in the prior year, and adjusted ROE was 12.6%, compared with 13.5% in the prior year. Return on tangible common equity (ROTCE) was 14.5%, up from 11.9% in the prior year, and adjusted ROTCE was 14.5%, compared with 15.7% in the prior year.

Concurrent with the release of results, BMO announced a first quarter 2021 dividend of $1.06 per common share, unchanged from the prior quarter and the prior year. The quarterly dividend of $1.06 per common share is equivalent to an annual dividend of $4.24 per common share.

The extent to which the COVID-19 pandemic impacts BMO's business, results of operations, reputation and financial performance and condition, including its regulatory capital and liquidity ratios, and credit ratings, as well as its impact on the bank's customers, competitors and trading exposures, and the potential loss from higher credit, counterparty and mark-to-market losses, will depend on future developments, which are highly uncertain and cannot be predicted, including the scope, severity and duration of the pandemic and actions taken by governments, and governmental and regulatory authorities, which could vary by country and region, and other third parties in response to the pandemic. The COVID-19 pandemic may also impact the bank's ability to achieve, or the timing to achieve, certain previously announced targets, goals and objectives. Please refer to the Impact of COVID-19 section, as well as the Risks That May Affect Future Results section on page 73 of BMO's 2020 Annual Report.

BMO's 2020 audited annual consolidated financial statements and accompanying Management Discussion and Analysis (MD&A) are available online at www.bmo.com/investorrelations and at www.sedar.com.

Fourth Quarter Operating Segment Overview

Canadian P&C
Reported net income was $647 million and adjusted net income was $648 million, or 9% lower than the reported and adjusted net income of $710 million in the prior year. Adjusted net income excludes the amortization of acquisition-related intangible assets. Net income decreased due to lower revenue and higher provisions for credit losses, partially offset by lower expenses.

During the quarter, Canadian P&C launched Family Bundle, the first offering of its kind for Canadian families. The Family Bundle allows family members residing in the same household to bank together under one BMO Performance or Premium plan chequing account, and one monthly fee. The bank also achieved Gold Level standing in the Progressive Aboriginal Relations program, awarded by the Canadian Council for Aboriginal Business, the only bank to have achieved this level for the sixth consecutive year, reflecting the bank's commitment to prosperity within Indigenous communities.

U.S. P&C
Reported net income was $324 million, or 17% lower than $393 million in the prior year, and adjusted net income was $333 million, or 17% lower than $404 million. Adjusted net income excludes the amortization of acquisition-related intangible assets.

Reported net income was US$245 million, or 17% lower than US$297 million in the prior year, and adjusted net income was US$253 million, or 17% lower than US$305 million, due to higher provisions for credit losses on performing loans, with lower revenue more than offset by lower expenses.

During the quarter, the Federal Deposit Insurance Corporation released its annual deposit market share report and the bank improved its market share in Chicago and maintained its ranking of second place in the Chicago and Milwaukee markets, and third place within its core footprint, which includes Illinois, Kansas, Wisconsin, Missouri, Indiana, and Minnesota.

BMO Wealth Management
Reported net income was $320 million, an increase of $54 million or 20% from the prior year, and adjusted net income was $328 million, an increase of $28 million or 9%. Adjusted net income excludes the net impact of major reinsurance claims incurred in the prior year after the announced wind-down of the reinsurance business and the amortization of acquisition-related intangible assets in both years. Traditional Wealth reported net income was $253 million, an increase of $17 million or 7%, and adjusted net income was $261 million, an increase of $16 million or 6%, with higher revenue, partially offset by higher expenses. Insurance net income was $67 million, an increase of $37 million on a reported basis and $12 million on an adjusted basis, primarily reflecting unfavourable market movements in the prior year.

This quarter BMO Harris Financial Advisors announced a partnership with LPL Financial, an industry leading broker-dealer provider, which will enhance its premium brokerage and advisory services and provide clients with a superior digital experience, making it easier for clients while simplifying and streamlining operations.

BMO Capital Markets
Reported net income was $379 million, an increase of $108 million or 40% from the prior year, and adjusted net income was $387 million, an increase of $105 million or 38%. Adjusted net income excludes the amortization of acquisition-related intangible assets and acquisition integration costs. Strong revenue performance was partially offset by higher provisions for credit losses and higher expenses.

In the current quarter, BMO Capital Markets acted as joint active bookrunner on Canada's largest technology IPO for Canadian digital payment processing company Nuvei Corp., raising US$805 million with a listing on the Toronto Stock Exchange. As a lead lender since 2015, BMO Capital Markets has been providing Nuvei Corp. with comprehensive and consistent coverage, leading multiple financing transactions over the years.

Corporate Services
Reported and adjusted net loss for the quarter was $86 million, compared with a reported net loss of $446 million and an adjusted net loss of $89 million in the prior year. Adjusted results in the prior year exclude the restructuring charge. Adjusted results are relatively unchanged, as higher revenue and the impact of a favourable tax rate in the current quarter were offset by higher expenses.

Adjusted results in this Fourth Quarter Operating Segment Overview section are non-GAAP amounts or non-GAAP measures. Please refer to the Non-GAAP Measures section.

Capital
BMO's Common Equity Tier 1 (CET1) Ratio was 11.9% as at October 31, 2020. The CET1 Ratio increased from 11.6% at the end of the third quarter, driven by retained earnings growth and the issuance of common shares through the Shareholder Dividend Reinvestment and Share Purchase Plan.

Risk-weighted assets were largely consistent with the prior quarter.

Provision for Credit Losses
Total provision for credit losses was $432 million, an increase of $179 million from the prior year, primarily due to the impact of COVID-19. The total provision for credit losses ratio was 38 basis points, compared with 23 basis points in the prior year. The provision for credit losses on impaired loans was $339 million, an increase of $108 million from the prior year, primarily due to higher provisions in the Canadian P&C and BMO Capital Markets businesses. The provision for credit losses on impaired loans ratio was 30 basis points, compared with 21 basis points in the prior year. There was a $93 million provision for credit losses on performing loans in the current quarter, compared with $22 million in the prior year. The $93 million provision for credit losses on performing loans in the current quarter, reflects a more severe adverse scenario, partially offset by an improving economic outlook and reduced balances. Refer to the Critical Accounting Estimates and Allowance for Credit Losses sections on pages 114 to 116 in BMO's 2020 Annual Report and Note 4 in its audited annual consolidated financial statements for further information on the allowance for credit losses as at October 31, 2020.

Caution
The foregoing sections contain forward-looking statements. Please refer to the Caution Regarding Forward-Looking Statements.

Regulatory Filings
BMO's continuous disclosure materials, including interim filings, annual Management's Discussion and Analysis and audited annual consolidated financial statements, Annual Information Form and Notice of Annual Meeting of Shareholders and Proxy Circular, are available on the bank's website at www.bmo.com/investorrelations, on the Canadian Securities Administrators' website at www.sedar.com, and on the EDGAR section of the U.S. Securities and Exchange Commission's website at www.sec.gov. Information contained in or otherwise accessible through the bank's website (www.bmo.com), or any third party websites mentioned herein, does not form part of this document.

Bank of Montreal uses a unified branding approach that links all of the organization's member companies. Bank of Montreal, together with its subsidiaries, is known as BMO Financial Group. As such, in this document, the names BMO and BMO Financial Group mean Bank of Montreal, together with its subsidiaries.

Financial Review

Management's Discussion and Analysis (MD&A) commentary is as at December 1, 2020. The material that precedes this section comprises part of this MD&A. The MD&A should be read in conjunction with the unaudited condensed consolidated financial statements for the period ended October 31, 2020, included in this document, as well as the audited consolidated financial statements for the year ended October 31, 2020, and the MD&A for fiscal 2020, contained in BMO's 2020 Annual Report.

BMO's 2020 Annual Report includes a comprehensive discussion of its businesses, strategies and objectives, and can be accessed on the bank's website at www.bmo.com/investorrelations. Readers are also encouraged to visit the site to view other quarterly financial information.

Financial Highlights

(Canadian $ in millions, except as noted)

Q4-2020

Q3-2020

Q4-2019

Fiscal 2020

Fiscal 2019

Summary Income Statement

Net interest income (1)

3,530

3,535

3,364

13,971

12,888

Non-interest revenue

2,456

3,654

2,723

11,215

12,595

Revenue

5,986

7,189

6,087

25,186

25,483

Insurance claims, commissions and changes in policy benefit liabilities (CCPB)

1,189

335

1,708

2,709

Revenue, net of CCPB

5,986

6,000

5,752

23,478

22,774

Provision for credit losses on impaired loans

339

446

231

1,522

751

Provision for credit losses on performing loans

93

608

22

1,431

121

Total provision for credit losses

432

1,054

253

2,953

872

Non-interest expense (1)

3,548

3,444

3,987

14,177

14,630

Provision for income taxes

422

270

318

1,251

1,514

Net income attributable to equity holders of the bank

1,584

1,232

1,194

5,097

5,758

Adjusted net income

1,610

1,259

1,607

5,201

6,249

Common Share Data ($, except as noted)

Earnings per share

2.37

1.81

1.78

7.55

8.66

Adjusted earnings per share

2.41

1.85

2.43

7.71

9.43

Earnings per share growth (%)

32.9

(22.8)

(30.7)

(12.8)

6.0

Adjusted earnings per share growth (%)

(0.7)

(22.3)

4.8

(18.2)

4.9

Dividends declared per share

1.06

1.06

1.03

4.24

4.06

Book value per share

77.40

76.60

71.54

77.40

71.54

Closing share price

79.33

73.28

97.50

79.33

97.50

Number of common shares outstanding (in millions)

End of period

645.9

642.8

639.2

645.9

639.2

Average diluted

645.8

641.7

640.4

642.1

640.4

Total market value of common shares ($ billions)

51.2

47.1

62.3

51.2

62.3

Dividend yield (%)

5.3

5.8

4.2

5.3

4.2

Dividend payout ratio (%)

44.6

58.7

57.6

56.1

46.8

Adjusted dividend payout ratio (%)

43.9

57.3

42.3

54.9

43.0

Financial Measures and Ratios (%)

Return on equity

12.4

9.4

9.9

10.1

12.6

Adjusted return on equity

12.6

9.6

13.5

10.3

13.7

Return on tangible common equity

14.5

11.1

11.9

11.9

15.1

Adjusted return on tangible common equity

14.5

11.1

15.7

11.9

16.1

Net income growth

32.6

(20.9)

(29.6)

(11.5)

5.6

Adjusted net income growth

0.1

(20.4)

5.0

(16.8)

4.5

Revenue growth

(1.7)

7.8

3.3

(1.2)

11.3

Revenue growth, net of CCPB

4.1

3.8

4.5

3.1

5.7

Non-interest expense growth

(11.0)

(1.4)

24.9

(3.1)

8.6

Adjusted non-interest expense growth

1.5

(1.5)

1.2

0.3

5.0

Efficiency ratio, net of CCPB

59.3

57.4

69.3

60.4

64.2

Adjusted efficiency ratio, net of CCPB

58.7

56.8

60.0

59.8

61.4

Operating leverage, net of CCPB

15.1

5.2

(20.4)

6.2

(2.9)

Adjusted operating leverage, net of CCPB

2.1

5.3

3.8

2.7

0.8

Net interest margin on average earning assets

1.61

1.59

1.71

1.64

1.70

Effective tax rate

21.1

18.0

21.0

19.7

20.8

Adjusted effective tax rate

21.1

18.2

22.0

19.8

21.1

Total PCL-to-average net loans and acceptances (annualized)

0.38

0.89

0.23

0.63

0.20

PCL on impaired loans-to-average net loans and acceptances (annualized)

0.30

0.38

0.21

0.33

0.17

Balance Sheet (as at, $ millions, except as noted)

Assets

949,261

973,508

852,195

949,261

852,195

Gross loans and acceptances

461,800

466,611

451,537

461,800

451,537

Net loans and acceptances

458,497

463,360

449,687

458,497

449,687

Deposits

659,034

660,600

568,143

659,034

568,143

Common shareholders' equity

49,995

49,239

45,728

49,995

45,728

Cash and securities-to-total assets ratio (%)

31.7

32.1

28.9

31.7

28.9

Capital ratios (%)

CET1 Ratio

11.9

11.6

11.4

11.9

11.4

Tier 1 Capital Ratio

13.6

13.1

13.0

13.6

13.0

Total Capital Ratio

16.2

15.8

15.2

16.2

15.2

Leverage Ratio

4.8

4.7

4.3

4.8

4.3

Foreign Exchange Rates ($)

As at Canadian/U.S. dollar

1.3319

1.3386

1.3165

1.3319

1.3165

Average Canadian/U.S. dollar

1.3217

1.3584

1.3240

1.3441

1.3290

(1)

Effective the first quarter of 2020, the bank adopted IFRS 16, Leases (IFRS 16), recognizing the cumulative effect of adoption in opening retained earnings with no changes to prior periods. Under IFRS 16, the bank as lessee is required to recognize a right-of-use asset and a corresponding lease liability for most leases. BMO recognized $90 million in Q4-2020 and $91 million in Q3-2020 of depreciation on the right-of-use assets recorded in non-interest expense. BMO recognized $13 million in both Q4-2020 and Q3-2020 of interest on the lease liability recorded in interest expense. For the twelve months ended October 31, 2020, BMO recognized $360 million and $53 million, respectively. Refer to the Changes in Accounting Policies in 2020 section on page 118 of BMO's 2020 Annual Report for further details.

Adjusted results are non-GAAP amounts or non-GAAP measures. Please refer to the Non-GAAP Measures section.

