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MONTREAL, April 9, 2003 – BMO Financial Group will continue to build on its North American advantages, Chairman and CEO Tony Comper said today in a presentation to the National Bank Financial Canadian Bank CEO Conference.
He reaffirmed BMO's transnational strategy of investing in its core Canadian franchise, while expanding in the United States. As an example, Comper pointed to the Investment Banking Group's recent agreement to acquire New York-based Gerard Klauer Mattison, BMO's eleventh U.S. acquisition since 1999.
Comper highlighted the organization's continuing solid performance, particularly in personal and commercial banking (P&C) on both sides of the border.
"Our Canadian and U.S. personal and commercial operations drove first-quarter growth," he said. "We outperformed our Canadian peers in revenue growth and balance sheet growth, in both loans and deposits. We believe these core businesses will support continued solid performance for BMO as our more market-sensitive businesses await the lift that will come with a sustained market turnaround."
BMO has led its Canadian peer group in P&C revenue growth for the past two quarters, while implementing an aggressive yet disciplined strategy designed to drive revenues higher. Notable ongoing competitive advantages include BMO's top-tier credit quality and small business banking, where the organization continues to close in on its target to be number one in market share for loans up to $5 million in Canada.
"The growth story is even more positive in U.S. retail and business banking," said Comper. "With major U.S. banks now targeting Chicagoland, our competitive advantages include the well-entrenched, very well located Harris distribution network and the excellent reputation of the Harris brand in the local market. Expansion plans are well under way to add 50 branches to Harris Bank's 145-branch distribution network."
Comper also provided what he referred to as an "apples-to-apples" comparison with the competition to show a more complete picture of BMO's retail and business banking operations in the U.S., by combining the organization's Chicagoland banking and Harris Nesbitt mid-market operations.
"The addition of our Harris Nesbitt mid-market lending and cash management businesses to the Chicagoland numbers would, in effect, triple net income from our U.S. retail and business banking results for 2002, while the productivity ratio improves to about 60 per cent from 77.7 per cent. From this perspective, U.S. net income from retail and business banking in 2002 increases to about 60 per cent from about 20 per cent," he said.
In response to an announcement last week that a Canadian competitor was taking a large goodwill write-down, Comper clarified BMO's position on the level of goodwill carried by the organization.
"We are comfortable with the level of goodwill on our books. We review goodwill on a regular basis for each reporting unit, and the book value remains appropriate as it is exceeded by market value," said Comper. "Also, as markets weakened following some acquisitions, we revised our business model to achieve greater cost efficiencies and believe we are well positioned for growth when conditions improve."
Established in 1817 as Bank of Montreal, BMO Financial Group (NYSE, TSX: BMO) is a highly diversified financial services organization. With average assets of $259 billion as at January 31, 2003 and more than 34,000 employees, BMO provides a broad range of retail banking, wealth management and investment banking products and solutions.
BMO Financial Group serves clients across Canada and the United States through its Canadian retail arm BMO Bank of Montreal, Chicago-based Harris Bank, a major U.S. mid-west financial services organization which also has wealth management offices across the United States, and BMO Nesbitt Burns, one of Canada's leading full-service investment firms.
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