Toronto, August 26, 2008

 PDF format of entire Third Quarter 2008 Report to Shareholders/News Release including Financial Results Highlights, Management’s Discussion and Analysis and Unaudited Financial Statements

Canadian Retail Strategy Continues to Deliver Good Results Including Record Net Income in Private Client Group

BMO Capital Markets Reports Strong Revenue Growth

Provisions For Credit Losses, Booked in Corporate, Elevated Due to Deterioration in U.S. Real Estate

Return on Equity at 13.5% Demonstrates the Benefits of Our Diversified Businesses

Financial Results Highlights:

Third Quarter 2008 Compared with Third Quarter 2007:

• Net income of $521 million compared with $660 million in 2007
• EPS¹ of $0.98 compared with $1.28 and cash EPS² of $1.00 compared with $1.30
• Strong Tier 1 Capital Ratio, at 9.90% on a Basel II basis

Year-to-Date 2008 Compared with a Year Ago:

• Net income of $1,418 million compared with $1,679 million in 2007
• EPS of $2.70 compared with $3.24 and cash EPS of $2.75 compared with $3.29
• Return on equity of 12.7% compared with 15.1% in 2007

1 All Earnings per Share (EPS) measures in this document refer to diluted EPS unless specified otherwise.

2 The adjustments that change results under generally accepted accounting principles (GAAP) to cash results are outlined in the Non-GAAP Measures section, where all non-GAAP measures and their closest GAAP counterparts are outlined.

Toronto, August 26, 2008– For the third quarter ended July 31, 2008, BMO Financial Group reported net income of $521 million or $0.98 per share. We continue to maintain a strong Tier 1 Capital Ratio and the third quarter return on equity at 13.5% shows the underlying benefits of our diversified businesses.

“We remain focused on our strategic goals and objectives with the customer at the centre of everything we do. This is reflected in the overall results we’ve reported and our market share gains in the P&C Canada business. The impact of the deterioration in the U.S. housing market has affected our results and while uncertainty exists, we are confident in the earnings capacity of the core franchise,” said Bill Downe, President and Chief Executive Officer, BMO Financial Group.

P&C Canada, our Canadian personal and commercial banking unit, again reported good results with one of its best quarters ever. Results were down year over year but net income improved slightly after adjusting for a recovery of prior years’ income taxes in 2007, and net income was up $12 million or 3.4% from the second quarter with revenue growth of 5.9%. “We are steadily improving P&C Canada’s market share in both personal and commercial loans. Our focus on the customer is increasingly becoming entrenched in the organization and is paying off. Customer loyalty continues to improve, our customer base is growing and we are strengthening our customer relationships,” said Mr. Downe.

“Results in our U.S. personal and commercial banking group were good, with net income growing 12% year over year in source currency, driven by increased volumes, spreads and fees. Net interest margins improved from the second quarter and are showing early signs of stabilizing, an encouraging development given the margin pressures of the past. We expect to complete the bulk of the integration of the Wisconsin-based banks in the fourth quarter.

“Private Client Group delivered record net income, achieving broad-based revenue growth in a difficult market environment.

“Results in BMO Capital Markets were up year over year but continue to reflect current market conditions with low activity levels in some of our investment banking businesses. Our interest-rate-sensitive businesses performed well,” Mr. Downe added. The group’s results included after-tax charges related to the current capital markets environment and severance, as well as the benefit of a recovery of prior period income taxes. Further detail is provided in the Effects of the Capital Markets Environment on Third Quarter Results section.

“Overall, BMO’s revenue increased 7.5% year over year, reflecting growth in our businesses and the impacts of this quarter’s charges related to the capital markets environment and last year’s commodities losses. Expenses increased at a comparable rate, reflecting the impact of investments in our business, severance and low capital taxes a year ago. Managing expenses while investing in future growth will continue to be a priority,” said Mr. Downe.

