Bank of Montreal 2014 Annual Report Download - page 33

MD&A
MANAGEMENT’S DISCUSSION AND ANALYSIS
Personal and Commercial Banking
The Personal and Commercial Banking (P&C) operating group represents the sum of our two retail and business banking operating segments,
Canadian Personal and Commercial Banking (Canadian P&C) and U.S. Personal and Commercial Banking (U.S. P&C). These operating segments are
reviewed separately in the sections that follow.
(Canadian $ in millions, except as noted)
As at or for the year ended October 31
Canadian P&C U.S. P&C Total P&C
2014 2013 2012 2014 2013 2012 2014 2013 2012
Net interest income (teb) 4,772 4,526 4,467 2,488 2,327 2,405 7,260 6,853 6,872
Non-interest revenue 1,723 1,580 1,517 569 579 589 2,292 2,159 2,106
Total revenue (teb) 6,495 6,106 5,984 3,057 2,906 2,994 9,552 9,012 8,978
Provision for credit losses 541 572 613 164 223 274 705 795 887
Non-interest expense 3,260 3,126 3,043 2,005 1,869 1,915 5,265 4,995 4,958
Income before income taxes 2,694 2,408 2,328 888 814 805 3,582 3,222 3,133
Provision for income taxes (teb) 680 596 579 240 233 234 920 829 813
Reported net income 2,014 1,812 1,749 648 581 571 2,662 2,393 2,320
Amortization of acquisition-related intangible assets (1) 810 10 48 50 64 56 60 74
Adjusted net income 2,022 1,822 1,759 696 631 635 2,718 2,453 2,394
Key Performance Metrics and Drivers
Net income growth (%) 11.1 3.6 2.1 11.5 1.8 +100 11.2 3.2 17.6
Adjusted net income growth (%) 11.0 3.6 2.2 10.2 (0.5) +100 10.8 2.5 18.7
Revenue growth (%) 6.4 2.1 (3.3) 5.2 (3.0) 49.7 6.0 0.4 9.6
Non-interest expense growth (%) 4.3 2.7 (2.9) 7.2 (2.4) 55.5 5.4 0.8 13.6
Adjusted non-interest expense growth (%) 4.3 2.8 (3.0) 8.0 (1.6) 54.0 5.7 1.1 12.7
Return on equity (%) 16.7 16.9 17.8
Adjusted return on equity (%) 17.0 17.3 18.4
Operating leverage (teb) (%) 2.1 (0.6) (0.4) (2.0) (0.6) (5.8) 0.6 (0.4) (4.0)
Adjusted operating leverage (teb) (%) 2.1 (0.7) (0.3) (2.8) (1.4) (4.3) 0.3 (0.7) (3.1)
Efficiency ratio (teb) (%) 50.2 51.2 50.8 65.6 64.3 64.0 55.1 55.4 55.2
Adjusted efficiency ratio (teb) (%) 50.1 51.0 50.7 63.4 61.7 60.8 54.3 54.5 54.1
Net interest margin on average earning assets (teb) (%) 2.59 2.64 2.85 3.74 3.99 4.31 2.90 2.98 3.23
Average common equity 15,410 13,723 12,611
Average earning assets 183,947 171,285 156,723 66,565 58,369 55,857 250,512 229,654 212,580
Average current loans and acceptances 188,330 175,079 159,484 59,848 52,421 50,711 248,178 227,500 210,195
Average deposits 124,930 113,912 106,555 64,973 60,645 59,147 189,903 174,557 165,702
Assets under administration 17,486 16,148 15,521 123,082 112,732 96,803 140,568 128,880 112,324
Full-time equivalent employees 15,921 15,945 16,197 7,753 7,932 7,906 23,674 23,877 24,103
(1) Before tax amounts of: $76 million in 2014; $87 million in 2013; and $105 million in 2012 are included in non-interest expense.
Adjusted results in this section are non-GAAP and are discussed in the Non-GAAP Measures section on page 32.
44 BMO Financial Group 197th Annual Report 2014