Non-GAAP Measures
Results and measures in this document are presented on a GAAP basis. Unless otherwise indicated, all amounts are in Canadian dollars and have been derived from financial statements prepared in accordance with International Financial Reporting Standards (IFRS). References to GAAP mean IFRS. They are also presented on an adjusted basis that excludes the impact of certain items, as set out in the table below. Results and measures that exclude the impact of Canadian/U.S. dollar exchange rate movements on BMO's U.S. segment are non-GAAP measures. Please refer to the Foreign Exchange section for a discussion of the effects of changes in exchange rates on BMO's results. Pre-provision pre-tax earnings (PPPT) is a non-GAAP measure, and is calculated as the difference between revenue, net of insurance claims, commissions and changes in policy benefit liabilities (CCPB), and non-interest expense. Management assesses performance on a reported basis and on an adjusted basis, and considers both to be useful in assessing underlying ongoing business performance. Presenting results on both bases provides readers with a better understanding of how management assesses results. It also permits readers to assess the impact of certain specified items on results for the periods presented, and to better assess results excluding those items that may not be reflective of ongoing results. As such, the presentation may facilitate readers' analysis of trends. Except as otherwise noted, management's discussion of changes in reported results in this document applies equally to changes in the corresponding adjusted results. Adjusted results and measures are non-GAAP and as such do not have standardized meanings under GAAP. They are unlikely to be comparable to similar measures presented by other companies and should not be viewed in isolation from, or as a substitute for, GAAP results.

Non-GAAP Measures

(Canadian $ in millions, except as noted)

Q4-2020

Q3-2020

Q4-2019

Fiscal 2020

Fiscal 2019

Reported Results

Revenue

5,986

7,189

6,087

25,186

25,483

Insurance claims, commissions and changes in policy benefit liabilities (CCPB)

(1,189)

(335)

(1,708)

(2,709)

Revenue, net of CCPB

5,986

6,000

5,752

23,478

22,774

Total provision for credit losses

(432)

(1,054)

(253)

(2,953)

(872)

Non-interest expense

(3,548)

(3,444)

(3,987)

(14,177)

(14,630)

Income before income taxes

2,006

1,502

1,512

6,348

7,272

Provision for income taxes

(422)

(270)

(318)

(1,251)

(1,514)

Net income

1,584

1,232

1,194

5,097

5,758

EPS ($)

2.37

1.81

1.78

7.55

8.66

Adjusting Items (Pre-tax) (1)

Acquisition integration costs (2)

(3)

(5)

(2)

(14)

(13)

Amortization of acquisition-related intangible assets (3)

(30)

(32)

(38)

(121)

(128)

Restructuring costs (4)

(484)

(484)

Reinsurance adjustment (5)

(25)

(25)

Adjusting items included in reported pre-tax income

(33)

(37)

(549)

(135)

(650)

Adjusting Items (After tax) (1)

Acquisition integration costs (2)

(3)

(4)

(2)

(11)

(10)

Amortization of acquisition-related intangible assets (3)

(23)

(23)

(29)

(93)

(99)

Restructuring costs (4)

(357)

(357)

Reinsurance adjustment (5)

(25)

(25)

Adjusting items included in reported net income after tax

(26)

(27)

(413)

(104)

(491)

Impact on EPS ($)

(0.04)

(0.04)

(0.65)

(0.16)

(0.77)

Adjusted Results

Revenue

5,986

7,189

6,087

25,186

25,483

Insurance claims, commissions and changes in policy benefit liabilities (CCPB)

(1,189)

(310)

(1,708)

(2,684)

Revenue, net of CCPB

5,986

6,000

5,777

23,478

22,799

Total provision for credit losses

(432)

(1,054)

(253)

(2,953)

(872)

Non-interest expense

(3,515)

(3,407)

(3,463)

(14,042)

(14,005)

Income before income taxes

2,039

1,539

2,061

6,483

7,922

Provision for income taxes

(429)

(280)

(454)

(1,282)

(1,673)

Net income

1,610

1,259

1,607

5,201

6,249

EPS ($)

2.41

1.85

2.43

7.71

9.43

(1)

Adjusting items are generally included in Corporate Services, with the exception of the amortization of acquisition-related intangible assets and certain acquisition integration costs, which are charged to the operating groups.

(2)

KGS–Alpha and Clearpool acquisition integration costs are reported in BMO Capital Markets. Acquisition integration costs are recorded in non-interest expense.

(3)

These amounts were charged to the non-interest expense of the operating groups. Before-tax and after-tax amounts for each operating group are provided on pages 15, 16, 18, 20 and 22.

(4)

Q4-2019 reported net income included a restructuring charge of $357 million after-tax ($484 million pre-tax), related to severance and a small amount of real estate-related costs, to continue to improve efficiency, including accelerating delivery against key bank-wide initiatives focused on digitization, organizational redesign and simplification of the way BMO does business. Restructuring costs are included in non-interest expense in Corporate Services.

(5)

Q4-2019 reported net income included a reinsurance adjustment of $25 million (pre-tax and after-tax) in CCPB for the net impact of major reinsurance claims from Japanese typhoons incurred after the announced wind-down of the reinsurance business. This reinsurance adjustment is included in BMO Wealth Management.

Adjusted results and measures in this table are non-GAAP amounts or non-GAAP measures.

Caution Regarding Forward-Looking Statements
As noted in the following Caution Regarding Forward-Looking Statements, all forward-looking statements and information, by their nature, are subject to inherent risks and uncertainties, both general and specific, which may cause actual results to differ materially from the expectations expressed in any forward-looking statement. The Enterprise-Wide Risk Management section starting on page 73 of BMO's 2020 Annual Report describes a number of risks, including credit and counterparty, market, insurance, liquidity and funding, operational, legal and regulatory, strategic, environmental and social, and reputation risk. Should the bank's risk management framework prove ineffective, there could be a material adverse impact on its financial position and results.

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 in this document may include, but are not limited to, statements with respect to the bank's objectives and priorities for fiscal 2021 and beyond, its strategies or future actions, its targets, expectations for its financial condition or share price, the regulatory environment in which it operates and the results of or outlook for its operations or for the Canadian, U.S. and international economies, its response to the COVID-19 pandemic and its expected impact on the bank's business, operations, earnings, results, and financial performance and condition, as well as its impact on the bank's customers, competitors, reputation and trading exposures, and include statements of the bank's management. Forward-looking statements are typically identified by words such as “will”, “would”, “should”, “believe”, “expect”, “anticipate”, “project”, “intend”, “estimate”, “plan”, “goal”, “target”, “may” and “could.”

By their nature, forward-looking statements require the bank to make assumptions and are subject to inherent risks and uncertainties, both general and specific in nature. There is significant risk that predictions, forecasts, conclusions or projections will not prove to be accurate, that assumptions may not be correct, and that actual results may differ materially from such predictions, forecasts, conclusions or projections. The uncertainty created by the COVID-19 pandemic has heightened this risk given the increased challenge in making assumptions, predictions, forecasts, conclusions or projections. The bank cautions readers of this document not to place undue reliance on forward-looking statements, as a number of factors – many of which are beyond its control and the effects of which can be difficult to predict – 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.

Future outcomes that relate to forward-looking statements may be influenced by many factors, including but not limited to: the severity, duration and spread of the COVID-19 pandemic, its impact on local, national or international economies, and its heightening of certain risks that may affect the bank's future results; the possible impact on the bank's business and operations of outbreaks of disease or illness that affect local, national or international economies; general economic and market conditions in the countries in which the bank operates; information, privacy and cyber security, including the threat of data breaches, hacking, identity theft and corporate espionage, as well as the possibility of denial of service resulting from efforts targeted at causing system failure and service disruption; changes in monetary, fiscal, or economic policy, and tax legislation and interpretation; interest rate and currency value fluctuations, as well as benchmark interest rate reforms; technological changes and technology resiliency; political conditions, including changes relating to or affecting economic or trade matters; the Canadian housing market and consumer leverage; climate change and other environmental and social risks; weak, volatile or illiquid capital or credit markets; the level of competition in the geographic and business areas in which the bank operates; changes in laws or in supervisory expectations or requirements, including capital, interest rate and liquidity requirements and guidance, and the effect of such changes on funding costs; judicial or regulatory proceedings; the accuracy and completeness of the information the bank obtains with respect to its customers and counterparties; failure of third parties to comply with their obligations to the bank; the bank's ability to execute its strategic plans and to complete proposed acquisitions or dispositions, 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, including with respect to reliance on third parties; changes to the bank's credit ratings; global capital markets activities; the possible effects on the bank's business of war or terrorist activities; natural disasters and disruptions to public infrastructure, such as transportation, communications, power or water supply; and the bank's ability to anticipate and effectively manage risks arising from all of the foregoing factors.

The bank cautions that the foregoing list is not exhaustive of all possible factors. Other factors and risks could adversely affect the bank's results. For more information, please refer to the discussion in the Risks That May Affect Future Results section, and the sections related to credit and counterparty, market, insurance, liquidity and funding, operational, legal and regulatory, strategic, environmental and social, and reputation risk, in the Enterprise-Wide Risk Management section that starts on page 73 of BMO's 2020 Annual Report, all of which outline certain key factors and risks that may affect the bank's future results. 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. The bank 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 shareholders in understanding the bank's financial position as at and for the periods ended on the dates presented, as well as its strategic priorities and objectives, and may not be appropriate for other purposes.

Material economic assumptions underlying the forward-looking statements contained in this document are set out in the Economic Developments and Outlook section on page 18 of BMO's 2020 Annual Report as well as in the Allowance for Credit Losses section on page 114 of BMO's 2020 Annual Report. Assumptions about the performance of the Canadian and U.S. economies, as well as overall market conditions and their combined effect on the bank's business, are material factors the bank considers when determining its strategic priorities, objectives and expectations for its business. In determining expectations for economic growth, the bank primarily considers historical economic data, past relationships between economic and financial variables, changes in government policies, and the risks to the domestic and global economy.

Foreign Exchange
The Canadian dollar equivalents of BMO's U.S. results that are denominated in U.S. dollars decreased relative to the fourth quarter of 2019 and the third quarter of 2020, due to changes in the U.S. dollar exchange rate. The table below indicates the relevant average Canadian/U.S. dollar exchange rates and the impact of changes in those rates on BMO's U.S. segment results. References in this document to the impact of the U.S. dollar do not include U.S. dollar-denominated amounts recorded outside of BMO's U.S. segment.

Changes in exchange rates will affect future results measured in Canadian dollars, and the impact on those results is a function of the periods in which revenue, expenses, provisions for (recoveries of) credit losses and income taxes arise.

Economically, BMO's U.S. dollar income stream was unhedged to changes in foreign exchange rates during the current and prior year. The bank regularly determines whether to enter into hedging transactions in order to mitigate the impact of foreign exchange rate movements on net income.

Refer to the Enterprise-Wide Capital Management section on page 63 of BMO's 2020 Annual Report for a discussion of the impact that changes in foreign exchange rates can have on the bank's capital position. Changes in foreign exchange rates will also affect accumulated other comprehensive income, primarily as a result of the translation of the bank's investment in foreign operations, and the carrying value of assets and liabilities on the balance sheet.

This Foreign Exchange section contains forward-looking statements. Please refer to the Caution Regarding Forward-Looking Statements.

Effects of Changes in Exchange Rates on BMO's U.S. Segment Reported and Adjusted Results

Q4-2020

(Canadian $ in millions, except as noted)

vs. Q4-2019

vs. Q3-2020

Canadian/U.S. dollar exchange rate (average)

Current period

1.3217

1.3217

Prior period

1.3240

1.3584

Effects on U.S. segment reported results

Increased (Decreased) net interest income

(2)

(38)

Increased (Decreased) non-interest revenue

(2)

(24)

Increased (Decreased) revenues

(4)

(62)

Decreased (Increased) provision for credit losses

12

Decreased (Increased) expenses

3

37

Decreased (Increased) income taxes

2

Increased (Decreased) reported net income

(1)

(11)

Impact on earnings per share ($)

(0.02)

Effects on U.S. segment adjusted results

Increased (Decreased) net interest income

(2)

(38)

Increased (Decreased) non-interest revenue

(2)

(24)

Increased (Decreased) revenues

(4)

(62)

Decreased (Increased) provision for credit losses

12

Decreased (Increased) expenses

2

36

Decreased (Increased) income taxes

1

2

Increased (Decreased) adjusted net income

(1)

(12)

Impact on adjusted earnings per share ($)

(0.02)

Adjusted results in this table are non-GAAP amounts or non-GAAP measures. Please refer to the Non-GAAP Measures section.

Impact of COVID-19
The COVID-19 pandemic continues to have a major impact on society and the economy. Although economic activity in Canada and the United States is recovering following the steepest recession in modern history, both economies continue to run well below capacity and are not expected to regain full employment until at least 2022. A rising number of new virus cases has also yielded renewed restrictions on economic activity in some jurisdictions, which could further constrain the recovery in the months ahead. For additional information, refer to the Economic Developments and Outlook section and the Impact of COVID-19 section on pages 18 and 24, respectively, of BMO's 2020 Annual Report.

BMO is closely monitoring developments around the spread of the virus and the safety of the bank's employees and clients remains a top priority. The bank continues to work closely with relevant public health authorities to monitor the situation and will continue to follow their guidance to make informed decisions. BMO branches and offices have incorporated precautionary measures, including enhanced cleaning protocols. BMO maintained strong operational resilience throughout the COVID-19 pandemic, including access to call centers, ATMs and retail branches and enabled remote working capabilities for its non-branch workforce. The bank launched additional innovative technology and tools across the enterprise to foster effective virtual collaboration for employees and customers. All BMO branches in Canada and the United States are open, and customers continue to have full access to call centres and ATMs. Over 90% of the bank's non-branch workforce continues to work remotely. The bank continues to take steps to assess and mitigate internal control risks created by the shift in the work environment.

The pandemic continues to have an impact on the global economy, and it continues to have an impact on the bank's financial results. Impacts on the bank's financial results include higher provisions for credit losses, lower loan growth, strong deposit growth, a negative impact on revenue from lower interest rates, a positive impact on trading revenue due to client activity and low expense growth. In the current quarter, adjusted net income was relatively unchanged from the prior year. Revenue, net of adjusted CCPB, increased 4% and adjusted expenses increased 1%. The provision for credit losses was $432 million in the fourth quarter, an increase of $179 million from the prior year and a decrease of $622 million from the third quarter. For further information, refer to the Allowance for Credit Losses section on page 114 of BMO's 2020 Annual Report.