Provisions for credit losses totalled $484 million including a $50 million increase in the general allowance. Specific provisions of $434 million were unusually elevated relative to the prior quarter due to the inclusion of $247 million for two corporate accounts related to the U.S. housing market that were identified as impaired in the first half of the current year. The size of the provisions for these two exposures reflects the weakness in the U.S. residential real estate market and the specific nature of the underlying loans. Excluding the provisions taken on these two accounts, specific provisions were $187 million in the quarter.

The effective tax rate in the quarter was a recovery of 12.2%, and included the benefit of $95 million of recoveries of prior period income taxes.

Operating Segment Overview
P&C Canada
Net income was $343 million, down $13 million or 3.2% from a year ago. Results a year ago included a $14 million recovery of prior period income taxes. This quarter’s results represented one of our best ever quarters, increasing $12 million or 3.4% from the second quarter.

Revenue rose $35 million or 3.0% year over year. Volume growth continued to be strong in the face of a slowing economy. There were improved revenues in personal banking and cards and payment services, with a small decline in commercial banking due to high recoveries of interest on loans a year ago. Net interest margin was down year over year but increased slightly from the second quarter, due in part to favourable product mix changes.

Expenses increased $46 million or 6.8% from a year ago due to increased strategic initiative spending and higher capital taxes. We are continuing to invest in the business through the expansion and renovation of our branch network, as well as increasing our mortgage specialist and financial planner workforce. Year to date, we have opened 7 new branches, relocated 4 and expanded 6. Our customers continue to report an improved customer experience as a result of the initiatives we are focusing on.

In personal banking, there continues to be growth in most products. Our personal loan growth was a strong 19% year over year with market share increasing 87 basis points from the prior year and 29 basis points from the second quarter. Our HomeOwner Readiline is an important contributor to our accelerating personal loan growth. We saw growth in our mortgage portfolio again this quarter as new originations outpaced the impact of exiting from the broker mortgage channels. Personal deposit balances were up slightly from a year ago and the second quarter, with the number of active chequing account customers continuing to rise and the number of products per household showing positive trends. Personal deposits market share was down 10 basis points from a year ago and 6 basis points from the second quarter as competition remains intense.

In commercial banking, loans continue to grow strongly, rising 9.3% from a year ago, despite ongoing intense competition. Market share of business banking improved 69 basis points from the prior year and 29 basis points from the second quarter. BMO ranks second in Canadian business banking market share at 19.89% and our objective is to be the market leader. In the deposit category, year-over-year balance growth of 4.5% was accompanied by steady growth in commercial operating deposit customers.

Cards and payment services revenues grew 10% year over year, driven by transactions and accelerating balance growth as well as higher revenues from Moneris, our joint investment with another bank and one of North America’s leading processors of debit and credit payment transactions. Our most recent AIR MILES and Cashback rewards offers have broad appeal to customers which, combined with our pricing and credit strategies, have continued to drive strong balance growth in a highly competitive environment.

P&C U.S.
Net income was US$28 million, up US$4 million or 12% from a year ago. There was solid volume growth and early signs of spread stabilization in both loans and deposits in both the personal and commercial segments. Although net interest margin was down from a year ago, it was up appreciably from the second quarter. Revenue was up US$35 million or 16%, with the Wisconsin acquisitions contributing a little more than half of the growth and the balance attributable to core revenue improvements. We incurred US$3 million of acquisition integration costs in the third quarter and anticipate integration costs increasing to approximately US$16-US$18 million in the fourth quarter when we expect to complete the bulk of the integration.

Results were down slightly from the second quarter, which included a net US$13 million after-tax benefit related to the Visa Inc. IPO proceeds less an associated litigation reserve as well as higher than normal expenses and reduced revenues. Core results were stronger than in the second quarter with improved volumes, spreads and fees. Results were affected by the more difficult credit environment with an impact on both revenue and expense but the effect was less pronounced in the third quarter than in the second quarter as a result of cash collections.

Results include a full quarter of revenue and expense of Wisconsin-based Merchants and Manufacturers Bancorporation Inc. and Ozaukee Bank following the successful closing of these transactions in the second quarter, which reflected one month of their results.

