Remarks by Mr. Russel C. Robertson, Interim Chief Financial Officer, BMO Financial Group, at the Annual Meeting of Shareholders

St. John’s, Newfoundland and Labrador, March 3, 2009

(Please check against delivery)

Slide – Title Slide
Thank you very much Mr. Chairman and good morning everyone.

I echo the Chairman and CEO in saying what a pleasure it is to be here in St. John’s and to have the opportunity to meet so many shareholders, customers and colleagues.

This morning, I’m going to report on the financial performance of our company in fiscal 2008 and the first quarter of fiscal 2009.

Before I begin, as some of my comments may be forward-looking, I would like to draw your attention to the caution regarding forward-looking statements.

Slide – Non-GAAP Measures
In addition, we use certain non-GAAP measures to assess performance. Accordingly we also provide this caution that some measures do not have standardized meanings under GAAP.

Slide – Fiscal 2008
In a challenging year to say the least where a number of global financial institutions reported staggering losses or simply disappeared, BMO’s financial results in fiscal 2008 are a testament to our strength and stability.

Slide – Fiscal 2008 Strength and Stability
While we are not immune to the difficulties of the global banking environment, our focus on core operations and serving our customers resulted in a solid financial performance, where we generated net income of almost $2.0 billion, earnings per share of $3.76 and a return on equity of 13%.

From a capital perspective, we ended the year with a strong Tier 1 Capital Ratio of 9.77%, a key measure of strength and stability.

Slide – Fiscal 2008 Income Statement
Looking at a snapshot of our income statement, revenue increased to a record $10.2 billion net of approximately $600 million of capital market environment charges. The provision for credit losses was much higher than the prior year reflecting much weaker credit market conditions. The higher non interest expense reflects the addition of front-line staff and business initiatives including acquisitions.

Slide – Fiscal 2008 Group Net Income
The next slide shows the groups financial performance for fiscal 2008…..

• Personal and Commercial Banking Canada earned $1.3B in fiscal 2008, with higher revenues and earnings in each successive quarter. Revenue grew in our personal, commercial and cards businesses in 2008 versus 2007 and overall revenue growth strengthened as the year went on.
• Personal and Commercial Banking U.S. earned net income of $95 million US by growing revenues and effectively managing costs. Results were affected by the cost of carrying higher non performing loans due to the weak credit environment. We are prudently investing for the future and taking advantage of disruption in the marketplace by expanding our commercial salesforce and growing the number of commercial mid-market clients. During 2008 we successfully integrated our two Wisconsin acquisitions.
• Private Client Group earned $395 million in the face of a difficult operating environment. During the year we expanded our sales force, invested in technology and expanded our asset management capabilities by completing the acquisition of Pyrford International in the United Kingdom.
• BMO Capital Markets earned $692 million for the year. Results reflect the diversified nature of the group as trading and interest rate sensitive businesses have been able to take advantage of market volatility.
• Corporate Services recorded a loss of $525 million in the year due primarily to an increase in the bank’s provisions for credit losses.

Slide – Operating Groups
Looking at the operating groups revenue over the last three years, there is a very encouraging trend. Overall revenue is up in the operating groups reflecting the results of our customer focused strategy as well as acquisitions.

Slide – Financial Results Q109
Turning to our Q1 09 financial results released earlier this morning…

Slide – Q1 2009 Financial Results
Net income was $225 million for the quarter or $0.39 per share compared with net income of $255 million or $0.47 in the prior year.

Our Tier 1 capital ratio at the end of Q1 was a very strong 10.21%, up from 9.77% at the end of last year. We were active in the market this quarter, with a $1B common share issue, $450 million innovative equity issue and a $150 million preferred share issue. The actions taken through the first quarter contributed to BMO’s strong capital and liquidity position; the majority of our estimated 2009 funding requirements have already been met.

Slide – Q1 2009 Income Statement
We continue to operate in challenging market conditions and we continue to deliver solid results in our core businesses while absorbing higher loan losses and capital market charges. Looking at the income statement for the quarter, revenue was $2.4 billion, up approximately $400 million or 20% year over year.

Our provisions for credit losses were $428 million this quarter and reflect the continued impact of the weak real estate market in the United States and global recessionary pressures. Our loan book is comprised largely of more stable consumer and commercial based loans. Our Risk Management team continues to actively monitor all of our lending portfolios during these challenging times.

Expenses for the quarter were $1.84 billion, up $227 million from the prior year. This increase primarily reflects a stronger U.S. dollar and the impact of acquisitions closed during 2008.

Slide – Focus on Managing Expenses in Current Environment
We are carefully managing our expenses in this environment. All of our groups have done a thorough review of their expenses and are working toward aggressively managing costs without sacrificing our strategic priorities. As you can see on a run rate basis, expenses are down quarter over quarter and we are working hard to continue to reduce expenses.

Slide – Q1 2009 Group Net Income
Looking specifically at the groups financial performance, the operating groups performed well, a reflection of our customer focused strategy.

P&C Canada net income of $325 million was up 12% from a year ago. Year over year revenue was up in all 3 of our lines of business Personal, Commercial and Cards, our market share has continued to increase in priority areas and as Bill mentioned, our loyalty scores have improved. We continue to lend to qualified borrowers and have grown both personal and commercial loan portfolios.

Net income in P&C US was $27 million US up 3.4% over the prior year. Revenue and expenses were up reflecting the Wisconsin acquisitions. Deposits and loans grew, in part due to the acquisitions, but also due to Harris’ proven track record as a strong and stable bank.

Private Client Group net income was $57 million, down $39 million from a very strong first quarter last year. Results were affected by reduced levels of managed and administered assets due primarily to the significant decline in equity markets.

BMO Capital Markets reported net income of $179 million, compared to a loss in the first quarter of 2008. There was strong performance with strength in equity and foreign exchange trading, and in our corporate banking and interest-rate sensitive businesses. Equity underwriting performed well in the quarter as we participated in a number of new issuances.

Corporate Services incurred a net loss in the quarter of $370 million with approximately one-half due to provisions for credit losses allocated to the group and the remaining half due to lower revenues due to the cost of funding and hedging activities.

Slide – Strong Capital Base and Core Earnings Power
In closing, I’d like to leave you with several key messages about your company and how we are managing in this environment. We are managing expenses aggressively. We have a strong liquidity position and our capital position is very strong.

On a personal note, I would like to specifically thank Bill, Tom Flynn and the entire management committee for their support and perspective over the past year. It has been a privilege to work with such a professional management group.

Slide – Investor Relations
Thank you for your time, I will turn the podium back to the Chairman.

*****