BMO Financial Group reported net income of $4.8 billion for the second quarter of 2022, which ran from February 1 to April 30. Income ballooned by 265 per cent or $3.4 billion from $1.3 billion in Q2 2022.
Wealth Management and Insurance
Of BMO’s five businesses, three advanced and two declined, including BMO Wealth Management.
Wealth Management reported net income of $314 million in Q2 2022, compared with $322 million in Q2 2021. This represents a downturn of 2.5 per cent or $8 million.
BMO Wealth Management is made up of two sub-segments: Traditional Wealth and Insurance. One fared much better than the other.
In its Traditional Wealth management and insurance business, BMO reported net income of $247 million in the second quarter of 2022, compared with $266 million in Q2 2021. This amounts to a decrease of 7.1 per cent or $19 million.
In contrast, in its Insurance business BMO reported net income of $67 million in the second quarter of 2022, versus $56 million in Q2 2021. This increase of 19.6 per cent or $11 million is “due to more favourable market movements in the current quarter.”
BMO Wealth Management revenue, net of claims, commissions and changes in policy benefit liabilities (CCPB), was $1.3 billion in the second quarter of 2022 in both lines of business combined, down from $1.4 billion in Q2. The decline amounts to 7.5 per cent or $105 million.
Looking at the results in closer detail:
- Traditional Wealth revenue, net of CCPB, was $1.2 billion in Q2 2022, compared with $1.3 billion in Q2 2021. Revenue decreased 9.1 per cent or $117 million, “with good underlying revenue growth of 5 per cent, driven by higher net interest income from strong deposit and loan growth, and higher average client assets, more than offset by the impact of divestitures and elevated online brokerage transaction revenue in the prior year.”
- Insurance revenue, net of CCPB, was $117 million in Q2 2022, versus $105 million in Q2 2021. This increase of 11.4 per cent or $12 million “is primarily due to more favourable market movements relative to the prior year.”