Central banks around the world continue to provide accommodative policies and make available financing programs to support the smooth functioning of the financial markets. BMO maintained a strong liquidity position in the fourth quarter of 2020. For additional information, refer to the Liquidity and Funding Risk section on page 97 of BMO's 2020 Annual Report.

On August 31, 2020, the Office of the Superintendent of Financial Institutions (OSFI) announced it is gradually phasing out the special capital treatment for loan payment deferrals. Loans granted payment deferrals before August 31, 2020, will continue to be treated as performing loans under the Capital Adequacy Requirements Guideline for the duration of the deferral, up to a maximum of six calendar months from the effective date of the deferral. Loans granted payment deferrals after August 31, 2020, but on or before September 30, 2020, will be treated as performing loans under the CAR Guideline for the duration of the deferral, up to a maximum of three calendar months from the approval date of the deferral. Loans granted payment deferrals after September 30, 2020, are not eligible for the special capital treatment. Other modifications to capital requirements that OSFI announced in the second quarter of 2020 remained in effect in the fourth quarter, key elements of which include the 1% Domestic Stability Buffer, reduction in the stressed value-at-risk multipliers under market risk, and transitional arrangements for credit loss provisioning that are available under the Basel Framework. On November 5, 2020, OSFI announced an extension, from April 30, 2021 to December 31, 2021, of the temporary exclusion from the leverage ratio of exposures related to central bank reserves and sovereign-issued securities that qualify as High Quality Liquid Assets under the Liquidity Adequacy Requirements Guideline. BMO's capital position remained strong in the fourth quarter. For additional information, refer to the Enterprise-Wide Capital Management section on page 63 of BMO's 2020 Annual Report.

BMO continues to support its customers in this challenging environment, working closely with governments and agencies on programs to reduce the financial hardship caused by COVID-19, including payment deferrals and lending facilities designed to help individuals and businesses to withstand stress and recover financially.

The following table shows the uptake of payment deferral programs by geography and product type. Numbers represent active deferrals outstanding at the end of the period. Since March 2020, the bank granted payment deferrals to over 256,000 retail accounts in Canada and the United States. Requests for payment deferrals have declined significantly since peaking in the second quarter. Deferrals continued to decline in the fourth quarter, with the large majority of clients resuming payments after exiting the deferral program. The maturities are being closely monitored and actively managed. As of October 31, 2020, the bank had approximately $3.8 billion of balances under payment deferral programs in Canada, and US$0.69 billion in the United States.

Payment Deferrals

As at October 31, 2020

As at July 31, 2020

Canada (1)

Number of accounts
(in thousands) (3)

Outstanding balances*
(Canadian $ in billions)

% of portfolio

Number of accounts
(in thousands) (3)

Outstanding balances*
(Canadian $ in billions)

% of portfolio

Mortgages (including amortizing HELOC)

7.7

2.66

2%

52.3

17.25

14%

Credit Cards

4.0

0.04

1%

38.5

0.34

5%

All other personal lending

7.3

0.26

1%

84.8

2.37

7%

Total Retail – Canada

19.0

2.96

2%

175.6

19.96

12%

Commercial Banking

0.4

0.85

1%

7.2

9.40

11%

United States (2) 

(US$ in billions)

(US$ in billions)

Mortgages

0.4

0.11

1%

1.5

0.45

8%

Indirect Auto

3.5

0.08

2%

8.0

0.21

4%

All other personal lending

1.7

0.05

1%

4.0

0.14

3%

Total Retail – United States

5.6

0.24

1%

13.5

0.80

5%

Commercial Banking

0.7

0.45

1%

1.4

0.90

1%

 

* Outstanding balances for accounts/clients with payments deferred. Numbers are approximate.

(1)

In Canada mortgage deferrals were available for one to six months. Canadian personal mortgages exclude balances related to non-proprietary mortgages, consistent with an industry reporting definition established by the Canadian Bankers Association; there were approximately $56 million in balances outstanding related to non-proprietary mortgages in deferral as at October 31, 2020, and approximately $2 billion as at July 31, 2020. For other retail loans and cards, the deferral offer was one to six months. Commercial deferrals were granted for three to six months.

(2)

In the United States deferrals on consumer products were available for up to six months. Commercial deferrals were granted for three months.

(3)

Represents number of clients for Commercial Banking.

BMO is participating in government-offered programs in both Canada and the United States, supporting individuals and businesses facing economic hardship due to the pandemic. In Canada, the bank facilitated $2.9 billion in funding for over 72,000 business banking accounts under the Canada Emergency Business Account (CEBA) program during the year. Under the program, the bank issues loans that are funded by the government. The bank assessed whether substantially all the risks and rewards of the loans under this program were transferred to the government and determined they qualify for derecognition; therefore, the bank does not record these loans on the Consolidated Balance Sheet. As part of the Government of Canada's Business Credit Availability Program (BCAP), BMO is also participating in the Business Development Bank of Canada (BDC), and Export Development Canada (EDC) relief programs to help Canadian businesses of all sizes impacted by COVID-19 obtain needed financing. In the United States, BMO had US$4.7 billion in total loans outstanding to approximately 22,000 businesses under the Small Business Administration's Paycheck Protection Program. BMO has taken a personal and relationship-based approach that considers the unique needs of each customer and leverages its long history and experience through many economic cycles. For additional information, refer to the Impact of COVID-19 section and the Risks That May Affect Future Results section on pages 24 and 73, respectively, of BMO's 2020 Annual Report.

Caution
The extent to which the COVID-19 pandemic impacts BMO's business, results of operations, reputation and financial performance and condition, including its regulatory capital and liquidity ratios, and credit ratings, as well as its impact on the bank's customers, competitors and trading exposures, and the potential for loss from higher credit, counterparty and mark-to-market losses will depend on future developments, which are highly uncertain and cannot be predicted, including the scope, severity and duration of the pandemic and actions taken by governments, and governmental and regulatory authorities, which could vary by country and region, and other third parties in response to the pandemic. The COVID-19 pandemic may also impact the bank's ability to achieve, or the timing to achieve, certain previously announced targets, goals and objectives. For additional information, refer to the Enterprise-Wide Risk Management section on page 73 of BMO's 2020 Annual Report.

This Impact of COVID-19 section contains forward-looking statements. Please see the Caution Regarding Forward-Looking Statements.

Adjusted results in this Impact of COVID-19 section are non-GAAP amounts or non-GAAP measures. Please refer to the Non-GAAP Measures section.

Net Income

Q4 2020 vs. Q4 2019
Reported net income was $1,584 million, an increase of $390 million or 33% from the prior year, and adjusted net income was $1,610 million, an increase of $3 million. Adjusted net income excludes the amortization of acquisition-related intangible assets and acquisition integration costs in both periods. The prior year adjusted net income also excludes a $357 million restructuring charge, primarily related to severance, as well as a $25 million reinsurance adjustment for the net impact of major reinsurance claims incurred after the announced wind-down of the reinsurance business. Reported EPS was $2.37, an increase of $0.59 or 33% from the prior year, and adjusted EPS was $2.41, a decrease of $0.02 or 1%.

Adjusted results primarily reflect the impact of higher provisions for credit losses, which increased $179 million pre-tax or $131 million after tax, which largely offset the benefit from higher revenue, net of modestly higher expenses. Adjusted net income increased in BMO Capital Markets and BMO Wealth Management, partially offset by a decrease in the P&C businesses. Corporate Services adjusted net loss was relatively unchanged from the prior year.

Q4 2020 vs. Q3 2020
Reported net income was $1,584 million, an increase of $352 million or 28% from the prior quarter, and adjusted net income was $1,610 million, an increase of $351 million or 28%. Reported and adjusted EPS both increased $0.56 from the prior quarter.

Adjusted results were primarily driven by lower provisions for credit losses, partially offset by higher expenses and lower revenue. Net income increased in the P&C businesses, partially offset by a decrease in BMO Capital Markets and BMO Wealth Management. Corporate Services recorded a lower adjusted net loss than in the prior quarter.

Adjusted results in this Net Income section are non-GAAP amounts or non-GAAP measures. Please refer to the Non-GAAP Measures section.

Revenue (1)

Q4 2020 vs. Q4 2019
Revenue was $5,986 million, a decrease of $101 million or 2% from the prior year. On a basis that nets insurance claims, commissions and changes in policy benefit liabilities (CCPB) against insurance revenue (net revenue), revenue increased $234 million, or 4% from $5,752 million in the prior year. Revenue net of adjusted CCBP, which excludes the reinsurance adjustment in the prior year, increased $209 million or 4%.

Revenue increased in BMO Capital Markets, due to higher trading revenue from strong client activity and higher investment and corporate banking revenue, in BMO Wealth Management, primarily due to higher online brokerage revenue, the benefit from higher global markets and higher insurance revenue, and in Corporate Services. Revenue in the P&C businesses decreased due to lower non-interest revenue, with net interest income relatively unchanged, as higher balances were offset by lower margins.

Net interest income was $3,530 million, an increase of $166 million or 5%. On an excluding trading basis, net interest income was $3,018 million, an increase of $39 million or 1% from the prior year, largely due to higher net interest income in Corporate Services with net interest income in the businesses relatively unchanged.

Average earning assets were $873.9 billion, an increase of $95.5 billion or 12%, due to higher securities, higher cash resources, and loan growth, as well as higher securities borrowed or purchased under resale agreements. BMO's overall net interest margin decreased 10 basis points from the prior year, primarily driven by a higher volume of assets in Corporate Services as a result of high liquidity levels, which have a lower spread than the bank, and lower margins in Canadian P&C and BMO Wealth Management due to lower interest rates, partially offset by higher trading net interest income. On an excluding trading basis, net interest margin decreased 18 basis points, due to the drivers noted above.

Non-interest revenue, net of CCPB, was $2,456 million, an increase of $68 million or 3%. Non-interest revenue, net of adjusted CCBP, increased $43 million or 2%. The increase was primarily driven by higher trading, underwriting and advisory, and lending revenue and higher insurance revenue, net of adjusted CCPB, partially offset by lower other non-interest revenue, lower securities gains other than trading and lower securities commissions and fees. On an excluding trading basis, net of adjusted CCPB, non-interest revenue was $2,433 million, relatively unchanged from the prior year.

Gross insurance revenue decreased $292 million from the prior year, primarily due to a decrease in the fair value of investments in the current quarter from increases in interest rates, compared with relatively unchanged interest rates in the prior year, partially offset by higher annuity sales in the current quarter. These changes related to the fair value of investments were largely offset by changes in policy benefit liabilities, the impact of which is reflected in CCPB, as discussed on page 12. The bank generally focuses on analyzing revenue, net of CCPB, given the extent to which insurance revenue can vary and that this variability is largely offset in CCPB.

(1)

Effective the first quarter of 2020, the bank adopted IFRS 16, Leases (IFRS 16), recognizing the cumulative effect of adoption in opening retained earnings with no changes to prior periods. Under IFRS 16, the bank as lessee is required to recognize a right-of-use asset and a corresponding lease liability for most leases. For the three months ended October 31, 2020, the bank recognized $90 million of depreciation on the right-of-use assets recorded in non-interest expense and $13 million of interest on the lease liability recorded in interest expense. For the twelve months ended October 31, 2020, the bank recognized $360 million and $53 million, respectively. Refer to the Changes in Accounting Policies in 2020 section on page 118 of BMO's 2020 Annual Report for further details.

Q4 2020 vs. Q3 2020
Revenue was $5,986 million, a decrease of $1,203 million or 17% from the prior quarter. Revenue, net of CCPB, decreased $14 million from the prior quarter, and increased $48 million or 1% excluding the impact of the weaker U.S. dollar.

Revenue increased in Corporate Services, due to higher treasury-related revenue, as well as in Canadian P&C and BMO Wealth Management. Revenue decreased in BMO Capital Markets, primarily due to lower interest rate trading revenue, and in U.S. P&C.

Net interest income decreased $5 million from the prior quarter, or increased $33 million or 1% excluding the impact of the weaker U.S. dollar. On an excluding trading basis, net interest income increased $78 million or 3%, or 4% excluding the impact of the weaker U.S. dollar, largely due to higher net interest income in Corporate Services and in Canadian P&C, partially offset by lower net interest income in U.S. P&C and BMO Capital Markets.

Average earning assets decreased $10.6 billion or 1%, and were relatively unchanged excluding the impact of the weaker U.S. dollar, primarily due to lower loan balances and lower cash resources, partially offset by higher securities. BMO's overall net interest margin increased 2 basis points from the prior quarter, primarily due to higher margins in Corporate Services and Canadian P&C, partially offset by lower trading net interest income. On an excluding trading basis, net interest margin increased 7 basis points from the prior quarter, due to the drivers noted above.

Non-interest revenue, net of CCPB, was $2,456 million, decreased $9 million from the prior quarter, primarily driven by lower trading and underwriting and advisory fee revenue, partially offset by increased lending and foreign exchange revenue. On an excluding trading basis, net of CCPB, non-interest revenue increased $36 million or 2%.

Gross insurance revenue decreased $1,178 million from the prior quarter, primarily due to a decrease in the fair value of investments in the current quarter from increases in interest rates, compared with an increase in the fair value of investments in the prior quarter from decreases in interest rates. The decrease in insurance revenue was largely offset by changes in CCPB, as discussed on page 12.

Net interest income and non-interest revenue are detailed in the unaudited condensed consolidated financial statements.

Adjusted results in this Revenue section are non-GAAP amounts or non-GAAP measures. Please refer to the Non-GAAP Measures section.

Provision for Credit Losses

Q4 2020 vs. Q4 2019
Total provision for credit losses was $432 million, an increase of $179 million from the prior year, primarily due to the impact of COVID-19. The total provision for credit losses ratio was 38 basis points, compared with 23 basis points in the prior year. The provision for credit losses on impaired loans was $339 million, an increase of $108 million from $231 million in the prior year, primarily due to higher provisions in the Canadian P&C and BMO Capital Markets businesses. The provision for credit losses on impaired loans ratio was 30 basis points, compared with 21 basis points in the prior year. There was a $93 million provision for credit losses on performing loans in the current quarter, compared with $22 million in the prior year. The $22 million provision for credit losses on performing loans in the prior year was largely due to portfolio growth, negative migration and scenario weight change, partially offset by changes in economic outlook, while the $93 million provision for credit losses on performing loans in the current quarter reflects a more severe adverse scenario, partially offset by an improving economic outlook and reduced balances.