Private Client Group
Net income was $110 million, up $8 million or 8.4% from a year ago, marking a record quarter, notwithstanding the more difficult operating environment.

Revenue rose $24 million or 4.8%. There was growth in a number of our businesses with increased fee-based revenue in Full-Service Investing and higher trust and investment revenue in North American Private Banking. There were higher deposit balances in brokerage businesses and higher loan and deposit balances in North American Private Banking.

Assets under management and administration and term deposits have been affected by softer market conditions, but increased $4.2 billion or 1.5%, excluding the impact of foreign exchange.

BMO Capital Markets
Net income of $259 million increased $65 million or 34% from a year ago. Results for the quarter were lowered by the net $33 million impact of: capital markets environment charges of $96 million after tax, a severance charge of $19 million after tax and the group’s $82 million share of a recovery of prior period income taxes. Net income a year ago was lowered by $97 million in respect of losses in our commodities business. See the Effects of the Capital Markets Environment on Third Quarter Results section for more details of the capital markets environment charges.

Revenue rose $56 million or 7.9% to $746 million due in part to strong performance from our interest-rate-sensitive businesses. Activity in certain of our investment banking businesses remains slow in the more cautious capital markets environment with challenging conditions affecting our fee-based businesses.

We re-focused some of our businesses during the quarter with the goal of improving our risk-return profile and concentrating on core, profitable client relationships. In our lending business, we are focusing on supporting clients where there are strong, profitable multi-product relationships or the potential to develop them. As a result, approximately 20% of our U.S. authorizations were designated non-core and will not be renewed at expiry. In our equity products and research units, we re-organized to enable the delivery of an integrated North American research, sales and trading platform to our global client base. We are focused on lowering the volatility of the group’s results and producing high, stable return on equity by changing our business mix and in some cases exiting certain businesses. As a result of these initiatives, we recorded a severance charge of $28 million pre-tax in the quarter and eliminated a number of positions within BMO Capital Markets.

During the quarter, we closed the transaction to acquire Chicago-based Griffin, Kubik, Stephens & Thompson Inc. On closing, BMO became the largest bank-qualified municipal bond dealer in Illinois and sixth-largest in the United States. Municipal bonds are a client-driven business and fit well with our overall business strategy.

BMO Capital Markets was involved in 107 new issues in the quarter including 42 corporate debt deals, 22 government debt deals, 8 issues of preferred shares and 35 common equity transactions, raising $43.3 billion.

Performance Targets
As indicated at the end of the first quarter, we do not expect to achieve four of our five annual targets given the challenging economic environment.

Caution Regarding Forward-Looking Statements
Bank of Montreal’s public communications often include written or oral forward-looking statements. Statements of this type are included in this document, and may be included in other filings with Canadian securities regulators or the U.S. Securities and Exchange Commission, or in other communications. All such statements are made pursuant to the ‘safe harbor’ provisions of, and are intended to be forward-looking statements under, the United States Private Securities Litigation Reform Act of 1995 and any applicable Canadian securities legislation. Forward-looking statements may involve, but are not limited to, comments with respect to our objectives and priorities for 2008 and beyond, our strategies or future actions, our targets, expectations for our financial condition or share price, and the results of or outlook for our operations or for the Canadian and U.S. economies.

By their nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties. There is significant risk that predictions, forecasts, conclusions or projections will not prove to be accurate, that our assumptions may not be correct and that actual results may differ materially from such predictions, forecasts, conclusions or projections. We caution readers of this document not to place undue reliance on our forward-looking statements as a number of factors could cause actual future results, conditions, actions or events to differ materially from the targets, expectations, estimates or intentions expressed in the forward-looking statements.

