BMO Financial Group reported net income of $1.4 billion for the third quarter of 2022, which ran from May 1 to July 31. This figure is down 40 per cent or $910 million from the $2.3 billion in net income reported in Q3 2021.
Of BMO's five businesses, two advanced and three retreated, including BMO Wealth Management.
This segment recorded net income of $324 million in Q3 2022, compared with $379 million in Q3 2021, for a decrease of 14.5 per cent or $55 million.
Both of BMO Wealth Management sub-segments declined.
In its insurance business, BMO reported net income of $61 million in the third quarter of 2022, compared with $79 million in Q3 2021.
This decrease of 22.8 per cent or $18 million is “primarily due to the impact of unfavourable market movements and a lower benefit from changes in investments to improve asset liability management in the current quarter, relative to the prior year.”
In its Traditional Wealth business, BMO reported net income of $263 million in the third quarter of 2022, versus $300 million in Q3 2021.
The Group attributes this decline of 12.3 per cent or $37 million to “higher underlying revenue growth of 3 per cent [was] more than offset by higher underlying expenses.”
BMO Wealth Management's revenue, net of claims, commissions and changes in policy benefit liabilities (CCPB), for both lines of business combined, was $1.3 billion in the third quarter of 2022, compared with $1.4 billion in Q3 2021. This result represents a decline of 10.5 per cent or $151 million.
Looking at the results in closer detail:
- Traditional Wealth revenue, net of CCPB, was $1.2 billion in the third quarter of 2022, compared with $1.3 billion in Q3 2021. To account for the decrease of 9.7 per cent or $127 million, BMO notes that “the impact of divestitures and weaker global markets were partially offset by underlying revenue growth of 3 per cent, driven by higher net interest income from strong deposit and loan growth and higher margins.”