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Rating:Three Things to Know from BMO's Earnings Not Rated 0.0 Email Routing List Email & Route  Print Print
Thursday, February 28, 2013

Three Things to Know from BMO's Earnings

Reported by Tommy Fernandez

BMO [profile] had a year defined by solid, incremental growth fueled by ongoing steady investments in global and U.S. operations and advertising, among other things.

First, the basics. BMO reported a net income for the first quarter of 2013 of $163 million, up $59 million or 56 percent from a year ago. Revenue was $779 million, up $82 million or 12 percent from a year ago. Assets under management and administration grew by $44 billion or 10 percent from a year ago to $479 billion, due to market appreciation and new client assets. Mutual fund growth was clocked at 12.8 percent.

If you look at the recent SeekingAlpha transcript of the first quarter conference call, as well as the company earnings information, you'll note three strong takeaways.

They are:

POINT #1: BMO Remains Committed to Aggressive U.S. Growth, Via the Midwest
POINT #2: BMO Is Investing Heavily in its Global Asset Management Platform
POINT #3: BMO Is Going Bullish with the Adverts

Now to elaborate on these takeaways:

POINT #1: BMO Remains Committed to Aggressive U.S. Growth, Via the Midwest
Chief executive, president and director William Downe had this to say on the subject:
We focused our collective efforts on growing BMO's customer base and capturing opportunities in our redefined home market. And we've been highly visible in the Midwest, increasing our advertising support post-integration. Wealth management and capital markets businesses in the U.S. also had good quarters.

And we're seeing the payoff from the investments we've made in our U.S. businesses with operating levels -- with operating leverage rather, from an expanded platform.

POINT #2: BMO Continues to Invest in its Global Asset Management Platform
Downe described his company's progress in this way:
We're continuing to post strong financial results. We're making particularly good progress in 2 areas that are strategically important: institutional asset management and private banking. Consolidated under one platform, BMO Global Asset Management has traction. We continue to add new asset classes, investment capabilities and distribution in North America, Asia, Europe and the Middle East, resulting in continued net asset inflows. We've grown to more than $120 billion in AUM, earning a place in the Top 100 worldwide rankings. In Private Banking, during the quarter, we completed the acquisition of a Hong Kong and Singapore-based wealth management provider and are now operating as BMO Private Bank Asia, providing services to high net worth clients in the Asia Pacific region. With experienced private bankers and a well developed universe of products, our clients will benefit from our investment expertise and an integrated platform that bridges North American and Asian markets. And looking ahead, this corridor creates opportunities for growth. We also continue to make progress with capital markets client coverage efforts in Asia, best demonstrated by recent high-profile advisory mandates and successful transactions completed by our clients.

POINT #3: BMO Is Going Bullish with the Adverts Downe described BMO's brand initiatives in this way:
Our ongoing campaign to introduce BMO Harris Bank across our expanded U.S. footprint is driving customer recognition and producing good results.

Here are some examples of how creative brand support is resonating with customers. In Milwaukee, just a few weeks into our newest advertising campaign, brand awareness of the bank has increased significantly. In Minneapolis, frontline staff are telling us ad recognition has brought customers into branches to open new accounts. And we premiered BMO advertising at the Super Bowl with good coverage in our U.S. regional markets and across Canada.

To learn more, go to SeekingAlpha transcript of the first quarter conference call, as well as the company earnings information

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