Bank of Montreal 1999 Annual Report Download - page 28

North American
Peer Group Comparison
1999 1998(a) Five-Year Average
Bank of 20 Bank of 20 Bank of 20
Montreal Quar- Bank Montreal Quar- Bank Montreal Quar- Bank
Performance tile Average* Performance tile Average* Performance tile Average*
Financial Performance Measures (%) (b)
Five-year TSR 22.0 220.0 23.3 219.6 22.0(c) 220.0(c)
NEP growth (13.5) 337.8 (4.7) 340.9 31.2 441.6
Fully diluted
EPS growth 1.3 318.5 0.9 3(10.2) 10.0 26.8
Return on common
shareholders’
equity (ROE) 14.1 417.7 15.2 316.0 15.8 316.4
Revenue growth 9.0 314.2 1.4 446.2 8.9 419.0
Expense-to-revenue
ratio (d) 67.3 460.6 66.5 460.5 65.2 461.2
Provision for credit
losses as a % of
average loans
and acceptances 0.22 10.96 0.09 11.11 0.22 10.87
Financial Condition Measures (%)
Gross impaired loans
and acceptances as
a % of equity
and allowance for
credit losses 8.53 46.32 6.66 45.80 8.53(e) 46.32(e)
Cash and securities-
to-total assets 29.2 232.2 28.4 232.7 29.2(e) 232.2(e)
Tier 1 Capital Ratio (f) 7.42 38.10 6.95 47.73 7.42(e) 38.10(e)
Credit rating AA –
2AA
– AA –
1A+ AA
– (e) 2AA – (e)
*The selection of the 20 largest banks is based on the size of their 1998 common shareholders’ equity:
Bank of Montreal, The Bank of Nova Scotia, Canadian Imperial Bank of Commerce, Royal Bank of Canada,
The
Toronto Dominion Bank, The Bank of New York Company, Inc., BankAmerica Corporation, Bank One
Corporation, National City Corporation, The Chase Manhattan Corporation, Citigroup, Inc., FleetBoston Financial
Corporation, J.P. Morgan & Co. Incorporated, Keycorp, U.S. Bancorp, PNC Bank Corporation, SunTrust Banks, Inc.,
First Union Corporation, Wachovia Corporation, and Wells Fargo & Company.
Note: Performance for the U.S. banks was based on the twelve-month period ended September 30 to
approximate the Canadian bank fiscal year which ended on October 31.
(a) Reclassified to conform with 1999 presentation.
(b) Ratios shown are the actual reported ratios with the exception of the Canadian peer group, the ratios of
which have been restated to conform with Bank of Montreal accounting methods. Non-recurring items are
excluded for ranking purposes.
(c) Reflects five-year TSR for the period ending October 31, 1999.
(d) Amortization of goodwill and other intangibles is included in non-interest expense for all banks.
(e) Condition ratios are as at October 31, 1999.
(f) U.S. basis.
Ranking: from 1 to 5 – Quartile 1; 6 to 10 – Quartile 2; 11 to 15 – Quartile 3; 16 to 20 – Quartile 4.
1999 Comparison
Our five-year total shareholder return ranking was second quartile and above average,
consistent with 1998.
In the other six performance measures we ranked in the first quartile in one measure,
the third quartile in three measures and the fourth quartile in two measures, consistent with
1998. Our performance in 1999 was below average in five of these six measures mainly
due to non-recurring items for all banks, which had a favourable impact on the peer group
averages. In addition, the return to more normal provisioning levels had a negative impact
on our results.
In the condition measures we ranked in the second quartile in two measures, the third
quartileinonemeasureandthefourthquartileinonemeasure.Thiscomparedtoonefirst
quartile, one second quartile and two fourth quartile rankings in 1998. While our 1999 results
in gross impaired loans and acceptances, Tier 1 Capital Ratio and cash and securities-to-total
assets were below average, we believe that our asset quality, liquidity level and capital
base remain strong. Our 1999 credit rating ranking was average.
Five-Year Average Comparison
In the six performance measures, excluding five-year TSR, we ranked first or second quartile
in two measures, and third or fourth quartile in four measures, compared to one first quar-
tile ranking, and five third or fourth quartile rankings in 1998.
Our rankings under the condition measures, which are as at October 31, 1999, and the
five-year TSR measure are discussed above under 1999 Comparison.