Bank of Montreal (NYSE:BMO) Q1 2023 Earnings Call Transcript

Nigel D’Souza: Good morning. I actually had a follow-up question along the lines of residential mortgages. When I look at your remaining amortization, the portion of mortgages with a negative amortization. So, I guess these would be fixed payment variable mortgages. For those mortgages, any portion of the increase in the multi payments being added back the outstanding balance for that mortgage?

Piyush Agrawal: Nigel, it’s Piyush. Let me begin and then maybe Ernie can chime in. So, I think overall, our performance in the mortgage book continues to be very solid. We’ve obviously looked at various internal measures, capacity analysis. And just given the strength of the Canadian customer the customer capacity to pay, we feel very good about the future. I think your question really around payments. We’ve gone back as a pre-emptive measure to several of our customers. And as part of the strong relationship, it’s not for us to tell them to pay more now. The product allows them to pay as and when they are able. Several customers have taken us up and 20% have actually put more money in. But we think that the average increase, by the time of renewal, is absolutely manageable for our customers.

And in fact, it gives them the optionality because many of them like us to do believe rates will come down. So, when it comes time for renewal, which the big slug for us is three, four years out, we should be in a very healthy position and actually builds customer loyalty. And none of those negative mortgages by the way, have hit any regulatory trigger rate. So, we feel that we are in a very good position with our customers.

Operator: We have no further questions registered at this time. I would like to turn back the meeting over to Darryl.

Darryl White: Thank you, operator, and thank you all for your questions. As you’ve heard today, we continue to have good momentum in our operations across personal and commercial banking, wealth management and capital markets. Our strong foundation, a relentless focus on execution of our dynamic plan, the addition of the Bank of the West, combined with our leading winning culture and high-performance organization further enhances our long-term growth opportunities. As I said earlier, I’ve never been more confident that guided by our purpose-driven strategy, we are uniquely positioned to deliver sustained and consistent financial performance over time. Thank you for participating in today’s call, and we look forward to speaking to you again in May.

Operator: Thank you. The conference has now ended. Please disconnect your lines at this time, and we thank you for your participation.