BMO’s net income grows as wealth management reports lower net income

BMO Financial Group reported first quarter net income of $2.93 billion on Tuesday, a 45% increase in adjusted net income compared to the same quarter last year.

The firm attributed the increase to “strong revenue growth, an increase in expenses and a recovery of the provision for credit losses.”

BMO Wealth Management, however, reported $315 million in net income for the most recent quarter, down by 6.0% from Q1 2021 and a decrease of 8.7% from Q4 2021.

Tayfun Tuzun, chief financial officer with BMO Financial Group, said on the earnings call that the decrease in the wealth management division’s net income could be attributed to “the impact of divestures,” which reduced net income growth by 3%. “Lower insurance income” was also a factor, he said.

Traditional wealth net income for this year’s first quarter was $261 million, up by 1.95% from Q1 2021, but down by roughly 9% from last quarter.

“BMO Wealth Management is key to our growth strategy and we continue to have good underlying performance in traditional wealth,” said Darryl White, CEO of BMO Financial Group. “This quarter, we completed the sale of our EMEA [Asset Management] and U.S. asset management businesses, and are well underway in repositioning wealth to grow in North America – investing in advisors and private bankers, delivering [a] best-in-class client experience.”

The wealth management arm’s assets under management fell by $186.15 billion from Q1 2021, and by $190.69 billion quarter over quarter. BMO Wealth Management’s AUM stands at $332.58 billion.

BMO as a whole reported $7.72 billion in first-quarter revenue, up by more than 10% year over year and by more than 17% compared to last quarter. Expenses increased by about 6.4% compared to Q1 2021, and by 1.1% from last quarter.

The firm also reported earnings per share of $4.43, an increase of 46% year over year, and announced a dividend of $1.33 per common share.