BMO Financial Group reported net income of $2.3 billion for third quarter 2021, which covered May 1 to July 31.
This result is up 84.7 per cent or $1 billion from the $1.2 billion in net income reported in Q3 2020.
All five of BMO’s operating groups grew, including BMO Wealth Management. This segment reported net income of $401 million in third quarter 2021, up from $341 million in Q3 2020. The corresponding increase is 17.6 per cent or $60 million.
BMO Wealth Management comprises two sub-sectors: insurance and traditional wealth management, both of which reported gains:
In its wealth management business alone, BMO reported net income of $328 million in third quarter 2021, versus $271 million in Q3 2020. Income thus increased by 21 per cent or $57 million, “driven by higher revenue, primarily from growth in client assets, including stronger global markets, partially offset by higher expenses,” BMO says.
For its insurance business alone, the financial institution reported net income of $73 million in third quarter 2021, versus $70 million in Q3 2020. The increase amounts to 4.3 per cent or $3 million.
Revenue in the spotlight
BMO Wealth Management net revenue, net of claims, commissions and changes in policy benefit liabilities (CCPB), for both lines of business combined, was $1.4 billion in third quarter 2021, compared with $1.3 billion in Q3 2020, Net revenue thus climbed by 11.3 per cent or $147 million.
Both of BMO Wealth Management's sub-sectors posted revenue growth:
Wealth management revenue, net of CCPB, was $1.3 billion in third quarter 2021, compared with $1.2 billion in Q3 2020. This represents an increase of 11.2 per cent or $132 million “due to higher non-interest revenue from growth in client assets, including stronger global markets, partially offset by the impact of the weaker U.S. dollar,” BMO says.
Insurance revenue, net of CCPB, was $134 million in Q3 2021 versus $119 million in Q3 2020. This represents an increase of 12.6 per cent or $15 million “primarily due to business growth, with benefits from changes in investments to improve asset liability management largely offset by favourable market movements in the prior year.”