BMO Annual Report 2004

BMO’s Canadian personal and commercial deposits continued to show good growth, increasing 9.1% in 2004 to $40.7 billion.

BMO InvestorLine again earned the top position in The Globe and Mail’s annual ranking of online brokers.

For the 24th consecutive year, our BMO Nesbitt Burns Research Group was recognized as the top overall equity research team by Brendan Wood International. Its 2004 survey was the most extensive ever, based on evaluations by more than 250 of Canada’s largest institutional investors.

In Good Times and Bad BMO Bank of Montreal has a strong reputation for standing by our customers in difficult times. In 2004, we extended our Bovine Spongiform Encephalopathy (BSE) Disaster Assistance Program for customers who continue to be affected by the ongoing crisis. Launched in 2003, the program is designed to help affected beef and agricultural businesses with their ongoing financial needs through a combination of payment deferrals, interest rate reductions and application fee waivers.

Meeting Customer Needs In 2004, our Canadian personal and commercial group moved closer to the goal of being the only financial services provider our customers will ever need.

The year’s advances included the first release of BMO Connect, a multi-year program that will enhance our front-line capabilities with its fully integrated, end-to-end sales and service processes and tools – enabling client-facing and client-supporting staff to initiate, manage and track sales opportunities, referrals and customer service requests across locations and channels. BMO Connect greatly improves our ability to provide our customers with consistently superior banking experiences, no matter which channel they choose.

We are already seeing the benefits of introducing automated workflow capabilities linking sales, service and support staff. We are able to provide same-day responses to many customer service requests, for example, that would often have taken more than a week to complete. The new system will free up more time for responses to other customer needs.

The Business of Relationships We understand that our business customers have highly specialized needs, and our strategy is to make sure they are each offered a tailored approach to achieving their goals. For example, self-employed business owners now have a better way to finance their home purchases with the launch of BMO Bank of Montreal’s Self-employed Homeowner Mortgage program. This new product allows customers whose incomes are based on commissions or self-employment to secure a mortgage primarily on the strength of their personal credit rating and overall financial situation, with less emphasis on their business financial statements.

Mosaik^®MasterCard^®2 Rewards Customers Faster The new Gold WestJet 1/$15 Air Miles^®3 Reward Option from Mosaik MasterCard partners BMO Bank of Montreal, the Air Miles Reward Program and WestJet. This new partnership provides personal and business cardholders with exclusive rewards – one Air Miles reward mile for every $15 spent – plus exclusive Air Miles savings when reward miles are redeemed for WestJet^®4 flights.

Convenience, Flexibility and Security at Home We have introduced a new line of credit that provides homeowners with a convenient “one-stop-shopping” approach to borrowing. BMO Bank of Montreal Homeowner ReadiLine™ allows homeowners access to up to 75% of the value of their home to finance their personal borrowing needs. Whether customers are looking to renovate, finance a child’s education, purchase a vacation property or borrow to make an investment, this new product combines the convenience and flexibility of a line of credit with the security and interest rates of a conventional mortgage.

Faster, Better Online Banking In 2004, we redesigned the BMO Bank of Montreal online banking web site to make the online banking experience easier and faster for all customers. The new site allows customers to track all their financial transactions and find information on products, services and rates – all through one convenient menu. Other enhancements include easily accessible and secure request forms for online mortgage, loan and credit card applications, integration of investment information, and better links between customers’ bank cards and their accounts.

Best Private Bank in Canada BMO Harris Private Banking, which serves the needs of high net worth individuals and families, was named the best private bank in Canada by Euromoney Magazine, one of Europe’s leading sources of information on international banking. The ranking recognizes BMO Harris Private Banking’s commitment to providing seamless North American delivery of integrated wealth management solutions, from investment management and estate and trust services to succession planning.

Top Online Brokerage Our direct investing platform has again been named the top online brokerage in leading industry surveys. For the third consecutive year BMO InvestorLine earned the top position in The Globe and Mail’s annual ranking of online brokers and was once again voted the top online brokerage in the Watchfire GómezPro ranking. In 2004, we introduced our guided investing approach to help our clients become even more successful investors. Responding to our clients’ needs through continued innovation helps keep BMO InvestorLine on top.

Advising our High Net Worth Clients BMO Nesbitt Burns, our full-service investment firm, formally established a Wealth Advisory practice for high net worth clients to provide financial planning advice for life issues such as assisting aging parents, setting up a philanthropic program or creating a business succession plan.

Six New Mutual Funds Three months after celebrating its 30th anniversary, BMO Mutual Funds announced the launch of six new funds, including a diversified mix of income, U.S. dollar and global tax advantage funds. The new selection offers added income, currency diversification, global reach and tax-efficient portfolio solutions to retail investors in Canada. In particular, the BMO Greater China Class fund provides investors with an opportunity to gain tax-advantaged exposure to one of the world’s fastest growing economies.

The Gift of Education BMO Bank of Montreal is encouraging Canadians to give children in their lives the gift of education with the launch of BMO Education Savings Gift Certificates. Available in denominations of $50, $100 or $250, the gift certificates can be invested in a new or existing Registered Education Savings Plan.

A Leader in Investment Banking Operating under the BMO Nesbitt Burns brand in Canada, we offer corporate, institutional and government clients complete financial services across the entire balance sheet. We continue to build on our Canadian leadership in the high-return fee-based businesses of mergers and acquisitions, equity and debt underwriting, and securitization. In 2004, we participated in 374 Canadian corporate debt and equity transactions that raised $61 billion, and advised on $10.6 billion of completed Canadian mergers and acquisitions.

Focus on building lasting client relationships across all our businesses to drive top-line revenue growth.
Continue to improve productivity across our organization by 150 to 200 basis points every year.
Develop and deliver new and innovative products and services in Canada.
Continue to enhance our offerings and deepen client relationships.
Continue to fine-tune our business models.

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