Solid results lay foundation for future growth
David A. Galloway, Chairman of the Board
Turning a corner
In a year when a general sense of uncertainty was pervasive, the management team at BMO continued to lay down a foundation for future growth.
In the last 12 months, BMO focused on maintaining strong levels of capitalization and a disciplined approach to risk management. In particular, management was effective in addressing our priority of managing down the various risks in the bank.
A focus on customers and growth continued to lead our strategic agenda. The intense customer focus that underlies all our strategic priorities has noticeably taken hold – right across BMO Financial Group.
Despite last year’s difficult environment, our performance has steadily improved. Our employees, led by a capable management team, delivered solid results last year – and, in some cases, very good results. Revenues improved steadily and we gained market share in key lines of business. The bank’s fiscal 2009 results were impacted by the environment, which resulted in large provisions for credit losses (related in particular to the bank’s U.S. portfolios). Although credit losses will continue to impact our business into 2010, BMO’s core businesses are positioned to perform well as the economy continues to improve.
Positive changes
For your Board of Directors, the past 12 months included areas of focus and change – as periods of uncertainty always do.
One of the key areas of focus in 2009 was executive compensation. Having conducted a thorough review of our compensation practices, we concluded that our compensation program continues to reward high performance, and does not encourage inappropriate risk-taking.
Still, such reviews identify opportunities for improvement. We have made a number of important and meaningful changes to the compensation program – notably with regard to compensation in BMO Capital Markets. These changes ensure that we continue to reward appropriate behaviours in line with shareholders’ interest, and that the process for measuring performance is transparent to our shareholders.
Looking forward
As representatives of the shareholders, our goal is always top-tier financial performance. Your board feels confident that BMO Financial Group, with its strong management team, is well positioned for growth in the years to come.
David A. Galloway
Chairman of the Board
