Q1 2013 vs Q1 2012
Net income was $163 million, up $59 million or 56% from a year ago. Adjusted net income was $169 million, up $60 million or 54% from a year ago. Adjusted net income in PCG, excluding Insurance, was $105 million, up $8 million or 8% from a year ago. Results reflect higher revenue, driven by growth in client assets and focused cost management. The prior year's results benefited from higher than usual asset management revenue from a strategic investment. Adjusted net income in Insurance was $64 million, up $52 million, as revenues improved due to the significantly reduced impact of movements in long-term interest rates in the current quarter relative to a year ago and continued business growth in both creditor and life insurance businesses.
Revenue was $779 million, up $82 million or 12% from a year ago. Revenue in PCG, excluding Insurance, was up 2% from a year ago and Insurance revenue was up significantly, due to the factors mentioned above.
Non-interest expense was $569 million, up $11 million or 2%. Adjusted non-interest expense was $561 million, up $10 million or 2% due to higher revenue-based costs in line with revenue performance.
The adjusted Efficiency ratio of 71.9% improved significantly by 720 basis points from the prior year, reflecting the combination of higher revenue, driven by Insurance and growth in client assets, as well as a focus on productivity.
Assets under management and administration grew by $44 billion or 10% from a year ago to $479 billion, due to market appreciation and new client assets.
Q1 2013 vs Q4 2012
Net income and adjusted net income were relatively unchanged from the fourth quarter. Adjusted net income in PCG, excluding Insurance, increased $12 million or 14%. Adjusted Insurance net income decreased $12 million or 16%, as the prior quarter's revenue included the favourable impact of the annual review of actuarial assumptions.
Revenue decreased $6 million or 1% from the prior quarter. PCG revenue, excluding Insurance, increased 2%, driven by growth in client assets as market conditions improved. Insurance revenue decreased 18% from the prior quarter, mainly due to the factors mentioned above.
Adjusted non-interest expense increased $6 million or 1%. The current quarter's results included higher stock-based compensation for employees eligible to retire that is expensed in the first quarter of each year, and lower initiative spending compared to the prior quarter.
Assets under management and administration grew by $14 billion or 3% due to market appreciation and new client assets.
Adjusted results in the foregoing PCG sections are non-GAAP amounts or non-GAAP measures. Please see the Non-GAAP Measures section.
----------------------------------------------------------------------------BMO Capital Markets Table 26----------------------------------------------------------------------------(Canadian $ in % Increase % Increase millions, except as (Decrease) (Decrease) noted) Q1-2013 Q1-2012 vs Q1-2012 Q4-2012 vs Q4-2012----------------------------------------------------------------------------Net interest income (teb) 298 290 3 271 10Non-interest revenue 606 485 25 630 (4)----------------------------------------------------------------------------Total revenue (teb) 904 775 17 901 -Provision for credit losses (15) (9) (69) (4) (+100)Non-interest expense 515 484 6 521 (1)----------------------------------------------------------------------------Income before income taxes 404 300 35 384 5Provision for income taxes (teb) 94 76 26 70 36----------------------------------------------------------------------------Reported net income 310 224 38 314 (2)--------------------------------------------------------------------------------------------------------------------------------------------------------Adjusted net income 310 224 38 315 (2)----------------------------------------------------------------------------Trading Products revenue 538 514 5 585 (8)Investment and Corporate Banking revenue 366 261 40 316 16Return on equity (%) 21.3 19.8 1.5 27.2 (5.9)Operating leverage (%) 10.3 (18.4) nm 22.8 nmEfficiency ratio (%) (teb) 56.9 62.4 (5.5) 57.8 (0.9)Net interest margin on earning assets (%) (teb) 0.59 0.62 (0.03) 0.55 0.04Average earning assets ($ billions) 201 186 8 196 2----------------------------------------------------------------------------U.S. Select Financial Data (US$ in millions, except as noted)Total revenue (teb) 290 247 17 265 9Non-interest expense 212 201 6 221 (4)Reported net income 84 41 +100 29 +100Average earning assets (US$ billions) 74 69 7 73 1--------------------------------------------------------------------------------------------------------------------------------------------------------Adjusted results in this table are non-GAAP amounts or non-GAAP measures.Please see the Non-GAAP Measures section.nm - not meaningful
