BMO Capital Markets Reported net income of $255 million and adjusted net income of $262 million compared with $271 million on both a reported and an adjusted basis in the prior year. Adjusted net income excludes amortization of acquisition-related intangible assets and acquisition integration costs in the current quarter. Higher Investment and Corporate Banking revenue was more than offset by higher expenses and provisions for credit losses, and lower Trading Products revenue.
BMO Capital Markets was a lead manager in the largest-ever Sovereign, Supranational Agency bond issue of $1.5 billion in the Canadian market with the World Bank's Sustainable Development Bond, which raised awareness for the benefits of investing in health and nutrition of women, children and adolescents around the world.
Corporate Services Corporate Services reported and adjusted net loss of $75 million for the quarter compared with a reported net loss of $520 million and an adjusted net loss of $92 million in the prior year. Adjusted results in the prior year exclude a one-time non-cash charge due to the revaluation of our U.S. net deferred tax asset of $425 million.
Adjusted results in this Operating Segment Overview section are non-GAAP amounts or non-GAAP measures. Please see the Non-GAAP Measures section.
Capital BMO's Common Equity Tier 1 (CET1) Ratio was 11.4%at January 31, 2019. The CET1 Ratio increased from 11.3%at the end of the fourth quarter as retained earnings growth, higher accumulated other comprehensive income from unrealized gains on securities and other smaller items, more than offset strong business growth, impacts from regulatory changes and share repurchases during the quarter.
Provision for Credit Losses Total provision for credit losses was $137million, a decrease of $4million from the prior year. The provision for credit losses on impaired loans of $127 million decreased $47 million from $174 million in the prior year, primarily due to lower provisions in the U.S. P&C business, in part due to a recovery in the current quarter. There was a $10 million provision for credit losses on performing loans in the quarter, compared with a recovery of credit losses of $33 million in the prior year.
Caution The foregoing sections contain forward-looking statements. Please see the Caution Regarding Forward-Looking Statements.
Regulatory Filings Our continuous disclosure materials, including our interim filings, annual Management's Discussion and Analysis and audited consolidated financial statements, Annual Information Form and Notice of Annual Meeting of Shareholders and Proxy Circular are available on our website athttp://www.bmo.com/investorrelations, on the Canadian Securities Administrators' website at http://www.sedar.com and on the EDGAR section of the SEC's website athttp://www.sec.gov.
Bank of Montreal uses a unified branding approach that links all of the organization's member companies. Bank of Montreal, together with its subsidiaries, is known as BMO Financial Group. As such, in this document, the names BMO and BMO Financial Group mean Bank of Montreal, together with its subsidiaries.
Non-GAAP Measures
Results and measures in this document are presented on a GAAP basis. Unless otherwise indicated, all amounts are in Canadian dollars, and have been derived from financial statements prepared in accordance with International Financial Reporting Standards (IFRS). References to GAAP mean IFRS. They are also presented on an adjusted basis that excludes the impact of certain items as set out in the table below. Results and measures that exclude the impact of Canadian/U.S. dollar exchange rate movements on our U.S. segment are non-GAAP measures (please see the Foreign Exchange section for a discussion of the effects of changes in exchange rates on our results). Management assesses performance on a reported basis and on an adjusted basis and considers both to be useful in assessing underlying ongoing business performance. Presenting results on both bases provides readers with a better understanding of how management assesses results. It also permits readers to assess the impact of certain specified items on results for the periods presented, and to better assess results excluding those items that may not be reflective of ongoing results. As such, the presentation may facilitate readers' analysis of trends.Except as otherwise noted, management's discussion of changes in reported results in this document applies equally to changes in corresponding adjusted results. Adjusted results and measures are non-GAAP and as such do not have standardized meaning under GAAP. They are unlikely to be comparable to similar measures presented by other companies and should not be viewed in isolation from, or as a substitute for, GAAP results.
Non-GAAP Measures
(Canadian $ in millions, except as noted) Q1-2019 Q4-2018 Q1-2018 Reported Results Revenue 6,517 5,893 5,638 Insurance claims, commissions and changes in policy benefit liabilities (CCPB) (926) (390) (361) Revenue, net of CCPB 5,591 5,503 5,277 Total provision for credit losses (137) (175) (141) Non-interest expense (3,557) (3,193) (3,400) Income before income taxes 1,897 2,135 1,736 Provision for income taxes (387) (438) (763) Net income 1,510 1,697 973 EPS ($) 2.28 2.58 1.43 Adjusting Items (Pre-tax) (1) Acquisition integration costs (2) (6) (18) (4) Amortization of acquisition-related intangible assets (3) (31) (31) (28) Benefit from the remeasurement of an employee benefit liability (4) - 277 - Adjusting items included in reported pre-tax income (37) 228 (32) Adjusting Items (After tax) (1) Acquisition integration costs (2) (4) (13) (3) Amortization of acquisition-related intangible assets (3) (24) (24) (21) Benefit from the remeasurement of an employee benefit liability (4) - 203 - U.S. net deferred tax asset revaluation (5) - - (425) Adjusting items included in reported net income after tax (28) 166 (449) Impact on EPS ($) (0.04) 0.26 (0.69) Adjusted Results Revenue 6,517 5,893 5,638 Insurance claims, commissions and changes in policy benefit liabilities (CCPB) (926) (390) (361) Revenue, net of CCPB 5,591 5,503 5,277 Total provision for credit losses (137) (175) (141) Non-interest expense (3,520) (3,421) (3,368) Income before income taxes 1,934 1,907 1,768 Provision for income taxes (396) (376) (346) Net income 1,538 1,531 1,422 EPS ($) 2.32 2.32 2.12
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