BMO Financial wealth management arm has registered a rise in income in the fourth quarter (Q4) of 2019. However, the group profit was affected by costs associated with job cuts.
Wealth management shines
The firm’s wealth management unit has reported a net income of C$267m ($201m) for Q4 2019, a 22% jump from C$219m ($164.8m) in the same quarter last year.
The unit’s adjusted net income, which excludes the amortisation of acquisition-related intangible assets, surged 31% to C$301m from C$229m over the period.
In traditional wealth, reported net income increased 24% to C$237m from C$192m while adjusted net income soared 22% year-on-year to C$246m.
Total revenue at the wealth division remained stable at C$1.57bn.
Assets under management totalled C$471.2bn at the end of October 2019, up 8% from a year ago. The firm attributed the growth to strong equity markets.
Group performance hit by severance costs
However, at a group level, the firm’s reported net income dropped 30% to C$1.19bn from C$1.7bn.
The profit was hit by a C$357m restructuring charge mainly related to lay-offs that will affect 5% or nearly 2,300 of the firm’s employees. The firm’s current staff headcount is 45,513.
The firm did not divulge details regarding the timeline of the downsizing exercise.
Adjusted net income at the group rose 5% to C$1.61bn from C$1.53bn.
The group’s net revenue of C$6.09bn in Q4 2019 was 3% higher than the previous year.
BMO Financial Group CEO Darryl White said: “Our results for the year reflect the strength and quality of our diversified businesses. Adjusted earnings per share were $9.43, up 5% from last year. We continued to make significant progress on our strategic priorities and delivered annual earnings growth of 23% in our U.S. business.
“With a clear bank-wide focus on disciplined expense management, we continued to improve our overall efficiency ratio with 130 basis points of improvement in the past two years and good momentum throughout the year.
“We have a number of initiatives underway, including today’s announcement of a restructuring charge, that will serve to accelerate our momentum and help us meet our efficiency objectives over the long-term.”