Q4 2020 vs. Q3 2020
Total provision for credit losses was $432 million, a decrease of $622 million from the prior quarter. The total provision for credit losses ratio was 38 basis points, compared with 89 basis points in the prior quarter. The provision for credit losses on impaired loans decreased $107 million, primarily due to lower provisions in the P&C businesses, partially offset by higher provisions in BMO Capital Markets. The provision for credit losses on impaired loans ratio was 30 basis points, compared with 38 basis points in the prior quarter. There was a $93 million provision for credit losses on performing loans in the current quarter, compared with $608 million in the prior quarter. The prior quarter provision for credit losses was largely due to the impact of the extraordinary and highly uncertain environment on credit conditions, the economy and scenario weights, while the current quarter provision for credit losses was primarily due to a more severe adverse scenario, partially offset by an improving economic outlook and reduced balances.

Provision for Credit Losses by Operating Group

BMO Wealth

BMO Capital

Corporate

(Canadian $ in millions)

Canadian P&C

U.S. P&C

Total P&C

Management

Markets

Services

Total Bank

Q4-2020

Provision for (recovery of) credit losses on impaired loans

180

53

233

105

1

339

Provision for (recovery of) credit losses on performing loans

11

126

137

5

(41)

(8)

93

Total provision for (recovery of) credit losses

191

179

370

5

64

(7)

432

Q3-2020

Provision for (recovery of) credit losses on impaired loans

257

109

366

1

79

446

Provision for (recovery of) credit losses on performing loans

313

223

536

7

58

7

608

Total provision for (recovery of) credit losses

570

332

902

8

137

7

1,054

Q4-2019

Provision for (recovery of) credit losses on impaired loans

134

66

200

1

32

(2)

231

Provision for (recovery of) credit losses on performing loans

11

4

15

(1)

8

22

Total provision for (recovery of) credit losses

145

70

215

40

(2)

253

Fiscal 2020

Provision for (recovery of) credit losses on impaired loans

787

418

1,205

4

310

3

1,522

Provision for (recovery of) credit losses on performing loans

623

441

1,064

18

349

1,431

Total provision for (recovery of) credit losses

1,410

859

2,269

22

659

3

2,953

Fiscal 2019

Provision for (recovery of) credit losses on impaired loans

544

160

704

2

52

(7)

751

Provision for (recovery of) credit losses on performing loans

63

37

100

(2)

28

(5)

121

Total provision for (recovery of) credit losses

607

197

804

80

(12)

872

Provision for Credit Losses Performance Ratios

Q4-2020

Q3-2020

Q4-2019

Fiscal 2020

Fiscal 2019

Total PCL-to-average net loans and acceptances (annualized) (%)

0.38

0.89

0.23

0.63

0.20

PCL on impaired loans-to-average net loans and acceptances (annualized) (%)

0.30

0.38

0.21

0.33

0.17

Impaired Loans

Total gross impaired loans (GIL) were $3,638 million at the end of the current quarter, compared with $2,629 million in the prior year, with the majority of the increase in impaired loans attributed to retail trade and service industries. GIL decreased $775 million from $4,413 million in the prior quarter.

Factors contributing to the change in GIL are outlined in the table below. Loans classified as impaired during the quarter totalled $662 million, compared with $799 million in the prior year, and $1,760 million in the prior quarter.

Changes in Gross Impaired Loans (GIL) (1) and Acceptances

(Canadian $ in millions, except as noted)

Q4-2020

Q3-2020

Q4-2019

Fiscal 2020

Fiscal 2019

GIL, beginning of period

4,413

3,645

2,432

2,629

1,936

Classified as impaired during the period

662

1,760

799

4,649

2,686

Transferred to not impaired during the period

(295)

(113)

(220)

(719)

(604)

Net repayments

(723)

(409)

(219)

(1,728)

(800)

Amounts written-off

(274)

(384)

(159)

(1,047)

(528)

Recoveries of loans and advances previously written-off

Disposals of loans

(130)

(147)

(57)

Foreign exchange and other movements

(15)

(86)

(4)

1

(4)

GIL, end of period

3,638

4,413

2,629

3,638

2,629

GIL to gross loans and acceptances (%)

0.79

0.95

0.58

0.79

0.58

(1)

GIL excludes purchased credit impaired loans.

Insurance Claims, Commissions and Changes in Policy Benefit Liabilities
Reported and adjusted insurance claims, commissions and changes in policy benefit liabilities (CCPB) were $nil in the current quarter, a decrease of $335 million on a reported basis and $310 million on an adjusted basis from the prior year. Adjusted CCPB in the prior year excludes the $25 million reinsurance adjustment. In the current quarter, the $nil CCPB reflects payments related to claims and policy benefits that fully offset changes in policyholder liabilities. Results decreased, primarily due to a decrease in the fair value of policy benefit liabilities in the current year resulting from increases in interest rates, compared with relatively unchanged interest rates in the prior year, partially offset by higher annuity sales.

CCPB decreased $1,189 million from the prior quarter, primarily due to a decrease in the fair value of policy benefit liabilities in the current quarter from an increase in interest rates, compared with an increase in the fair value of policy benefit liabilities resulting from decreases in interest rates in the prior quarter. The changes related to the fair value of policy benefit liabilities were largely offset in revenue.

Adjusted results in this Insurance Claims, Commissions and Changes in Policy Benefit Liabilities section are non-GAAP amounts or non-GAAP measures. Please refer to the Non-GAAP Measures section.

Non-Interest Expense (1)
Reported non-interest expense was $3,548 million, a decrease of $439 million or 11% from the prior year, and adjusted non-interest expense was $3,515 million, an increase of $52 million or 1%, or 2% excluding the impact of the weaker U.S. dollar. Adjusted non-interest expense excludes the amortization of acquisition-related intangible assets and acquisition integration costs in both periods and the restructuring charge in the prior year. The increase was largely due to higher premises and equipment costs and amortization of intangibles, partially offset by a continued focus on expense management, with lower expense across a number of categories, including lower travel and business development costs.

Reported non-interest expense was $3,548 million, an increase of $104 million or 3% from the prior quarter, and adjusted non-interest expense was $3,515 million, an increase of $108 million or 3%, or 4% excluding the impact of the weaker U.S. dollar. The increase was driven by higher computer and equipment costs, travel and business development costs and professional fees, partially offset by lower employee-related costs.

Reported operating leverage on a net revenue basis was positive 15.1%, compared with negative 20.4% in the prior year. Adjusted operating leverage on a net revenue basis was positive 2.1%, compared with positive 3.8% in the prior year.

The reported efficiency ratio was 59.3%, compared with 65.5% in the prior year, and was 59.3% on a net revenue basis, compared with 69.3% in the prior year. The adjusted efficiency ratio was 58.7%, compared with 56.9% in the prior year, and 58.7% on a net revenue basis, compared with 60.0% in the prior year.

Non-interest expense is detailed in the unaudited condensed consolidated financial statements.

Adjusted results in this Non-Interest Expense section are non-GAAP amounts or non-GAAP measures. Please refer to the Non-GAAP Measures section.

Income Taxes
The provision for income taxes was $422 million, an increase of $104 million from the fourth quarter of 2019, and an increase of $152 million from the third quarter of 2020. The effective tax rate for the current quarter was 21.1%, relatively unchanged from 21.0% in the fourth quarter of 2019, and higher than 18.0% in the third quarter of 2020.

The adjusted provision for income taxes was $429 million, a decrease of $25 million from the fourth quarter of 2019, and an increase of $149 million from the third quarter of 2020. The adjusted effective tax rate was 21.1% in the current quarter, compared with 22.0% in the fourth quarter of 2019, and higher than 18.2% in the third quarter of 2020. The higher reported and adjusted effective tax rates in the current quarter relative to the third quarter of 2020 were primarily due to earnings mix, including the impact of lower pre-tax income in the prior quarter.

Adjusted results in this Income Taxes section are non-GAAP amounts or non-GAAP measures. Please refer to the Non-GAAP Measures section.

(1)

Effective the first quarter of 2020, the bank adopted IFRS 16, Leases (IFRS 16), recognizing the cumulative effect of adoption in opening retained earnings with no changes to prior periods. Under IFRS 16, the bank as lessee is required to recognize a right-of-use asset and a corresponding lease liability for most leases. For the three months ended October 31, 2020, the bank recognized $90 million of depreciation on the right-of-use assets recorded in non-interest expense and $13 million of interest on the lease liability recorded in interest expense. For the twelve months ended October 31, 2020, the bank recognized $360 million and $53 million, respectively. Refer to the Changes in Accounting Policies in 2020 section on page 118 of BMO's Annual Report for further details.

Capital Management
BMO manages its capital within the capital management framework described in the Enterprise-Wide Capital Management section of BMO's 2020 Annual Report.

Fourth Quarter 2020 Regulatory Capital Review
BMO's Common Equity Tier 1 (CET1) Ratio was 11.9% as at October 31, 2020, up from 11.6% at the end of the third quarter, primarily due to retained earnings growth and the issuance of common shares through the Shareholder Dividend Reinvestment and Share Purchase Plan (DRIP), with risk-weighted assets relatively unchanged.

CET1 Capital was $40.1 billion as at October 31, 2020, up from $39.0 billion as at July 31, 2020, driven by retained earnings growth and the issuance of common shares through DRIP. CET1 capital increased from $36.1 billion as at October 31, 2019, due to retained earnings growth, the adjustment for transitional arrangements for expected credit loss provisioning, and the elimination of the provisioning shortfall deduction, the issuance of common shares through the DRIP, and other net positive impacts.

RWA were $336.6 billion as at October 31, 2020, down from $337.4 billion as at July 31, 2020, primarily due to lower loans and the impact of foreign exchange movements, largely offset by model and methodology changes and other impacts. RWA were up from $317.0 billion as at October 31, 2019, due primarily to changes in asset quality and increased asset size.

The Tier 1 Capital Ratio was 13.6% as at October 31, 2020, compared with 13.1% as at July 31, 2020, and 13.0% as at October 31, 2019, primarily driven by factors impacting CET1 capital and RWA and the issuance of the $1,250 million Limited Recourse Capital Notes, Series 1 (LRCN), partially offset by the announced preferred shares redemptions. The Total Capital Ratio was 16.2% as at October 31, 2020, compared with 15.8% as at July 31, 2020 and 15.2% as at October 31, 2019. The Total Capital Ratio was higher than prior periods, primarily due to the factors impacting the Tier 1 Capital Ratio, and higher than October 31, 2019, also due to the issuance of subordinated notes.

The impact of foreign exchange movements on capital ratios was largely offset. BMO's investments in foreign operations are primarily denominated in U.S. dollars, and the foreign exchange impact of U.S.-dollar-denominated RWA and capital deductions may result in variability in the bank's capital ratios. BMO may manage the impact of foreign exchange movements on its capital ratios and did so during the fourth quarter. Any such activities could also impact the bank's book value and return on equity.

BMO's Leverage Ratio was 4.8% as at October 31, 2020, compared with 4.7% as at July 31, 2020, as higher Tier 1 Capital was partially offset by higher leverage exposures. The October 31, 2020 Leverage Ratio increased from 4.3% as at October 31, 2019, primarily driven by higher Tier 1 Capital. Leverage exposures were largely consistent with the prior year, as increased leverage exposures were offset by the temporary exclusion of central bank reserves and sovereign-issued securities that qualify as High Quality Liquid Assets under the Office of the Superintendent of Financial Institutions' (OSFI) Liquidity Adequacy Requirements Guideline.

Regulatory Capital
Regulatory capital requirements for BMO are determined in accordance with guidelines issued by OSFI, which is based on the Basel III framework developed by the Basel Committee on Banking Supervision (BCBS). For more information, refer to the Enterprise-Wide Capital Management section on page 63 of BMO's 2020 Annual Report.

OSFI's capital requirements are summarized in the following table.

(% of risk-weighted assets)

Minimum capital
requirements

Pillar 1 Capital Buffer

(1)

Domestic Stability
Buffer (2)

OSFI capital
requirements including
capital buffers

BMO Capital and
Leverage Ratios as at
October 31, 2020

Common Equity Tier 1 Ratio

4.5%

3.5%

1.0%

9.0%

11.9%

Tier 1 Capital Ratio

6.0%

3.5%

1.0%

10.5%

13.6%

Total Capital Ratio

8.0%

3.5%

1.0%

12.5%

16.2%

Leverage Ratio

3.0%

na

na

3.0%

4.8%

(1)

The minimum 4.5% CET1 Ratio requirement is augmented by 3.5% in Pillar 1 Capital Buffers, which can absorb losses during periods of stress. The Pillar 1 Capital Buffers include a 2.5% Capital Conservation Buffer, a 1.0% Common Equity Tier 1 Surcharge for domestic systematically important banks (D-SIBs) and a Countercyclical Buffer as prescribed by OSFI (immaterial for the fourth quarter of 2020). If a bank's capital ratios fall within the range of this combined buffer, restrictions on discretionary distributions of earnings (such as dividends, share repurchases and discretionary compensation) would ensue, with the degree of such restrictions varying according to the position of the bank's ratios within the buffer range.

