Financial Results
BMO Triples Its US Wealth Presence As Net Income Rises
Net income at BMO’s Private Client Group was 14 per cent higher for the third quarter 2011 than a year earlier, reaching C$120 million ($121.4 million). The Canada-based firm closed its acquisition of Marshall & Ilsley during the quarter, significantly growing its US wealth management presence.
Excluding the insurance business, net income at the Canadian firm’s private banking and wealth management unit rose 43 per cent, to C$101 million. This includes the impact of the acquisition of both Marshall & Ilsley Corporation, which added C$4 million of earnings, and Lloyd George Management.
The M&I acquisition was completed during the third quarter, which the firm counts as ending 31 July 2011, while the LGM deal was completed on 28 April 2011.
Revenue at the Private Client Group improved by 13 per cent or C$73 million year-over-year to C$617 million. The LGM acquisition and M&I wealth businesses together added C$39 million to this division’s revenue.
Over the quarter, assets under management and administration expanded by C$177 billion to C$429 billion, with the acquisitions adding C$153 billion in client assets to the business. Assets in the US wealth business increased from $77 billion to $239 billion.
“[The Marshall & Ilsley] transaction almost triples the size of our US wealth businesses as measured by assets under management and administration, and our US private banking presence now operates from twice as many outlets,” said Bill Downe, president and chief executive, BMO Financial Group.
BMO’s exchange traded funds business, launched in June 2009, now has C$2.7 billion in assets under management in 40 funds, the firm said.
As a group, the Canadian firm reported net income of C$793 million, up 18 per cent or C$124 million from a year ago.
Across the firm, the acquisition of M&I added C$117 million of revenue to its third quarter results, and C$32 million of adjusted net income, which excludes integration and related costs.
Adjusted figures account for integration costs for the M&I deal of C$53 million (C$32 million after tax); amortization of acquisition-related intangible assets of C$17 million (C$12 million after tax); and a charge to revenue for the hedge of foreign currency risk on the purchase of M&I of C$9 million (C$6 million after tax), BMO said.