The future outcomes that relate to forward-looking statements may be influenced by many factors, including but not limited to: general economic and market conditions in the countries in which we operate; interest rate and currency value fluctuations; changes in monetary policy; the degree of competition in the geographic and business areas in which we operate; changes in laws; judicial or regulatory proceedings; the accuracy and completeness of the information we obtain with respect to our customers and counterparties; our ability to execute our strategic plans and to complete and integrate acquisitions; critical accounting estimates; operational and infrastructure risks; general political conditions; global capital market activities; the possible effects on our business of war or terrorist activities; disease or illness that impacts on local, national or international economies; disruptions to public infrastructure, such as transportation, communications, power or water supply; and technological changes.

We caution that the foregoing list is not exhaustive of all possible factors. Other factors could adversely affect our results. For more information, please see the discussion on pages 28 and 29 of BMO’s 2007 Annual Report, which outlines in detail certain key factors that may affect BMO’s future results. When relying on forward-looking statements to make decisions with respect to Bank of Montreal, investors and others should carefully consider these factors, as well as other uncertainties and potential events, and the inherent uncertainty of forward-looking statements. Bank of Montreal does not undertake to update any forward-looking statement, whether written or oral, that may be made, from time to time, by the organization or on its behalf. The forward-looking information contained in this document is presented for the purpose of assisting our shareholders in understanding our financial position as at and for the periods ended on the dates presented and our strategic priorities and objectives, and may not be appropriate for other purposes.

Assumptions about the level of asset sales, expected asset sale prices and risk of default of the underlying assets of the structured investment vehicles were material factors we considered when establishing our expectations regarding the structured investment vehicles discussed in this document including the amount to be drawn under the BMO liquidity facilities. Key assumptions included that assets would continue to be sold with a view to reducing the size of the structured investment vehicles, under various asset price scenarios.

Assumptions about the level of defaults and losses on defaults were material factors we considered when establishing our expectation of the future performance of the transactions that Apex Trust has entered into. Key assumptions included that the level of defaults and losses on defaults would be consistent with historical experience. Material factors which were taken into account when establishing our expectations of the future risk of credit losses in Apex Trust as discussed in this document included industry diversification in the portfolio, initial credit quality by portfolio and the first-loss protection incorporated into the structure.

In establishing our expectations regarding the run-rate costs of our credit card loyalty rewards program discussed in this document, we took into account the terms of the agreement that was entered into with Loyalty Management Group Canada Inc. in the quarter.

In establishing our expectations regarding the timing of completion of the integration of the Wisconsin acquisitions and associated costs discussed in this document, we assumed that the integration would be completed in accordance with the current project plan and in line with current cost estimates.

In establishing our fourth quarter expectations for specific provisions for credit losses and for gross impaired loans, we assumed that the credit environment would remain consistent with current conditions, and that our credit exposures would perform in a manner consistent with the expectations we have developed through the ongoing assessment of our exposures.

Assumptions about the performance of the Canadian and U.S. economies in 2008 and how it would affect our businesses were material factors we considered when setting our strategic priorities and objectives, and when determining our financial targets, including provisions for credit losses and our expectations about achieving those targets and our outlook for our businesses. Key assumptions were that the Canadian economy would expand at a moderate pace in 2008 while the U.S. economy expands modestly, and that inflation would remain low in North America. We also assumed that interest rates in 2008 would decline slightly in Canada and the United States, and that the Canadian dollar would trade at parity to the U.S. dollar at the end of 2008. In determining our expectations for economic growth, both broadly and in the financial services sector, we primarily consider historical economic data provided by the Canadian and U.S. governments and their agencies. In the first quarter, we anticipated that there would be weaker economic growth in Canada and that the United States would slip into a mild recession in the first half of 2008. We also updated our views that quarter to expect lower interest rates and a somewhat weaker Canadian dollar than when we established our 2008 financial targets. Although the United States avoided a technical recession in the first half of the year, we anticipate further weakness in its economy and as such our views remain largely unchanged from the first quarter. Tax laws in the countries in which we operate, primarily Canada and the United States, are material factors we consider when determining our sustainable effective tax rate.

