Bank of Montreal 2013 Annual Report Download - page 29

MD&A
MANAGEMENT’S DISCUSSION AND ANALYSIS
Non-Interest Revenue ($ millions)
Change
from 2012
For the year ended October 31 2013 2012 2011 (%)
Securities commissions and fees 1,182 1,146 1,215 3
Deposit and payment service charges 916 929 834 (1)
Trading revenues 849 1,025 549 (17)
Lending fees 715 641 593 12
Card fees 724 708 689 2
Investment management and
custodial fees 726 725 496 –
Mutual fund revenues 799 647 633 23
Underwriting and advisory fees 488 442 512 10
Securities gains, other than trading 285 152 189 88
Foreign exchange, other than trading 172 153 130 12
Insurance income 445 335 283 33
Other 417 419 346 –
Total BMO reported 7,718 7,322 6,469 5
Total BMO adjusted 7,684 7,038 6,434 9
Non-Interest Revenue
Non-interest revenue, which comprises all revenues other than net
interest income, was $7,718 million in 2013, an increase of $396 million
or 5% from 2012. Adjusted non-interest revenue was $7,684 million, up
$646 million or 9%, with the majority of the growth driven by strong
performance in Wealth Management, as well as growth in BMO Capital
Markets and Canadian P&C.
Adjusted non-interest revenue excludes the income or losses
from run-off structured credit activities, which are mainly included in
trading revenues.
Mutual fund revenues increased $152 million or 23% from 2012,
driven by market appreciation and growth in new client assets.
Securities gains increased $133 million or 88% from 2012 due to a
security gain in Wealth Management, partially offset by lower invest-
ment security gains across the other operating groups.
Insurance income increased $110 million or 33%, as the prior year
was impacted by unfavourable movements in long-term interest rates,
and there was continued growth in both the underlying creditor and life
insurance businesses.
Trading revenues decreased $176 million and are discussed in the
trading-related revenues section that follows.
Lending fees increased $74 million or 12%, primarily due to strong
growth in North American P&C commercial and industrial loan portfolios
and increased lending activity in BMO Capital Markets, largely in the
United States.
Underwriting and advisory fees increased $46 million or 10% from
2012, resulting from better performance despite a weaker market.
Securities commissions and fees increased $36 million or 3%. These
revenues consist largely of brokerage commissions and fees within
Wealth Management, which account for about three-quarters of the
total, and institutional equity trading commissions within BMO Capital
Markets. In Wealth Management, securities commissions and fees were
up 10% due to growth in client assets and higher transaction volumes,
partially offset by a decline in BMO Capital Markets revenue due to
lower securities lending commissions.
Income from foreign exchange, other than trading, increased
$19 million or 12% from 2012, reflecting growth in Wealth Management
and BMO Capital Markets.
Other non-interest revenue balances were consistent with the
prior year.
Table 7 on page 108 provides further details on revenue and
revenue growth.
40 BMO Financial Group 196th Annual Report 2013