(2)

OSFI requires all D-SIBs to maintain a Domestic Stability Buffer (DSB) against Pillar 2 risks associated with systemic vulnerabilities. The DSB can range from 0% to 2.5% of total RWA and is set at 1.0% at October 31, 2020. Breaches of the DSB will not result in a bank being subject to automatic constraints on capital distributions.

na – not applicable

Regulatory Capital Position

(Canadian $ in millions, except as noted)

Q4-2020

Q3-2020

Q4-2019

Gross common equity (1)

49,995

49,239

45,728

Regulatory adjustments applied to common equity

(9,918)

(10,255)

(9,657)

Common Equity Tier 1 capital (CET1)

40,077

38,984

36,071

Additional Tier 1 eligible capital (2)

5,848

5,348

5,348

Regulatory adjustments applied to Tier 1

(85)

(86)

(218)

Additional Tier 1 capital (AT1)

5,763

5,262

5,130

Tier 1 capital (T1 = CET1 + AT1)

45,840

44,246

41,201

Tier 2 eligible capital (3)

8,874

8,953

7,189

Regulatory adjustments applied to Tier 2

(53)

(50)

(50)

Tier 2 capital (T2)

8,821

8,903

7,139

Total capital (TC = T1 + T2)

54,661

53,149

48,340

Risk-weighted Assets (4)

336,607

337,377

317,029

Leverage Ratio Exposures

953,640

937,266

956,493

Capital ratios (%)

CET1 Ratio

11.9

11.6

11.4

Tier 1 Capital Ratio

13.6

13.1

13.0

Total Capital Ratio

16.2

15.8

15.2

Leverage Ratio

4.8

4.7

4.3

(1)

Gross common equity includes issued qualifying common shares, retained earnings, accumulated other comprehensive income and eligible common share capital issued by subsidiaries. Regulatory adjustments may include a portion of expected credit loss provisions.

(2)

Additional Tier 1 eligible capital includes directly and indirectly issued qualifying Additional Tier 1 instruments.

(3)

Tier 2 eligible capital includes subordinated debentures and may include a portion of expected loan loss provisions.

(4)

For institutions using advanced approaches for credit risk or operational risk, there is a capital floor as prescribed in OSFI's CAR Guideline.

Capital Developments
During the quarter, 3,530,719 common shares were issued through the Shareholder Dividend Reinvestment and Share Purchase Plan and the exercise of stock options.

On September 16, 2020, BMO issued $1,250 million 4.3% LRCN (Non-Viability Contingent Capital (NVCC)), which are classified as equity and form part of the Additional Tier 1 capital. Upon the occurrence of a recourse event, the noteholders will have recourse to assets held in a consolidated trust managed by a third party trustee. The trust assets are comprised of $1,250 million of BMO issued Non-Cumulative 5-year Rate Reset Class B Preferred Shares, Series 48 (NVCC) (Preferred Shares Series 48) issued concurrently with the LRCN. As the Preferred Shares Series 48 eliminate on consolidation, they do not currently form part of the bank's Additional Tier 1 capital.

On November 2, 2020, BMO announced its intention to redeem all of its $1,000 million 3.34% Series H Medium-Term Notes Second Tranche (NVCC) on December 8, 2020.

On November 25, 2020, BMO redeemed all of its 6 million issued and outstanding Non-Cumulative Perpetual Class B Preferred Shares, Series 35 (NVCC) for an aggregate total of $156 million and all of its 600,000 issued and outstanding Non-Cumulative 5-Year Rate Reset Class B Preferred Shares, Series 36 (NVCC) for an aggregate total of $600 million.

Dividends
On December 1, 2020, BMO announced that the Board of Directors had declared a quarterly dividend on common shares of $1.06 per share, consistent with the prior quarter and the prior year. The dividend is payable on February 26, 2021, to shareholders of record on February 1, 2021. Effective March 13, 2020, OSFI prohibited federally regulated financial institutions from increasing their common share dividend. OSFI will advise at the appropriate time on the unwinding of this guidance. Common shareholders may elect to have their cash dividends reinvested in common shares of BMO, in accordance with the Shareholder Dividend Reinvestment and Share Purchase Plan. Until further notice, such additional common shares will be purchased on the open market.

For the purposes of the Income Tax Act (Canada) and any similar provincial and territorial legislation, BMO designates all dividends paid or deemed to be paid on both its common and preferred shares as “eligible dividends”, unless indicated otherwise.

Caution
This Capital Management section contains forward-looking statements. Please refer to the Caution Regarding Forward-Looking Statements.

Review of Operating Groups' Performance

How BMO Reports Operating Group Results
The following sections review the financial results of each of the operating groups for the fourth quarter of 2020. See also the Impact of COVID-19 and Enterprise-Wide Risk Management sections in BMO's 2020 Annual Report.

Periodically, certain business lines and units within the business lines are transferred between client and corporate support groups to more closely align BMO's organizational structure with its strategic priorities. In addition, allocations of revenue, provisions for credit losses and expenses are updated to better align with current experience.

The bank adopted IFRS 16, Leases (IFRS 16), effective the first quarter of 2020, and recognized the cumulative effect of adoption in opening retained earnings with no changes to prior periods. Under IFRS 16, the bank as lessee is required to recognize a right-of-use asset and a corresponding lease liability for most leases. Depreciation on the right-of-use assets has been recorded in non-interest expense and interest on the lease liability in interest expense. Refer to the Changes in Accounting Policies in 2020 section on page 118 of BMO's 2020 Annual Report for further details.

BMO analyzes revenue at the consolidated level based on GAAP revenue as reported in the consolidated financial statements rather than on a taxable equivalent basis (teb), which is consistent with the bank's Canadian peer group. Like many banks, BMO analyzes revenue on a teb basis at the operating group level. Revenue and the provision for income taxes are increased on tax-exempt securities to an equivalent before-tax basis to facilitate comparisons of income between taxable and tax-exempt sources. The offset to the group teb adjustments is reflected in Corporate Services revenue and provision for income taxes.

Personal and Commercial Banking (P&C)

(Canadian $ in millions, except as noted)

Q4-2020

Q3-2020

Q4-2019

Fiscal 2020

Fiscal 2019

Net interest income (teb)

2,602

2,616

2,599

10,450

10,101

Non-interest revenue

761

745

839

3,116

3,261

Total revenue (teb)

3,363

3,361

3,438

13,566

13,362

Provision for (recovery of) credit losses on impaired loans

233

366

200

1,205

704

Provision for (recovery of) credit losses on performing loans

137

536

15

1,064

100

Total provision for credit losses

370

902

215

2,269

804

Non-interest expense

1,713

1,712

1,766

6,965

6,972

Income before income taxes

1,280

747

1,457

4,332

5,586

Provision for income taxes (teb)

309

164

354

1,027

1,351

Reported net income

971

583

1,103

3,305

4,235

Amortization of acquisition-related intangible assets (1)

10

10

11

41

45

Adjusted net income

981

593

1,114

3,346

4,280

Net income growth (%)

(11.9)

(42.8)

5.0

(21.9)

7.2

Adjusted net income growth (%)

(11.9)

(42.4)

4.9

(21.8)

7.1

Revenue growth (%)

(2.2)

(1.4)

6.5

1.5

6.7

Non-interest expense growth (%)

(3.0)

(3.0)

4.0

(0.1)

4.9

Adjusted non-interest expense growth (%)

(3.0)

(2.9)

4.1

5.0

Return on equity (%)

14.7

8.5

17.7

12.5

17.5

Adjusted return on equity (%)

14.9

8.7

17.9

12.6

17.7

Operating leverage (teb) (%)

0.8

1.6

2.5

1.6

1.8

Adjusted operating leverage (teb) (%)

0.8

1.5

2.4

1.5

1.7

Efficiency ratio (teb) (%)

50.9

51.0

51.4

51.3

52.2

Adjusted efficiency ratio (teb) (%)

50.5

50.6

50.9

50.9

51.7

Net interest margin on average earning assets (teb) (%)

2.86

2.82

2.92

2.86

2.95

Average earning assets

362,442

369,298

352,478

365,143

341,900

Average gross loans and acceptances

370,537

377,828

362,612

374,176

350,509

Average net loans and acceptances

367,857

375,420

360,933

371,974

348,904

Average deposits

357,974

357,162

293,977

336,983

281,858

(1)

Total P&C before tax amounts of $14 million in Q4-2020, $13 million in Q3-2020 and $15 million in Q4-2019; $55 million for fiscal 2020 and $59 million for fiscal 2019 are included in non-interest expense.

Adjusted results in this table are non-GAAP amounts or non-GAAP measures. Please refer to the Non-GAAP Measures section.

The Personal and Commercial Banking (P&C) operating group represents the sum of the bank's two retail and commercial operating segments, Canadian Personal and Commercial Banking (Canadian P&C) and U.S. Personal and Commercial Banking (U.S. P&C). The P&C banking business reported net income was $971 million, compared with $1,103 million in the prior year. Adjusted net income was $981 million, compared with $1,114 million in the prior year, and excludes the amortization of acquisition-related intangible assets. Reported and adjusted net income were impacted by higher provisions for credit losses, which increased $155 million pre-tax, or $115 million after tax from the prior year. These operating segments are reviewed separately in the sections that follow.

Adjusted results in this P&C section are non-GAAP amounts or non-GAAP measures. Please refer to the Non-GAAP Measures section. 

Canadian Personal and Commercial Banking (Canadian P&C)

(Canadian $ in millions, except as noted)

Q4-2020

Q3-2020

Q4-2019

Fiscal 2020

Fiscal 2019

Net interest income

1,544

1,509

1,543

6,105

5,885

Non-interest revenue

487

453

535

1,930

2,099

Total revenue

2,031

1,962

2,078

8,035

7,984

Provision for (recovery of) credit losses on impaired loans

180

257

134

787

544

Provision for (recovery of) credit losses on performing loans

11

313

11

623

63

Total provision for credit losses

191

570

145

1,410

607

Non-interest expense

968

960

976

3,890

3,836

Income before income taxes

872

432

957

2,735

3,541

Provision for income taxes

225

112

247

707

917

Reported net income

647

320

710

2,028

2,624

Amortization of acquisition-related intangible assets (1)

1

2

2

Adjusted net income

648

320

710

2,030

2,626

Personal revenue

1,250

1,213

1,293

4,968

4,994

Commercial revenue

781

749

785

3,067

2,990

Net income growth (%)

(8.8)

(50.8)

5.0

(22.7)

2.7

Revenue growth (%)

(2.2)

(4.0)

7.1

0.6

5.2

Non-interest expense growth (%)

(0.9)

5.6

1.4

4.2

Adjusted non-interest expense growth (%)

(0.8)

5.6

1.4

4.2

Return on equity (%)

22.7

11.0

28.3

18.1

27.3

Adjusted return on equity (%)

22.7

11.1

28.3

18.1

27.3

Operating leverage (%)

(1.3)

(4.0)

1.5

(0.8)

1.0

Adjusted operating leverage (%)

(1.4)

(4.0)

1.5

(0.8)

1.0

Efficiency ratio (%)

47.6

49.0

47.0

48.4

48.1

Net interest margin on average earning assets (%)

2.60

2.54

2.69

2.60

2.65

Average earning assets

236,550

236,143

227,124

234,953

222,260

Average gross loans and acceptances

251,042

251,028

243,395

250,223

236,889

Average net loans and acceptances

249,500

249,628

242,457

248,972

236,000

Average deposits

217,927

213,086

183,975

204,942

175,125

(1)

Before tax amounts of $1 million in Q4-2020, $nil in both Q3-2020 and Q4-2019; $2 million for both fiscal 2020 and fiscal 2019 are included in non-interest expense.

Adjusted results in this table are non-GAAP amounts or non-GAAP measures. Please refer to the Non-GAAP Measures section.

Q4 2020 vs. Q4 2019
Canadian P&C reported net income was $647 million and adjusted net income was $648 million, or 9% lower than the reported and adjusted net income of $710 million in the prior year. Adjusted net income excludes the amortization of acquisition-related intangible assets. Net income decreased due to lower revenue and higher provisions for credit losses, partially offset by lower expenses.

Revenue was $2,031 million, or 2% lower than $2,078 million in the prior year, primarily due to lower non-interest revenue, including lower credit card fee revenue and deposit fee revenue, with net interest income relatively unchanged, as higher balances across most products were offset by lower margins. Revenue was negatively impacted by the COVID-19 pandemic with pressure on margins from the record-low interest rate environment, and lower credit card fee revenue and deposit fee revenue. Net interest margin of 2.60% decreased 9 basis points, driven by lower deposit margins, partially offset by the benefit of deposits growing faster than loans.

Personal revenue decreased $43 million or 3%, due to lower non-interest revenue and lower net interest income, with lower margins more than offsetting higher balances across most products. Commercial revenue decreased $4 million, due to lower non-interest revenue, partially offset by higher net interest income with higher balances across most products more than offsetting lower margins.

Total provision for credit losses was $191 million, and increased $46 million from the prior year. The provision for credit losses on impaired loans was $180 million, an increase of $46 million, due to higher commercial provisions, partially offset by lower consumer provisions. There was a $11 million provision for credit losses on performing loans in the current quarter, unchanged from the prior year.

Non-interest expense was $968 million, a decrease of $8 million or 1% from the prior year, primarily due to lower employee-related costs, largely offset by higher technology and pension costs.

Average gross loans and acceptances increased $7.6 billion or 3% from the prior year to $251.0 billion. Personal lending balances (excluding retail cards) increased 3%. Commercial loan balances (excluding corporate cards) increased 4%. Average deposits increased $34.0 billion or 18% to $217.9 billion. Personal deposit balances increased 11% and commercial deposit balances increased 31%, reflecting the higher liquidity retained by customers, due to the impact of COVID-19.

Gross loans and acceptances as at October 31, 2020, increased $6.7 billion or 3% from the prior year to $253.0 billion, with growth in personal loans (excluding retail cards) of 4% and growth in commercial loans (excluding corporate cards) of 2%. Deposits as at October 31, 2020, increased $32.1 billion or 17% to $220.6 billion, with growth in personal deposit balances of 10% and in commercial deposit balances of 28%.

Q4 2020 vs. Q3 2020
Reported net income was $647 million, an increase of $327 million from the prior quarter, and adjusted net income was $648 million, an increase of $328 million, primarily driven by lower provisions for credit losses, with higher revenue, partially offset by higher expenses.

Revenue was $2,031 million, an increase of $69 million or 4% from the prior quarter, due to higher non-interest revenue across most categories, higher balances across most products and higher margins. Net interest margin of 2.60% increased 6 basis points from the prior quarter, due to the benefit of deposits growing faster than loans and higher loan margins, partially offset by lower deposit margins.

Personal revenue increased $37 million or 3%, due to higher net interest income, with higher balances across most products and higher loan margins, partially offset by lower deposit margins, and higher non-interest revenue. Commercial revenue increased $32 million or 5%, primarily due to higher non-interest revenue and higher net interest income with higher balances, partially offset by lower margins.

