Bank of Montreal 1997 Annual Report Download - page 22

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9796959493
20.6 23.1
14.3
22.2
26.1
9796959493
8.1
13.8
16.5
22.2
11.9
9796959493
14.1 15.4
14.9 17.0 17.1
9796959493
9.4 9.0
6.9 9.9
15.1
9796959493
60.0 64.3
62.0 63.4 64.4
196
547
153
112
181
539
186
150
9796
318 403
Shareholder Value
•Our five-year annualized ROI was 26.1%, up 3.9% versus our
1996 five-year ROI of 22.2%.
• Share price increased 50.1% compared to 36.3% in 1996.
• Dividends paid per share increased $0.19 in 1997 and $0.12
in 1996.
Profitability
• We achieved 17.1% ROE in 1997 which marks the eighth
consecutive year that we have exceeded our 14–15% objective.
•Our net income growth measured 11.7% in 1997 compared to
18.4% in 1996.
• ROE in 1997 exceeded the economic performance threshold.
Earnings Growth
• We achieved 11.9% EPS growth in 1997, which marks the
eighth consecutive year of growth.
• Income growth was due to business volume growth and
higher Global Treasury and Investment and Corporate
Banking contributions.
• Earnings growth in 1997 and 1996 was above the minimum
objective of 10%.
Operating Group Review
• Total Bank net income growth of 11.7% was achieved through
diversified and differentiated business segments.
• Global Treasury Group and Investment and Corporate Banking
represented our highest growth segments.
•Electronic Financial Services’ net income decline of 7.4% was
largely due to continued investment in mbanx.
Revenue Growth
•Our revenue growth increased from a rate of 9.9% last year
to 15.1% in 1997.
• Revenue growth in 1997 was driven by business volume
growth, cash collections on impaired loans, and earnings on
bonds and equities of lesser developed countries as well as
strong other income growth from our fee-related businesses.
Productivity
•Our productivity ratio increased 1.0% to 64.4% in 1997.
•The increase in the productivity ratio was driven by an
increase in expense growth due to variable compensation
costs, investments for the future and other expenses
including a $75 million charge representing accelerated
depreciation related to technology changes and costs associ-
ated with improving the efficiency of our credit process.
Five-Year Return on Common
Shareholders’ Investment
(%)
More information can be found on page 21.
Return on Common Shareholders’ Equity
(%)
Objective (14
–
15%)
More information can be found on page 23.
Revenue Growth
(%)
More information can be found on page 24.
Expense-to-Revenue Ratio
(%)
More information can be found on page 28.
Net Income by Operating
Group
($ millions)
PCFS Harris
GTG I&CB
EFS
More information can be found
on page 30.
Fully Diluted Earnings Per Share Growth
(%)
Objective (10%)
More information can be found on page 22.
Bank of Montreal 180th Annual Report 199718
Financial Performance