BMO Financial Group Releases Supplementary Financial Information Reflecting Changes in Presentation

TORONTO, Jan. 29, 2024 /PRNewswire/ - BMO Financial Group (TSX: BMO) (NYSE: BMO) today released an abridged Supplementary Financial Information package containing certain quarterly and annual financial information for fiscal 2023 and 2022 that reflect changes in presentation that were adopted as of November 1, 2023, including those related to changes in International Financial Reporting Standard 17, Insurance Contracts (IFRS 17) which replaces existing IFRS 4, Insurance Contracts (IFRS 4). 

As disclosed in BMO's 2023 Consolidated Financial Statements, upon transition to IFRS 17, we applied the full retrospective approach to our creditor business and the fair value approach to all other products written prior to November 1, 2022. In addition, we voluntarily changed our accounting policy for the measurement of investment properties under IAS 40 Investment Property, recorded in insurance-related assets in other assets in our Consolidated Balance Sheet, from cost to fair value and applied the change retrospectively. Fiscal 2023 periods and opening retained earnings as at November 1, 2022 have been restated for these changes. The expected impact of these combined changes is a reduction in opening retained earnings as at November 1, 2022 of $974 million after-tax. Fiscal 2023 restated results may not be fully representative of our future earnings profile, as we were not managing our insurance portfolios under the new standards.

In addition, we have reflected the following reclassifications, which do not impact the banks' fiscal 2022 and 2023 reported and adjusted net income:

Effective the first quarter of 2024, we voluntarily changed our accounting policy for securities transactions from settlement date to trade date. This change was applied retrospectively, as if we always recorded securities transactions on trade date. As a result, certain prior period balances and ratios have been reclassified to conform with the current period's methodology. 

Certain changes related to the realignment of business units and changes in group allocations effective the first quarter of 2024 have also been reflected. We have included the reclassification of balances and the associated revenue, expenses and provision for credit losses related to our Canadian and U.S. indirect retail auto financing business, previously reported in Personal and Commercial Banking, to Corporate Services, reflecting the exit and wind-down of this business unit. We have also reflected the allocation of certain items from Corporate Services to the Operating Groups. Prior period results and ratios have been reclassified to conform with the current period's presentation.

The Supplementary Financial Information is available for download at https://www.bmo.com/main/about-bmo/banking/investor-relations/financial-information#2023.

The pre-quarter-end release of this abridged package has been provided to help readers of the Bank's financial information better understand how these changes will be reported. The Supplementary Financial Information package for the first quarter of 2024 may reflect further refinements.

BMO Financial Group reports first quarter earnings on February 27, 2024.

Bank of Montreal's public communications often include written or oral forward-looking statements. Statements of this type are included in this document, and may be included in other filings with Canadian securities regulators or the U.S. Securities and Exchange Commission, or in other communications. All such statements are made pursuant to the "safe harbor" provisions of, and are intended to be forward-looking statements under, the United States Private Securities Litigation Reform Act of 1995 and any applicable Canadian securities legislation. Forward-looking statements in this document may include, but are not limited to, statements with respect to the impact of the adoption of IFRS 17, Insurance Contracts and IAS 40 Investment Property and related changes to BMO's Supplementary Financial Information package. Forward-looking statements are typically identified by words such as "will", "expect", "may", "might" or negative or grammatical variations thereof.

By their nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties, both general and specific in nature. There is significant risk that predictions, forecasts, conclusions or projections will not prove to be accurate, that our assumptions may not be correct, and that actual results may differ materially from such predictions, forecasts, conclusions or projections. We caution readers of this document not to place undue reliance on our forward-looking statements, as a number of factors – many of which are beyond our control and the effects of which can be difficult to predict – could cause actual future results, conditions, actions or events to differ materially from the expectations or intentions expressed in the forward-looking statements.

The future outcomes that relate to forward-looking statements may be influenced by many factors, including, but not limited to: the interpretation and application of IFRS 17, Insurance Contracts and IAS 40 Investment Property; critical accounting estimates and judgments, and the effects of changes to accounting standards, rules and interpretations on these estimates; and our ability to anticipate and effectively manage risks arising from all of the foregoing factors.

We caution that the foregoing list is not exhaustive of all possible factors. Other factors and risks could adversely affect our results. For more information, please refer to the discussion in the Risks That May Affect Future Results section, and the sections related to credit and counterparty, market, insurance, liquidity and funding, operational non-financial, legal and regulatory, strategic, environmental and social, and reputation risk in the Enterprise-Wide Risk Management section, as updated by quarterly reports, all of which outline certain key factors and risks that may affect our future results. Investors and others should carefully consider these factors and risks, as well as other uncertainties and potential events, and the inherent uncertainty of forward-looking statements. We do not undertake to update any forward-looking statements, whether written or oral, that may be made from time to time by the organization or on its behalf, except as required by law. The forward-looking information contained in this document is presented for the purpose of assisting shareholders and analysts in understanding our financial position as at and for the periods ended on the dates presented, as well as our strategic priorities and objectives, and may not be appropriate for other purposes.

BMO Financial Group is the eighth largest bank in North America by assets, with total assets of $1.3 trillion as of October 31, 2023. Serving customers for 200 years and counting, BMO is a diverse team of highly engaged employees providing a broad range of personal and commercial banking, wealth management, global markets and investment banking products and services to over 13 million customers across Canada, the United States, and in select markets globally. Driven by a single purpose, to Boldly Grow the Good in business and life, BMO is committed to driving positive change in the world, and making progress for a thriving economy, sustainable future, and inclusive society.

Web: www.bmo.com    Twitter: @BMOmedia 

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SOURCE BMO Financial Group