Total provision for credit losses was $191 million, a decrease of $379 million from the prior quarter. The provision for credit losses on impaired loans decreased $77 million, due to lower commercial and consumer provisions. There was a $11 million provision for credit losses on performing loans in the current quarter, compared with a $313 million provision in the prior quarter.

Non-interest expense was $968 million, an increase of $8 million or 1% from the prior quarter.

Average gross loans and acceptances were relatively unchanged from the prior quarter, while average deposits increased $4.8 billion or 2%.

Gross loans and acceptances as at October 31, 2020, increased $2.4 billion or 1% from the prior quarter, primarily driven by growth in personal loans (excluding retail cards) of 2%, partially offset by decline in commercial loans (excluding corporate cards) of 1%. Deposits as at October 31, 2020, increased $3.2 billion or 1%, with growth of 4% in commercial deposit balances and relatively unchanged in personal deposit balances.

Adjusted results in this Canadian P&C section are non-GAAP amounts or non-GAAP measures. Please refer to the Non-GAAP Measures section.

U.S. Personal and Commercial Banking (U.S. P&C)

(US$ in millions, except as noted)

Q4-2020

Q3-2020

Q4-2019

Fiscal 2020

Fiscal 2019

Net interest income (teb)

800

815

798

3,231

3,173

Non-interest revenue

207

215

230

882

875

Total revenue (teb)

1,007

1,030

1,028

4,113

4,048

Provision for (recovery of) credit losses on impaired loans

40

81

51

310

121

Provision for (recovery of) credit losses on performing loans

95

166

3

328

28

Total provision for credit losses

135

247

54

638

149

Non-interest expense

564

553

597

2,287

2,360

Income before income taxes

308

230

377

1,188

1,539

Provision for income taxes (teb)

63

38

80

238

327

Reported net income

245

192

297

950

1,212

Amortization of acquisition-related intangible assets (1)

8

7

8

30

32

Adjusted net income

253

199

305

980

1,244

Personal revenue

320

330

337

1,293

1,359

Commercial revenue

687

700

691

2,820

2,689

Net income growth (%)

(17.3)

(30.9)

3.6

(21.6)

11.7

Adjusted net income growth (%)

(17.1)

(30.3)

3.3

(21.2)

11.1

Revenue growth (%)

(2.0)

0.2

4.1

1.6

5.6

Non-interest expense growth (%)

(5.6)

(8.7)

0.7

(3.1)

2.6

Adjusted non-interest expense growth (%)

(5.5)

(8.7)

0.9

(3.0)

2.8

Return on equity (%)

8.6

6.6

10.5

8.3

11.0

Adjusted return on equity (%)

8.8

6.8

10.8

8.5

11.3

Operating leverage (teb) (%)

3.6

8.9

3.4

4.7

3.0

Adjusted operating leverage (teb) (%)

3.5

8.9

3.2

4.6

2.8

Efficiency ratio (teb) (%)

56.0

53.7

58.1

55.6

58.3

Adjusted efficiency ratio (teb) (%)

55.0

52.8

57.1

54.6

57.3

Net interest margin on average earning assets (teb) (%)

3.34

3.31

3.35

3.34

3.53

Average earning assets

95,255

97,997

94,682

96,810

90,035

Average gross loans and acceptances

90,415

93,317

90,047

92,170

85,505

Average net loans and acceptances

89,554

92,575

89,488

91,462

84,966

Average deposits

105,964

106,068

83,085

98,203

80,316

(Canadian $ equivalent in millions)

Net interest income (teb)

1,058

1,107

1,056

4,345

4,216

Non-interest revenue

274

292

304

1,186

1,162

Total revenue (teb)

1,332

1,399

1,360

5,531

5,378

Provision for (recovery of) credit losses on impaired loans

53

109

66

418

160

Provision for (recovery of) credit losses on performing loans

126

223

4

441

37

Total provision for credit losses

179

332

70

859

197

Non-interest expense

745

752

790

3,075

3,136

Income before income taxes

408

315

500

1,597

2,045

Provision for income taxes (teb)

84

52

107

320

434

Reported net income

324

263

393

1,277

1,611

Adjusted net income

333

273

404

1,316

1,654

Net income growth (%)

(17.5)

(28.7)

5.0

(20.7)

15.3

Adjusted net income growth (%)

(17.3)

(28.1)

4.7

(20.4)

14.7

Revenue growth (%)

(2.2)

2.6

5.6

2.8

8.9

Non-interest expense growth (%)

(5.7)

(6.5)

2.2

(1.9)

5.8

Adjusted non-interest expense growth (%)

(5.6)

(6.4)

2.4

(1.9)

6.0

Average earning assets

125,892

133,155

125,354

130,190

119,640

Average gross loans and acceptances

119,495

126,800

119,217

123,953

113,620

Average net loans and acceptances

118,357

125,792

118,476

123,002

112,904

Average deposits

140,047

144,076

110,002

132,041

106,733

(1)

Before tax amounts of US$10 million in Q4-2020, US$9 million in Q3-2020 and US$11 million in Q4-2019; US$39 million for fiscal 2020 and US$43 million for fiscal 2019 are included in non-interest expense.

Adjusted results in this table are non-GAAP amounts or non-GAAP measures. Please refer to the Non-GAAP Measures section.

Q4 2020 vs. Q4 2019
U.S. P&C reported net income was $324 million, or 17% lower than $393 million in the prior year, and adjusted net income was $333 million, or 17% lower than $404 million. Adjusted net income excludes the amortization of acquisition-related intangible assets. All amounts in the remainder of this section are on a U.S. dollar basis.

Reported net income was $245 million, or 17% lower than $297 million in the prior year, and adjusted net income was $253 million, or 17% lower than $305 million, due to higher provisions for credit losses on performing loans, with lower revenue more than offset by lower expenses.

Revenue was $1,007 million, or 2% lower than $1,028 million in the prior year, due to lower non-interest revenue across most categories with net interest income relatively unchanged, with higher deposit balances and loan margins largely offset by lower deposit product margins. Revenue was negatively impacted by the COVID-19 pandemic, as a record-low interest rate environment resulted in pressure on deposit margins. Net interest margin of 3.34% decreased 1 basis point, primarily due to lower deposit product margins driven by the impact of a lower rate environment, partially offset by deposits growing faster than loans and higher loan margins.

Personal revenue decreased $16 million or 5%, largely due to lower deposit revenue. Commercial revenue decreased $5 million or 1%, primarily due to lower non-interest revenue, partially offset by higher net interest income, with higher loan margins and deposit balances largely offset by lower deposit product margins.

Total provision for credit losses was $135 million, an increase of $81 million from the prior year. The provision for credit losses on impaired loans was $40 million, a decrease of $11 million, due to lower consumer and commercial provisions. There was a $95 million provision for credit losses on performing loans in the current quarter, compared with a $3 million provision in the prior year.

Non-interest expense was $564 million, a decrease of $33 million or 6% from the prior year, and adjusted non-interest expense was $554 million, a decrease of $32 million or 5%, primarily due to lower employee-related costs and a continued focus on expense management.

Average gross loans and acceptances increased $0.4 billion or less than 1% from the prior year to $90.4 billion, driven by the growth in government lending loan programs due to the impact of COVID-19. Commercial loan balances increased 1% and personal lending balances decreased 2%. Average deposits increased $22.9 billion or 28% to $106.0 billion, with 54% growth in commercial deposit balances and 7% growth in personal deposit balances, reflecting the higher liquidity retained by customers due to the impact of COVID-19.

Gross loans and acceptances as at October 31, 2020, decreased $2.1 billion or 2% from the prior year to $88.7 billion, with a decrease in commercial loans of 2% and lower personal loan balances of 5%. Deposits as at October 31, 2020, increased $18.4 billion or 21% to $104.6 billion, with growth in commercial deposit balances of 42% and in personal deposit balances of 4%.

Q4 2020 vs. Q3 2020
Reported net income was $324 million, an increase of $61 million or 23% from the prior quarter, and adjusted net income was $333 million, an increase of $60 million or 22%. All amounts in the remainder of this section are on a U.S. dollar basis.

Reported net income was $245 million, an increase of $53 million or 28%, and adjusted net income was $253 million, an increase of $54 million or 27%, due to lower provisions for credit losses, partially offset by lower revenue and higher expenses.

Revenue was $1,007 million, or 2% lower than $1,030 million in the prior quarter, due to lower net interest income with higher loan margins more than offset by lower deposit product margins and loan balances, and lower non-interest revenue. Net interest margin of 3.34% increased 3 basis points, primarily due to higher loan margins and lower loan balances, partially offset by lower deposit product margins.

Personal revenue decreased $10 million or 3%, primarily due to lower net interest income driven by lower loan and deposit balances. Commercial revenue decreased $13 million or 2%, primarily due to lower net interest income with lower deposit margins and lower loan balances, partially offset by higher loan margins, and lower non-interest revenue.

Total provision for credit losses was $135 million, a decrease of $112 million from the prior quarter. The provision for credit losses on impaired loans was $40 million, a decrease of $41 million from the prior quarter, primarily due to lower commercial provisions. There was a $95 million provision for credit losses on performing loans in the current quarter, compared with a $166 million provision the prior quarter.

Non-interest expense was $564 million, an increase of $11 million or 2% from the prior quarter and adjusted non-interest expense was $554 million, an increase of $10 million or 2%, as higher premises and technology costs were partially offset by lower employee-related costs.

Average gross loans and acceptances decreased $2.9 billion or 3% from the prior quarter. Commercial loans decreased 3% and personal loans decreased 4%. Average deposits were relatively unchanged.

Gross loans and acceptances as at October 31, 2020, decreased $2.1 billion or 2% from the prior quarter. Deposits as at October 31, 2020, decreased $1.0 billion or 1%.

Adjusted results in this U.S. P&C section are non-GAAP amounts or non-GAAP measures. Please refer to the Non-GAAP Measures section.

BMO Wealth Management

(Canadian $ in millions, except as noted)

Q4-2020

Q3-2020

Q4-2019

Fiscal 2020

Fiscal 2019

Net interest income

228

229

236

900

935

Non-interest revenue

1,081

2,255

1,331

5,808

6,727

Total revenue

1,309

2,484

1,567

6,708

7,662

Insurance claims, commissions and changes in policy benefit liabilities (CCPB)

1,189

335

1,708

2,709

Revenue, net of CCPB

1,309

1,295

1,232

5,000

4,953

Provision for (recovery of) credit losses on impaired loans

1

1

4

2

Provision for (recovery of) credit losses on performing loans

5

7

(1)

18

(2)

Total provision for (recovery of) credit losses

5

8

22

Non-interest expense

882

837

860

3,519

3,523

Income before income taxes

422

450

372

1,459

1,430

Provision for income taxes

102

109

106

363

371

Reported net income

320

341

266

1,096

1,059

Amortization of acquisition-related intangible assets (1)

8

8

9

34

37

Reinsurance adjustment (2)

25

25

Adjusted net income

328

349

300

1,130

1,121

Traditional Wealth businesses reported net income

253

271

236

893

861

Traditional Wealth businesses adjusted net income

261

279

245

927

898

Insurance reported net income (loss)

67

70

30

203

198

Insurance adjusted net income (loss)

67

70

55

203

223

Net income growth (%)

20.0

36.9

22.0

3.5

(1.1)

Adjusted net income growth (%)

9.3

35.5

31.3

0.8

0.8

Revenue growth (%)

(16.4)

17.6

(0.2)

(12.4)

21.6

Revenue growth, net of CCPB (%)

6.3

5.7

4.4

1.0

0.1

Adjusted CCPB

1,189

310

1,708

2,684

Revenue growth, net of adjusted CCPB (%)

4.2

5.7

6.5

0.5

0.6

Non-interest expense growth (%)

2.5

(5.4)

(2.6)

(0.1)

0.2

Adjusted non-interest expense growth (%)

2.6

(5.4)

(2.4)

0.3

Return on equity (%)

20.1

21.1

16.6

17.1

16.7

Adjusted return on equity (%)

20.6

21.6

18.7

17.7

17.7

Operating leverage, net of CCPB (%)

3.8

11.1

7.0

1.1

(0.1)

Adjusted operating leverage, net of CCPB (%)

1.6

11.1

8.9

0.5

0.3

Reported efficiency ratio (%)

67.3

33.7

54.9

52.4

46.0

Reported efficiency ratio, net of CCPB (%)

67.3

64.6

69.8

70.4

71.1

Adjusted efficiency ratio (%)

66.5

33.3

54.2

51.8

45.4

Adjusted efficiency ratio, net of CCPB (%)

66.5

63.7

67.5

69.5

69.8

Assets under management

482,554

498,020

471,160

482,554

471,160

Assets under administration (3)

411,959

411,122

393,576

411,959

393,576

Average assets

46,583

46,308

42,750

45,573

40,951

Average gross loans and acceptances

27,339

26,999

24,660

26,585

23,519

Average net loans and acceptances

27,296

26,959

24,628

26,547

23,487

Average deposits

46,858

45,345

38,123

43,660

36,419

(1)

Before tax amounts of $10 million in Q4-2020, $11 million in both Q3-2020 and Q4-2019; $43 million for fiscal 2020 and $47 million for fiscal 2019 are included in non-interest expense.

(2)

Q4-2019 reported net income included a reinsurance adjustment of $25 million (pre-tax and after-tax) in CCPB for the net impact of major reinsurance claims from Japanese typhoons incurred after the announced wind-down of the reinsurance business.

(3)

Certain assets under management that are also administered by the bank are included in assets under administration.

Adjusted results in this table are non-GAAP amounts or non-GAAP measures. Please refer to the Non-GAAP Measures section.

