Bank of Montreal 1997 Annual Report Download - page 44

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Bank of Montreal 180th Annual Report 199738
Financial Results
(all dollar amounts are in Canadian dollars)
Net income for Harris was $186 million in 1997, up from $153 million in 1996, an increase
of 21.4%. Income growth was driven by revenue growth that was up 11.6% from $938 mil-
lion in 1996. This increase in revenue was due to the acquisition of Household Bank in
June 1996 and a strong increase in loan and deposit volumes, slightly offset by a decline
in net interest margin. Average assets increased 12.3% in 1997 versus 12.5% in 1996. Net
interest income growth was 13.0% due to an increase in business volumes and the pur-
chase of Household. Average asset growth was $2,824 million in 1997, reflecting business
volume growth across all asset categories and the purchase of Household. Non-interest
revenue increased $28 million in 1997 from $314 million in 1996. The increase reflects
higher service charges and trust income and the sale of the securities custody business in 1996. Non-interest expense
growth in 1997 was 12.3%, caused primarily by the costs of acquiring, operating and integrating 54 Household locations
into Harris’ retail network and volume growth across all lines of business.
Net income in 1996 was down $5 million from $158 million in 1995. The 1996 results included a one-time $14 million
after-tax charge resulting from legislation to assess premiums on deposits insured by the Savings Association Insurance
Fund. This assessment resulted from the June 1996 purchase of Household Bank’s retail banking business.
9796959493
7,938
10,980
8,879
12,710
15,070
Average Current Loans
($ millions)
Harris Regional Banking
($ millions except as noted)
As at or for the year ended October 31
1997 1996* 1995* 1994* 1993*
Net interest income 705 624 570 444 449
Other income 342 314 349 332 311
Provision for credit losses 13 28 36 35 49
Non-interest expense 731 650 623 624 538
Income before taxes 303 260 260 117 173
Income taxes 117 107 102 34 55
Net income 186 153 158 83 118
Average assets 25,866 23,042 20,486 16,936 15,267
Average current loans 15,070 12,710 10,980 8,879 7,938
Average commercial loans 10,787 9,669 8,583 7,320 6,308
Average deposits 17,924 16,486 14,759 12,243 11,259
Assets under administration
(a)
89,424 71,804 247,160 197,306 194,555
Assets under management 32,936 24,381 39,221 19,222 22,600
Full-time equivalent staff
(b)
6,262 6,023 NA NA NA
Expense-to-revenue ratio
(%)
69.8 69.3 67.8 80.4 70.9
*Restated to give effect to the current year’s organization structure.
(a) The decrease in assets under administration at October 31, 1996 reflects the sale of Harris’ securities custody and related trustee
services business for large institutions in January 1996.
(b) As at October 31.
NA – Not available.
Harris Regional Banking Continued
9796959493
0.5
18.7
14.6
12.7 11.6
Commercial Loan Growth
(%)