Bank of Montreal at TD Cowen Inaugural Financial Services Summit Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Mario Mendonca - TD Coven - Analyst : Let's get started first. So not BMO's best quarter, missed estimates by a little bit. Can you offer a little bit of an outlook? How would you sort of position that quarter and your view going forward?

Question: Mario Mendonca - TD Coven - Analyst : Okay, so let's now dive into wealth management very specifically. The industry's changed a lot in the last five years and BMO's changed with it. So could you walk us through some of these big trends and how BMO's addressing those?

Question: Mario Mendonca - TD Coven - Analyst : Now, what does BMO do to address these big trends? Like how do you, I know you can't find out the strategies of your peers, but really think about BMO specifically. What's BMO doing to address these trends? What makes BMO special in wealth? Maybe you can walk us through that.

Question: Mario Mendonca - TD Coven - Analyst : So other banks have these names they assign to their individual cohorts. So BMO's got the mass affluent and the affluent. Does the affluent sit in what you call BMO Private Wealth? And then the mass affluent is BMO, BMO Wealth?

Question: Mario Mendonca - TD Coven - Analyst : That makes sense. Okay, so let's flip over a little bit now and talk about Bank of the West and how did that deal contribute to -- how did that contribute to the wealth deal? And maybe you want to combine that into a discussion of -- I know Canada and the US are combined under your leadership. Are there different -- you're a different bank in the US from Canada. So I presume there'd be some different strategies as well. So let's talk about Bank of the West, the US versus Canadian strategy, if that's doable.

Question: Mario Mendonca - TD Coven - Analyst : So that really is the bright lead in for me now into another question that you started to address, which is how do you get the folks in wealth to play nice with the folks in personal banking, commercial banking? I know from experience, the leader has to insist on it, number one. It's got on be sort of built into the culture of the bank, but there's also that has to be a sort of an incentive structure around it as well. So how do you make it work?

Question: Mario Mendonca - TD Coven - Analyst : The other thing I've noticed in paying attention to banks over the long term is, some of the really successful ones develop systems and processes that allow them to measure their success down the road and actually measure profitability at a very granular level, like client level type profitability. Where's BMO in that journey? Has BMO developed the systems? Are you building that out now?

Question: Mario Mendonca - TD Coven - Analyst : Let's flip over now and talk about money in. So you've got deposits, you've got asset, wealth management assets coming in. And let's talk about some of the recent trends, like the last couple of years relative to what you could expect now that rates have come down or rates may come down a little more. So talk about it globally as a big concept of money in, deposits and wealth in the context of a lower rate environment.

Question: Mario Mendonca - TD Coven - Analyst : Now, I don't know you wouldn't be agnostic between whether it's in a term deposit or in your AUM. Presumably, there's a difference between the two. I figure one would be a better business to be in than the other, maybe, but let me ask you, how do you view that from a margin perspective?

Question: Mario Mendonca - TD Coven - Analyst : And then presumably the center of the bank, the corporate treasury center of the bank has to cope with that change in deposit funding because it leaves the term deposit, it leaves the other deposit, but that's outside of what you focus on, right?

Question: Mario Mendonca - TD Coven - Analyst : I see. Now let's talk a little bit about the lending side. I normally don't think too much about lending when I think about wealth managing businesses or banks, but loan growth's been weak now for these banks for some time now. Do you see a slight change here with lower rates? Could we get a little bit of a lift in the lending space in wealth?

Question: Mario Mendonca - TD Coven - Analyst : That could change. That could change as rates come down, for sure. Let's conclude with insurance. Insurance is a smaller part of the business. Let's talk about how insurance, like why does it belong in the wealth segment? What products does it relate to? Are there similar customers? Let's just talk about BMO's insurance strategy overall.

Question: Mario Mendonca - TD Coven - Analyst : Thank you. I got a lot of this. I definitely, not every meeting do I walk away thinking I've learned something, I think I learned something as well.

Question: Mario Mendonca - TD Coven - Analyst : Really appreciate you taking the time, and thank you to everybody else who joined us.