Bank of Montreal 1997 Annual Report Download - page 39

Bank of Montreal 180th Annual Report 1997 33
Record Earnings Driven by Diversification Strategy
Group Description
Created in 1997, the Global Treasury Group (GTG) serves the large and growing segments of corporate and institutional
clients in North America and globally by offering financing and treasury solutions, as well as relationship management
for the Non-Bank Financial Institutions and Governments and International Financial Institutions segments. In 1997,
GTG contributed 31% of our total net income and accounted for 35% of our total average assets.
Business Environment
There are a number of significant environmental factors which are relevant to the corporate and institutional markets
we serve. First, from a global perspective, global flows of capital and investment have become substantial, providing
significant opportunities for financial intermediaries who can provide creative services for both investors and borrowers.
Second, the growing complexity of markets and risks has transformed risk management into a complex science, and
opportunities exist to exploit expertise in this area, both internally and as an element of financial solutions offered to
corporations and institutions. Finally, clients are increasingly looking for complete solutions to their requirements. The
growing complexity of markets is creating client demand for both education and customized solutions, and top tier
providers will need to exceed client expectations in this area. GTG has focused on these factors, among others, to shape
their business strategies, several of which have been defined below.
Global Treasury Group
Provide Clients with Relevant, Creative Solutions
•Jointly, GTG and the Investment Bank firmly established
themselves as the Canadian market leader in the
Managed Futures product line through the issuance of
securities sold to institutional and individual investors.
•Completed the largest collateralized bond obligation
(CBO). This innovative US$1.04 billion vehicle combines
the Bank’s expertise in managing credit risk portfolios
with Nesbitt Burns expertise in raising public funding.
•Established Bank of Montreal Ireland (BMI) as a fully
licensed bank to source and build foreign currency
assets. The three main lines of business are treasury,
loans/investments and managed futures.
• Launched an International Money Market team into
Barbados which began trading in the fourth quarter
of 1997.
Continued Development of Our Derivatives Competencies
• Developed core competency in derivatives by enhancing
professional skills, developing systems infrastructure
and improving product delivery capabilities.
•Launched commodity derivatives business to comple-
ment our organizational strengths in natural resources.
The group will service client needs for oil and gas
derivative products.
•Established London Global Financial Products Group
extending core capabilities into the G10 currencies plus
Australia, Spain and ECU currencies.
Provide Financial Services for Our Clients Doing Business in
and/or from the Asia Region
•In September 1997, we became the first Canadian bank
to open a full-service commercial branch in Beijing, and
the only Canadian bank with two branches in China.
Guangzhou branch was opened in 1995.
Leverage Specialized Project Finance Knowledge
•The recently formed Global Project Finance team has
successfully won several lead/underwriting mandates
and participations in North America, Asia, Latin
America/Mexico and Europe.
Key Business Strategies:
•provide clients with relevant, creative solutions
•continued development of our derivatives competencies
•provide financial services for our clients doing business in and/or from
the Asia region
•leverage specialized project finance knowledge
•
effective risk management to ensure appropriate risk-return relationship
Accomplishments in 1997