Our Enduring Strengths

At the end of 2005, the five-year annual Total Shareholder Return on BMO common shares was 13.8%.

BMO has a proven ability to deliver strong returns at acceptable levels of risk. Our philosophy is to manage risk in a way that is disciplined and consistent – an approach that works for our business and our clients in both good times and bad.

Our commercial business is a growth engine for BMO in both Canada and the United States. Particularly, we view our ability to serve our customers on both sides of the border as a unique advantage.

Our core established business in Canada, focused on meeting the banking, investment and insurance needs of individual Canadians and businesses, is the financial backbone of BMO Financial Group.

Harris is one of the top three banks serving the Chicagoland area. Our strong personal and commercial presence in the U.S. Midwest continues to distinguish us as the Canadian leader in U.S. banking.

BMO has a history of delivering innovative technology solutions to provide consistent, reliable and secure financial services that our customers trust. We are recognized for adopting best practices and achieving the highest standards for our products and services.

Productivity improvement is an important measure of BMO’s long-term financial health. Our strategy is to continue making progress in containing costs while at the same time investing strategically to boost revenues.

Our people understand the importance of customer loyalty. They understand that it is their job to make BMO the only bank our customers will ever need.

BMO continues to be a recognized leader in corporate governance. We were named Best Corporate Citizen for 2005 by Corporate Knights and received a #1 ranking in Canadian Business magazine’s annual corporate governance survey.

Our vision is to be the top-performing financial services company in North America.

Strategy		Core Values
Our strategy is to grow our core Canadian businesses and accelerate our expansion in the United States. For a more detailed description of our strategy, please see the Enterprise-Wide Strategy section of the MD&A.		We pursue our vision and realize our strategy through our steadfast commitment to our core values: We care about our customers, shareholders, communities and each other. We draw our strength from the diversity of our people and our businesses. We insist upon respect for everyone and encourage all to have a voice. We keep our promises and stand accountable for our every action. We share information, learn and innovate to create consistently superior customer experiences.

2005 Targets	2005 Performance		Targets for 2006
3% to 8% EPS growth from a base of $4.21 (excluding changes in the general allowance)		9.0% to $4.59 See Value Measures section of the MD&A	5% to 10% EPS growth from a base of $4.59 (excluding changes in the general allowance)
ROE of 17% to 18%		18.8% See Value Measures section of the MD&A	ROE of 17% to 19%
Specific provision for credit losses of $400 million or less		$219 million See 2005 Financial Performance Review section of MD&A	Specific provision for credit losses of $400 million or less
Tier 1 Capital Ratio of at least 8.0%		10.25% See Financial Condition Review section of MD&A	Tier 1 Capital Ratio of at least 8.0%
Improve cash productivity ratio by 150 to 200 bps		120 bps improvement See 2005 Financial Performance Review section of MD&A	Improve cash productivity ratio by 100 to 150 bps

Strategic Priorities See Enterprise-Wide Strategy section of MD&A
Achieve financial targets with a particular focus on revenue growth to improve productivity. See CEO’s Message, CFO’s Financial Review and Who We Are section of MD&A
Drive revenue growth by providing a superior client experience, earning a larger share of customers’ business. See CEO’s Message and CFO’s Financial Review
Continue to improve U.S. performance. See CEO’s Message and Review of Operating Group Performance section of MD&A
Accelerate growth in the United States both organically and through acquisitions. See CEO’s Message and Review of Operating Group Performance section of MD&A
Grow net income in Canada through operational efficiency and improved market share, accelerating our growth in commercial banking and wealth management. See CFO’s Financial Review and Review of Operating Group Performance section of MD&A
Build a high-performance organization by developing our people, living our values and being an employer of choice. See Employees and Enterprise-Wide Strategy section of the MD&A.
Maintain our world-class foundation of leading governance, sound risk management, productive systems and excellent after-sales service. See Credit Risk Management, Corporate Governance and Enterprise-Wide Risk Management section of MD&A

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