Q4 2020 vs. Q4 2019
BMO Wealth Management reported net income was $320 million, an increase of $54 million or 20% from the prior year, and adjusted net income was $328 million, an increase of $28 million or 9%. Adjusted net income excludes the net impact of major reinsurance claims incurred in the prior year after the announced wind-down of the reinsurance business and the amortization of acquisition-related intangible assets in both years. Traditional Wealth reported net income was $253 million, an increase of $17 million or 7%, and adjusted net income was $261 million, an increase of $16 million or 6%, with higher revenue partially offset by higher expenses. Insurance net income was $67 million, an increase of $37 million on a reported basis and $12 million on an adjusted basis, primarily due to the impact of unfavourable market movements in the prior year and a favourable impact from the annual actuarial assumption changes relative to the prior year.

Revenue was $1,309 million, or 16% lower than $1,567 million in the prior year. Revenue, net of reported and adjusted CCPB, was $1,309 million, an increase of $77 million or 6% on a reported basis and $52 million or 4% on an adjusted basis. Revenue in Traditional Wealth was $1,182 million, an increase of $27 million or 2%, primarily due to higher online brokerage revenues and the benefit from higher global markets, partially offset by lower net interest income, as the benefit from strong loan and deposit growth was more than offset by lower margins. Insurance revenue, net of CCPB, was $127 million, an increase of $50 million on a reported basis, and $25 million on an adjusted basis from the prior year, due to the drivers noted above.

Non-interest expense was $882 million, an increase of $22 million or 2%, and adjusted non-interest expense was $872 million, an increase of $23 million or 3%, primarily due to higher revenue-based costs and below-trend expenses in prior year.

Assets under management increased $11.4 billion or 2%, and assets under administration increased $18.4 billion or 5%, primarily driven by stronger global markets, growth in client assets and favourable foreign exchange. Average gross loans and average deposits increased 11% and 23%, respectively.

Q4 2020 vs. Q3 2020
Reported net income was $320 million, or 6% lower than $341 million in the prior quarter, and adjusted net income was $328 million, or 6% lower than $349 million. Traditional Wealth reported net income was $253 million, or 7% lower than $271 million in the prior quarter, and adjusted net income was $261 million, or 7% lower than $279 million, primarily due to higher expenses. Insurance net income was $67 million, compared with $70 million in the prior quarter.

Revenue, net of CCPB, was $1,309 million, an increase of $14 million or 1%. Revenue in Traditional Wealth was $1,182 million, an increase of $6 million and net insurance revenue was $127 million, an increase of $8 million, primarily due to the benefits from changes in investments to improve asset liability management, net of the impact of favourable market movements in the prior quarter relative to the current quarter.

Non-interest expense was $882 million, an increase of $45 million or 5% from the prior quarter, and adjusted non-interest expense was $872 million, an increase of $46 million or 5%, primarily driven by higher revenue-based costs given business performance and investment in the business in the current quarter.

Assets under management decreased $15.5 billion or 3% from the prior quarter, primarily driven by weaker equity markets and unfavourable foreign exchange, and assets under administration increased $0.8 billion or relatively unchanged. Average gross loans and average deposits increased 1% and 3%, respectively.

Adjusted results in this BMO Wealth Management section are non-GAAP amounts or non-GAAP measures. Please refer to the Non-GAAP Measures section.

BMO Capital Markets

(Canadian $ in millions, except as noted)

Q4-2020

Q3-2020

Q4-2019

Fiscal 2020

Fiscal 2019

Net interest income (teb)

817

952

695

3,320

2,390

Non-interest revenue

561

576

484

2,006

2,369

Total revenue (teb)

1,378

1,528

1,179

5,326

4,759

Provision for (recovery of) credit losses on impaired loans

105

79

32

310

52

Provision for (recovery of) credit losses on performing loans

(41)

58

8

349

28

Total provision for credit losses

64

137

40

659

80

Non-interest expense

801

825

792

3,236

3,279

Income (loss) before income taxes

513

566

347

1,431

1,400

Provision for (recovery of) income taxes (teb)

134

140

76

344

309

Reported net income

379

426

271

1,087

1,091

Acquisition integration costs (1)

3

4

2

11

10

Amortization of acquisition-related intangible assets (2)

5

5

9

18

17

Adjusted net income

387

435

282

1,116

1,118

Global Markets revenue

854

981

686

3,222

2,704

Investment and Corporate Banking revenue

524

547

493

2,104

2,055

Net income growth (%)

40.2

35.7

(9.6)

(0.4)

(5.9)

Adjusted net income growth (%)

37.8

36.2

(9.3)

(0.2)

(4.7)

Revenue growth (%)

16.9

26.6

3.6

11.9

8.5

Non-interest expense growth (%)

1.1

3.2

3.0

(1.3)

13.9

Adjusted non-interest expense growth (%)

1.5

2.5

3.1

(1.4)

13.4

Return on equity (%)

12.9

13.6

9.8

9.2

9.9

Adjusted return on equity (%)

13.1

13.9

10.2

9.5

10.1

Operating leverage (teb) (%)

15.8

23.4

0.6

13.2

(5.4)

Adjusted operating leverage (teb) (%)

15.4

24.1

0.5

13.3

(4.9)

Efficiency ratio (teb) (%)

58.1

54.0

67.3

60.8

68.9

Adjusted efficiency ratio (teb) (%)

57.4

53.1

66.1

60.1

68.2

Average assets

367,001

379,131

342,025

369,518

342,626

Average gross loans and acceptances

63,929

71,346

63,005

67,088

60,287

Average net loans and acceptances

63,345

70,810

62,895

66,693

60,199

(1)

KGS-Alpha and Clearpool acquisition integration costs before tax amounts of $3 million in Q4-2020, $5 million in Q3-2020 and $2 million in Q4-2019; $14 million for fiscal 2020 and $13 million for fiscal 2019 are included in non-interest expense.

(2)

Before tax amounts of $6 million in Q4-2020, $8 million in Q3-2020 and $12 million in Q4-2019; $23 million for fiscal 2020 and $22 million for fiscal 2019 are included in non-interest expense.

Adjusted results in this table are non-GAAP amounts or non-GAAP measures. Please refer to the Non-GAAP Measures section.

Q4 2020 vs. Q4 2019
BMO Capital Markets reported net income was $379 million, an increase of $108 million or 40% from the prior year, and adjusted net income was $387 million, an increase of $105 million or 38%. Adjusted net income excludes the amortization of acquisition-related intangible assets and acquisition integration costs. Strong revenue performance was partially offset by higher provisions for credit losses and higher expenses.

Revenue was $1,378 million, an increase of $199 million or 17% from the prior year. Global Markets revenue increased, driven by strong client activity across interest rates, equities and commodities trading. Investment and Corporate Banking revenue increased, primarily driven by higher corporate banking-related revenue, as well as underwriting and advisory revenue.

Total provision for credit losses was $64 million, an increase of $24 million from the prior year. The provision for credit losses on impaired loans was $105 million, an increase of $73 million. There was a $41 million recovery of credit losses on performing loans in the current quarter, compared with a $8 million provision in the prior year.

Non-interest expense was $801 million, an increase of $9 million or 1% from the prior year, and adjusted non-interest expense was $792 million, an increase of $14 million or 2%. The increase was primarily driven by higher employee-related costs, partially offset by lower travel and business development costs, and a continued focus on expense management.

Average gross loans and acceptances increased $0.9 billion or 1% from the prior year to $63.9 billion. Gross loans and acceptances as at October 31, 2020, increased $2.2 billion or 4% from the prior year to $62.8 billion, or 3% excluding the impact of the weaker U.S. dollar, reflecting higher lending activity.

Q4 2020 vs. Q3 2020
Reported net income was $379 million, or 11% lower than $426 million in the prior quarter, and adjusted net income was $387 million, or 11% lower than $435 million.

Revenue was $1,378 million, or 10% lower than $1,528 million in the prior quarter, or 9% excluding the impact of the weaker U.S. dollar. Global Markets revenue decreased, driven by lower interest rates and commodities trading, due to particularly strong client activity in the prior quarter, partially offset by higher equities trading. Investment and Corporate Banking revenue decreased, primarily due to lower advisory revenue, partially offset by higher corporate banking-related revenue.

Total provision for credit losses was $64 million, a decrease of $73 million from the prior quarter. The provision for credit losses on impaired loans increased $26 million. There was a $41 million recovery of credit losses on performing loans, compared with a $58 million provision in the prior quarter.

Non-interest expense was $801 million, a decrease of $24 million or 3%, and adjusted non-interest expense was $792 million, a decrease of $20 million or 3% from the prior quarter, or 1% excluding the impact of the weaker U.S. dollar. The decrease was primarily driven by lower employee-related costs.

Average gross loans and acceptances decreased $7.4 billion or 10% from the prior quarter, or 9% excluding the impact of the weaker U.S. dollar. Gross loans and acceptances as at October 31, 2020, decreased $4.4 billion or 7% from the prior quarter, or 6% excluding the impact of the weaker U.S. dollar, reflecting a decrease in loan utilizations.

Adjusted results in this BMO Capital Markets section are non-GAAP amounts or non-GAAP measures. Please refer to the Non-GAAP Measures section.

Corporate Services

(Canadian $ in millions, except as noted)

Q4-2020

Q3-2020

Q4-2019

Fiscal 2020

Fiscal 2019

Net interest income before group teb offset

(39)

(161)

(89)

(364)

(242)

Group teb offset

(78)

(101)

(77)

(335)

(296)

Net interest income (teb)

(117)

(262)

(166)

(699)

(538)

Non-interest revenue

53

78

69

285

238

Total revenue (teb)

(64)

(184)

(97)

(414)

(300)

Provision for (recovery of) credit losses on impaired loans

1

(2)

3

(7)

Provision for (recovery of) credit losses on performing loans

(8)

7

(5)

Total provision for (recovery of) credit losses

(7)

7

(2)

3

(12)

Non-interest expense

152

70

569

457

856

Income (loss) before income taxes

(209)

(261)

(664)

(874)

(1,144)

Provision for (recovery of) income taxes (teb)

(123)

(143)

(218)

(483)

(517)

Reported net loss

(86)

(118)

(446)

(391)

(627)

    Restructuring costs (1)

357

357

Adjusted net loss

(86)

(118)

(89)

(391)

(270)

Adjusted non-interest expense

152

70

85

457

372

(1)

Q4-2019 reported net income included a $357 million after-tax ($484 million pre-tax) restructuring charge, related to severance and a small amount of real estate-related costs, to continue to improve efficiency, including accelerating delivery against key bank-wide initiatives focused on digitization, organizational redesign and simplification of the business. Restructuring charges are included in non-interest expense.

Adjusted results in this table are non-GAAP amounts or non-GAAP measures. Please refer to the Non-GAAP Measures section.

Corporate Services consists of Corporate Units and Technology and Operations (T&O). Corporate Units provide enterprise-wide expertise, governance and support in a variety of areas, including strategic planning, risk management, finance, legal and regulatory compliance, human resources, communications, marketing, real estate, procurement, data and analytics. T&O develops, monitors, manages and maintains governance of information technology, and also provides cyber security and operations services.

The costs of these Corporate Units and T&O services are largely transferred to the three operating groups (Personal and Commercial Banking, BMO Wealth Management and BMO Capital Markets), with any remaining amounts retained in Corporate Services results. As such, Corporate Services results largely reflect the impact of residual treasury-related activities, the elimination of taxable equivalent adjustments, and residual unallocated expenses.

Q4 2020 vs. Q4 2019
Corporate Services reported and adjusted net loss for the quarter was $86 million, compared with a reported net loss of $446 million and an adjusted net loss of $89 million in the prior year. Adjusted results in the prior year exclude the restructuring charge. Adjusted results are relatively unchanged, as higher revenue and the impact of a favourable tax rate in the current quarter were offset by higher expenses.

Q4 2020 vs. Q3 2020
Reported and adjusted net loss for the quarter was $86 million, compared with a reported and adjusted net loss of $118 million in the prior quarter. Results increased, primarily due to higher treasury-related revenue, which was below trend in the prior quarter, and the impact of a favourable tax rate in the current quarter, partially offset by higher expenses.

Adjusted results in this Corporate Services section are non-GAAP amounts or non-GAAP measures. Please refer to the Non-GAAP Measures section.

Risk Management
BMO's risk management policies and processes to identify, measure, manage, monitor, mitigate and report its credit and counterparty, market, insurance, liquidity and funding, operational, including technology and cyber-related risks, legal and regulatory, strategic, environmental and social, and reputation risks are outlined in the Enterprise-Wide Risk Management section on pages 73 to 113 of BMO's 2020 Annual Report.

Condensed Consolidated Financial Statements

Consolidated Statement of Income

(Unaudited) (Canadian $ in millions, except as noted)

For the three months ended

   For the twelve months ended

October 31,

July 31,

October 31,

October 31,

October 31,

2020

2020

2019

2020

2019

Interest, Dividend and Fee Income

Loans

$

4,089

$

4,204

$

5,072

$

17,945

$

19,824

Securities

1,009

1,249

1,415

4,980

5,541

Deposits with banks

47

49

195

390

787

5,145

5,502

6,682

23,315

26,152

Interest Expense

Deposits

1,082

1,292

2,203

6,239

8,616

Subordinated debt

64

65

71

265

279

Other liabilities

469

610

1,044

2,840

4,369

1,615

1,967

3,318

9,344

13,264

Net Interest Income

3,530

3,535

3,364

13,971

12,888

Non-Interest Revenue

Securities commissions and fees

247

260

262

1,036

1,023

Deposit and payment service charges

305

299

314

1,221

1,204

Trading revenues (losses)

23

68

(21)

15

298

Lending fees

339

309

313

1,295

1,192

Card fees

94

85

107

358

437

Investment management and custodial fees

466

455

449

1,807

1,747

Mutual fund revenues

355

348

359

1,417

1,419

Underwriting and advisory fees

259

287

221

1,070

975

Securities gains, other than trading

40

31

68

124

249

Foreign exchange gains, other than trading

38

21

29

127

166

Insurance revenues

143

1,321

435

2,178

3,183

Investments in associates and joint ventures

49

52

39

161

151

Other

98

118

148

406

551

2,456

3,654

2,723

11,215

12,595

Total Revenue

5,986

7,189

6,087

25,186

25,483

Provision for Credit Losses

432

1,054

253

2,953

872

Insurance Claims, Commissions and Changes in Policy Benefit Liabilities

1,189

335

1,708

2,709

Non-Interest Expense

Employee compensation

1,950

1,964

2,381

7,944

8,423

Premises and equipment

854

785

759

3,202

2,988

Amortization of intangible assets

159

154

148

620

554

Travel and business development

88

57

134

384

545

Communications

71

71

72

304

296

Professional fees

159

135

165

555

568

Other

267

278

328

1,168

1,256

3,548

3,444

3,987

14,177

14,630

Income Before Provision for Income Taxes

2,006

1,502

1,512

6,348

7,272

Provision for income taxes

422

270

318

1,251

1,514

Net Income

$

1,584

$

1,232

$

1,194

$

5,097

$

5,758

Earnings Per Share (Canadian $)

Basic

$

2.37

$

1.81

$

1.79

$

7.56

$

8.68

Diluted

2.37

1.81

1.78

7.55

8.66

Dividends per common share

1.06

1.06

1.03

4.24

4.06

Certain comparative figures have been reclassified to conform with the current period's presentation.