Economic Outlook
The Canadian economy is expected to grow just 1% in 2008, the slowest pace since 1992. The weak U.S. economy and strong Canadian dollar continue to depress exports and manufacturing, though low interest rates and high commodity prices have supported domestic demand and incomes. Housing markets have cooled from record levels of activity last year, and should continue to moderate as past increases in prices have reduced affordability. Consumer spending remains healthy, especially for automobiles, but will likely soften in response to weakening employment gains. Business investment is also expected to slow given the uncertain economic climate and the recent pullback in commodity prices. Despite higher inflation, Canadian interest rates are projected to remain near current low levels for the rest of the year in response to the weak economy. The Canadian dollar is expected to continue trading below parity against the U.S. dollar, as the trade balance declines. The resource-based western provinces should continue to outperform Central and Atlantic Canada.

The U.S. economy is expected to slow further in the second half of 2008 after expanding modestly in the first half. House prices will continue to decline until demand strengthens and the large overhang of unsold homes is reduced. Falling house prices, rising unemployment, tightening credit standards and high food and fuel prices will continue to depress consumer spending. Waning support from tax-rebate cheques could cause consumption to decline in the near term. Businesses are also likely to continue to scale back investment until the economic outlook brightens. Capital markets activity remains subdued in response to ongoing dislocations in credit markets. Despite the highest inflation in 17 years, the Federal Reserve has not indicated any immediate plans to raise interest rates, given concerns about the economy and financial markets. It will likely remain on hold for the rest of the year.

This Economic Outlook section contains forward-looking statements. Please see the Caution Regarding Forward-Looking Statements.

Effects of the Capital Markets Environment on Third Quarter Results
Financial markets remain unsettled with continuing apprehension with respect to capital markets and concerns about an economic downturn. In the current quarter, capital markets continued to be affected by volatility in credit spreads, impacting mark-to-market valuations. The economic downturn is raising concerns about financial institutions credit exposures on traditional products such as home equity lines of credit, auto loans and commercial loans.

BMO’s results in the third quarter were affected by capital markets environment charges of $134 million ($96 million after tax), or $0.19 per share in respect of:

The capital markets environment charges of $134 million above were all reflected in non-interest revenue with $61 million in securities gains/losses other than trading, $76 million in trading non-interest revenue and a recovery of $3 million in other revenue.

The effects of significant and notable items affecting comparative period results are discussed at the end of this document.

Given the uncertainty in the capital markets environment, our investments in ABCP, SIVs, structured finance vehicles and mark-to-market investments could experience further valuation gains and losses due to changes in market value.

This Effects of the Capital Markets Environment on Third Quarter Results section contains forward-looking statements. Please see the Caution Regarding Forward-Looking Statements.

Significant and Notable Items
Q3 2008
Charges related to the capital markets environment in the third quarter are detailed in the Effects of the Capital Markets Environment on Third Quarter Results section. Additionally, a $50 million increase in the general allowance has been included in significant items as set out in the GAAP and Related Non-GAAP Measures table.

Q2 2008
No amounts were designated as significant items in the second quarter as the effects of charges related to the credit environment were not large on a net basis.

BMO’s results in the second quarter included a net benefit of $42 million ($28 million after tax) in respect of charges/recoveries related to the capital markets environment. The charges/recoveries consisted of:

•	a net recovery of $26 million ($18 million after tax) in respect of:
	o	a mark-to-market recovery of $85 million ($57 million after tax) for Apex/Sitka Trust in recognition during the quarter of the increased likelihood of a successful restructuring;
	o	a mark-to-market charge of $36 million ($24 million after tax) for our holdings of commercial paper of third-party Canadian conduits affected by the Montreal Accord;
	o	a charge of $23 million ($15 million after tax) for the capital notes in the Links and Parkland SIVs;
•	a recovery of $35 million ($24 million after tax) for items impacted by credit spreads, specifically mark-to-market adjustments, consisting of a benefit of $128 million ($86 million after tax) for mark-to-market gains on counterparty credit exposures on derivatives contracts as BMO’s credit spreads have moved out relative to various counterparties; less a charge of $93 million ($62 million after tax) for other trading and structured-credit related positions; and
•	a charge of $19 million ($14 million after tax) related to four smaller items, each with a net income impact of $10 million or less and including mark-to-market charges on our preferred share trading portfolio and monoline exposures.