Condensed Consolidated Financial Statements

Consolidated Statement of Comprehensive Income

(Unaudited) (Canadian $ in millions)

For the three months ended

For the twelve months ended

October 31,

July 31,

October 31,

October 31,

October 31,

2020

2020

2019

2020

2019

Net Income

$

1,584

$

1,232

$

1,194

$

5,097

$

5,758

Other Comprehensive Income (Loss), net of taxes

Items that may subsequently be reclassified to net income

Net change in unrealized gains (losses) on fair value through OCI debt securities

Unrealized gains (losses) on fair value through OCI debt securities arising during the period (1)

(11)

141

67

410

412

Reclassification to earnings of (gains) in the period (2)

(7)

(18)

(29)

(81)

(72)

(18)

123

38

329

340

Net change in unrealized gains (losses) on cash flow hedges

Gains (losses) on derivatives designated as cash flow hedges arising during the period (3)

(160)

83

(36)

1,513

1,444

Reclassification to earnings of (gains) losses on derivatives designated as

cash flow hedges in the period (4)

(55)

(37)

21

(47)

143

(215)

46

(15)

1,466

1,587

Net gains (losses) on translation of net foreign operations

Unrealized gains (losses) on translation of net foreign operations

(143)

(1,180)

35

373

(11)

Unrealized gains (losses) on hedges of net foreign operations (5)

49

206

(17)

(96)

(13)

(94)

(974)

18

277

(24)

Items that will not be reclassified to net income

(Losses) on remeasurement of pension and other employee

future benefit plans (6)

(11)

(189)

(169)

(255)

(552)

Gains (losses) on remeasurement of own credit risk on financial

liabilities designated at fair value (7)

21

(330)

63

(28)

75

Unrealized gains on fair value through OCI equity securities arising during the period (8)

1

1

10

(519)

(105)

(283)

(476)

Other Comprehensive Income (Loss), net of taxes

(317)

(1,324)

(64)

1,789

1,427

Total Comprehensive Income (Loss)

$

1,267

$

(92)

$

1,130

$

6,886

$

7,185

(1)

Net of income tax (provision) recovery of $4 million, $(47) million, $(23) million for the three months ended, and $(143) million, $(140) million for the twelve months ended, respectively.

(2)

Net of income tax provision of $2 million, $6 million, $11 million for the three months ended, and $25 million, $26 million for the twelve months ended, respectively.

(3)

Net of income tax (provision) recovery of $59 million, $(27) million, $15 million for the three months ended, and $(541) million, $(521) million for the twelve months ended, respectively.

(4)

Net of income tax provision (recovery) of $19 million, $13 million, $(7) million for the three months ended, and $16 million, $(51) million for the twelve months ended, respectively.

(5)

Net of income tax (provision) recovery of $(18) million, $(74) million, $6 million for the three months ended, and $35 million, $4 million for the twelve months ended, respectively.

(6)

Net of income tax recovery of $3 million, $65 million, $58 million for the three months ended, and $88 million, $196 million for the twelve months ended, respectively.

(7)

Net of income tax (provision) recovery of $(8) million, $120 million, $(23) million for the three months ended, and $10 million, $(27) million for the twelve months ended, respectively.

(8)

Net of income tax (provision) of $nil, $nil and $(1) million for the three months ended, and $nil, $(1) million for the twelve months ended, respectively.

Condensed Consolidated Financial Statements

Consolidated Balance Sheet

(Unaudited) (Canadian $ in millions)

As at

October 31,

July 31,

October 31,

2020

2020

2019

Assets

Cash and Cash Equivalents

$

57,408

$

76,590

$

48,803

Interest Bearing Deposits with Banks

9,035

8,364

7,987

Securities

Trading

97,834

89,207

85,903

Fair value through profit or loss

13,568

14,053

13,704

Fair value through other comprehensive income

73,407

78,493

64,515

Debt securities at amortized cost

48,466

45,229

24,472

Investments in associates and joint ventures

985

923

844

234,260

227,905

189,438

Securities Borrowed or Purchased Under Resale Agreements

111,878

118,713

104,004

Loans

Residential mortgages

127,024

125,481

123,740

Consumer instalment and other personal

70,148

69,168

67,736

Credit cards

7,889

7,947

8,859

Business and government

243,246

245,983

227,609

448,307

448,579

427,944

Allowance for credit losses

(3,303)

(3,251)

(1,850)

445,004

445,328

426,094

Other Assets

Derivative instruments

36,815

38,796

22,144

Customersʼ liability under acceptances

13,493

18,032

23,593

Premises and equipment

4,183

3,881

2,055

Goodwill

6,535

6,566

6,340

Intangible assets

2,442

2,470

2,424

Current tax assets

1,260

1,717

1,165

Deferred tax assets

1,473

1,456

1,568

Other

25,475

23,690

16,580

91,676

96,608

75,869

Total Assets

$

949,261

$

973,508

$

852,195

Liabilities and Equity

Deposits

$

659,034

$

660,600

$

568,143

Other Liabilities

Derivative instruments

30,375

39,859

23,598

Acceptances

13,493

18,032

23,593

Securities sold but not yet purchased

29,376

30,579

26,253

Securities lent or sold under repurchase agreements

88,658

99,854

86,656

Securitization and structured entities' liabilities

26,889

27,461

27,159

Current tax liabilities

126

56

55

Deferred tax liabilities

108

82

60

Other

36,193

33,885

38,607

225,218

249,808

225,981

Subordinated Debt

8,416

8,513

6,995

Equity

Preferred shares and other equity instruments

6,598

5,348

5,348

Common shares

13,430

13,200

12,971

Contributed surplus

302

302

303

Retained earnings

30,745

29,902

28,725

Accumulated other comprehensive income

5,518

5,835

3,729

Total Equity

56,593

54,587

51,076

Total Liabilities and Equity

$

949,261

$

973,508

$

852,195

Condensed Consolidated Financial Statements

Consolidated Statement of Changes in Equity

(Unaudited) (Canadian $ in millions)

For the three months ended

   For the twelve months ended

October 31,

October 31,

October 31,

October 31,

2020

2019

2020

2019

Preferred Shares and Other Equity Instruments

Balance at beginning of period

$

5,348

$

5,348

$

5,348

$

4,340

Issued during the period

1,250

1,250

1,008

Redeemed during the period

Balance at End of Period

6,598

5,348

6,598

5,348

Common Shares

Balance at beginning of period

13,200

12,958

12,971

12,929

Issued under the Shareholder Dividend Reinvestment and Share Purchase Plan

257

471

Issued under the Stock Option Plan

10

13

40

62

Repurchased for cancellation or for treasury shares

(37)

(52)

(20)

Balance at End of Period

13,430

12,971

13,430

12,971

Contributed Surplus

Balance at beginning of period

302

303

303

300

Stock option expense, net of options exercised

(1)

(1)

Other

1

3

Balance at End of Period

302

303

302

303

Retained Earnings

Balance at beginning of period

29,902

28,241

28,725

25,850

Impact from adopting IFRS 16

na

(59)

na

Net income

1,584

1,194

5,097

5,758

Dividends on preferred shares and distributions payable on other equity instruments

(52)

(52)

(247)

(211)

Dividends on common shares

(685)

(658)

(2,723)

(2,594)

Equity issue expense

(3)

(3)

(8)

Common shares repurchased for cancellation

(70)

Net discount on sale of treasury shares

(1)

(45)

Balance at End of Period

30,745

28,725

30,745

28,725

Accumulated Other Comprehensive Income on Fair Value through OCI Securities, net of taxes

Balance at beginning of period

373

(13)

26

(315)

Unrealized gains (losses) on fair value through OCI debt securities arising during the period

(11)

67

410

412

Unrealized gains on fair value through OCI equity securities arising during the period

1

1

Reclassification to earnings of (gains) during the period

(7)

(29)

(81)

(72)

Balance at End of Period

355

26

355

26

Accumulated Other Comprehensive Income on Cash Flow Hedges, net of taxes

Balance at beginning of period

2,194

528

513

(1,074)

Gains (losses) on derivatives designated as cash flow hedges arising during the period

(160)

(36)

1,513

1,444

Reclassification to earnings of (gains) losses on derivatives designated as cash flow hedges in the period

(55)

21

(47)

143

Balance at End of Period

1,979

513

1,979

513

Accumulated Other Comprehensive Income on Translation

of Net Foreign Operations, net of taxes

Balance at beginning of period

4,074

3,685

3,703

3,727

Unrealized gains (losses) on translation of net foreign operations

(143)

35

373

(11)

Unrealized gains (losses) on hedges of net foreign operations

49

(17)

(96)

(13)

Balance at End of Period

3,980

3,703

3,980

3,703

Accumulated Other Comprehensive (Loss) on Pension and Other Employee

Future Benefit Plans, net of taxes

Balance at beginning of period

(627)

(214)

(383)

169

(Losses) on remeasurement of pension and other employee future benefit plans

(11)

(169)

(255)

(552)

Balance at End of Period

(638)

(383)

(638)

(383)

Accumulated Other Comprehensive (Loss) on Own Credit Risk on

Financial Liabilities Designated at Fair Value, net of taxes

Balance at beginning of period

(179)

(193)

(130)

(205)

Gains (losses) on remeasurement of own credit risk on financial liabilities designated at fair value

21

63

(28)

75

Balance at End of Period

(158)

(130)

(158)

(130)

Total Accumulated Other Comprehensive Income

5,518

3,729

5,518

3,729

Total Equity

$

56,593

$

51,076

$

56,593

$

51,076

na – not applicable due to IFRS 16 adoption.

 INVESTOR AND MEDIA PRESENTATION

Investor Presentation Materials
Interested parties are invited to visit BMO's website at www.bmo.com/investorrelations to review the 2020 Annual MD&A and audited annual consolidated financial statements, quarterly presentation materials and supplementary financial and regulatory information package.

Quarterly Conference Call and Webcast Presentations
Interested parties are also invited to listen to the bank's quarterly conference call on Tuesday, December 1, 2020, at 8.15 a.m. (ET). The call may be accessed by telephone at 416-406-0743 (from within Toronto) or 1-800-898-3989 (toll-free outside Toronto), entering Passcode: 5559347#. A replay of the conference call can be accessed until Thursday, December 31, 2020, by calling 905-694-9451 (from within Toronto) or 1-800-408-3053 (toll-free outside Toronto) and entering Passcode: 4162531#.

A live webcast of the call can be accessed on BMO's website at www.bmo.com/investorrelations. A replay can also be accessed on the website.

Shareholder Dividend Reinvestment and Share Purchase

For other shareholder information, please contact

Plan (the Plan)

Bank of Montreal

Average market price as defined under the Plan

Shareholder Services

August 2020: $75.78

Corporate Secretary's Department

September 2020: $78.28

One First Canadian Place, 21st Floor

October 2020: $82.20

Toronto, Ontario M5X 1A1

Telephone: (416) 867-6785

For dividend information, change in shareholder address

Fax: (416) 867-6793

or to advise of duplicate mailings, please contact

E-mail: [email protected]

Computershare Trust Company of Canada

100 University Avenue, 8th Floor

For further information on this document, please contact

Toronto, Ontario M5J 2Y1

Bank of Montreal

Telephone: 1-800-340-5021 (Canada and the United States)

Investor Relations Department

Telephone: (514) 982-7800 (international)

P.O. Box 1, One First Canadian Place, 10th Floor

Fax: 1-888-453-0330 (Canada and the United States)

Toronto, Ontario M5X 1A1

Fax: (416) 263-9394 (international)

E-mail: [email protected]

To review financial results and regulatory filings and disclosures online,

please visit BMO's website at www.bmo.com/investorrelations.

BMO's 2020 Annual MD&A, audited consolidated financial statements, annual information form and annual report on Form 40-F (filed with the U.S. Securities and Exchange Commission) are available online at www.bmo.com/investorrelations and at www.sedar.com. Printed copies of the bank's complete 2020 audited consolidated financial statements are available free of charge upon request at 416-867-6785 or [email protected].

Annual Meeting 2021

The next Annual Meeting of Shareholders will be held on Wednesday, April 7, 2021, in Toronto, Ontario.

® Registered trademark of Bank of Montreal

Media Relations Contacts: Paul Gammal, Toronto, [email protected], 416-867-6543; Investor Relations Contacts: Bill Anderson, Director, Investor Relations, [email protected], 416-867-7834; Sukhwinder Singh, Director, Investor Relations, [email protected], 416-867-4734

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BMO Financial Group Declares Dividends

TORONTO, Dec. 1, 2020 /PRNewswire/ — Bank of Montreal (TSX: BMO) (NYSE: BMO) today announced that its Board of Directors declared...

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Life Settlement Pioneer Launches PolicyAppraisal.com for Financial Advisors

ATLANTA, Dec. 1, 2020 /PRNewswire/ — Life insurance settlement industry pioneer Wm. Scott Page recently announced the launch of PolicyAppraisal.com, a...

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TORA's OEMS Integrates with Liquidnet's IA Trader to Offer Real Time Actionable Decision Making Tools

LONDON, Dec. 1, 2020 /PRNewswire-PRWeb/ — TORA, the provider of industry leading trading technology, has today announced that it has...