The net benefit of $42 million above was reflected in trading non-interest revenue ($71 million), other revenue ($6 million) and securities gains/losses other than trading (-$35 million).

Q1 2008
Notable items in the first quarter were reported as significant items.

In the first quarter of 2008, BMO recorded $548 million ($362 million after tax and $0.72 per share) of charges for certain trading activities and valuation adjustments and an increase in the general allowance for credit losses. They included $488 million ($324 million after tax) in BMO Capital Markets in respect of: losses on exiting positions related to monoline insurer ACA Financial Guarantee Corporation ($158 million); trading and structured-credit related positions, preferred shares, third party Canadian conduits and other mark-to-market losses ($177 million); investments in Apex ($130 million); and capital notes in the Links and Parkland SIVs ($23 million). BMO has no further exposure to ACA. Reduced performance-based compensation associated with the charges was not included in the determination of the impact of significant items.

The $177 million charge above was primarily due to the impact of widening credit spreads on a number of our trading portfolios. The charge was comprised of a number of items, the largest of which was $78 million for counterparty credit risk on our derivatives, with approximately half related to monoline insurers (other than ACA) and similar credit derivative product companies. The $488 million charge included reductions in trading non-interest revenue ($420 million), investment securities gains ($23 million) and other income ($45 million).

Corporate Services results included a $60 million ($38 million after tax) increase in the general allowance for credit losses to reflect portfolio growth and risk migration.

Q3 2007
In the third quarter of 2007, BMO recorded $149 million ($97 million after tax and $0.19 per share) of charges in respect of commodities trading losses.

YTD 2008
Significant and notable items in 2008 are detailed above.

YTD 2007
Net income for the year-to-date 2007 was reduced by $512 million of significant items. They included $424 million after tax in respect of commodities losses of $829 million net of $120 million of reduced performance-based compensation. They also included the $88 million after-tax impact of a $135 million restructuring charge.

To view the rest of this news release consisting of:

INVESTOR AND MEDIA PRESENTATION

Investor Presentation Materials
Interested parties are invited to visit our web site at www.bmo.com/investorrelations to review this quarterly news release, presentation materials and a supplementary financial information package online. Copies of these documents are also available at BMO Financial Group’s offices at 100 King Street West, 18^th Floor, 1 First Canadian Place, Toronto, Ontario, M5X 1A1.

Quarterly Conference Call and Webcast Presentations
Interested parties are also invited to listen to our quarterly conference call on Tuesday, August 26, 2008 at 3:30 p.m. (EDT). At that time, senior BMO executives will comment on results for the quarter and respond to questions from the investor community. The call may be accessed by telephone at 416-695-9753 (from within Toronto) or 1-888-789-0089 (toll-free outside Toronto). A replay of the conference call can be accessed until Monday, November 24, 2008 by calling 416-695-5800 (from within Toronto) or 1-800-408-3053 (toll-free outside Toronto) and entering passcode 648304.

A live webcast of the call can be accessed on our web site at www.bmo.com/investorrelations. A replay can be accessed on the site until Monday, November 24, 2008.

Media Relations Contacts
Ralph Marranca, Toronto, ralph.marranca@bmo.com, (416) 867-3996
Ronald Monet, Montreal, ronald.monet@bmo.com, (514) 877-1873

Investor Relations Contacts
Viki Lazaris, Senior Vice-President, viki.lazaris@bmo.com, (416) 867-6656
Steven Bonin, Director, steven.bonin@bmo.com, (416) 867-5452
Krista White, Senior Manager, krista.white@bmo.com, (416) 867-7019

Chief Financial Officer
Russel Robertson, Interim Chief Financial Officer
russ.robertson@bmo.com, (416) 867-7360

Corporate Secretary
Blair Morrison, Vice-President & Corporate Secretary
corp.secretary@bmo.com, (416) 867-6785