Bank of Montreal 2003 Annual Report Download - page 41

BMO Financial Group 186th Annual Report 2003 37
U.S. product capability, facilitating our transition into an inte-
grated North American investment and corporate bank. Also, the
group unified its U.S. operations under the established Harris
Nesbitt brand.
We remain cautiously optimistic about the near term, as
industry-wide weakness in financial markets is showing signs
of abating. We have advanced our key strategic initiatives and are
now well positioned for accelerated growth in North America.
We anticipate benefiting from slow and steady improvement in
the U.S. business environment. We expect Canadian economic
growth of 3.1% and U.S. economic growth of 4.4% in 2004, up
from an estimated 1.7% and 3.0%, respectively, in 2003.
Investment and Corporate Banking
Description and Strategy
Investment and Corporate Banking (I&CB) provides a full suite
of financial products and services to our clients. Services include
strategic advice on mergers and acquisitions, restructurings and
recapitalizations, as well as providing valuation and fairness
opinions. We provide capital-raising services through debt and
equity underwriting. We also provide a full range of loan and
debt products, balance sheet management solutions and cash
management services. Our strategy in Canada is to continue to
reinforce our leadership position in key markets and products.
In the United States, we will continue to grow a high-quality,
focused and profitable investment and corporate bank serving
key sectors of the U.S. mid-market.
2003 Overview
Despite soft market conditions and reduced client lending and
transaction volumes, I&CB achieved solid results in 2003. Strong
cost containment also contributed to our performance. The full
impact of improved year-over-year results was less apparent
because of the stronger Canadian dollar. The acquisition of HNG
complements our U.S. platform by expanding our client base and
completing our product offering. All U.S. businesses are now
unified under the Harris Nesbitt brand.
2004 Focus
▪
Continue to deepen and broaden relationships with targeted
clients by providing them with relevant integrated financial
solutions and superior service.
▪
Leverage the full breadth of our expanded capabilities in
Canada and the United States and in cross-border activities.
▪
Remain focused on improving our profitability, productivity
and return on equity.
Capital Markets
Description and Strategy
The Capital Markets line of business provides integrated debt,
currency, interest rate, credit and commodity solutions to tar-
geted wholesale, commercial and retail clients. We also provide
efficient funding and liquidity management to BMO Financial
Group and its clients.
2003 Overview
Capital Markets used its business diversity to generate strong
net income despite difficult market conditions. Client activity
improved in 2003, as spreads narrowed in a flatter yield curve
environment. We benefited from our 2002 investment in U.S. debt
origination and credit derivatives franchises, which contributed
strong revenue growth. We also initiated a Performance Enhance -
ment Program, which has resulted in improved cost containment
and enhanced revenue diversification with an emphasis on cli-
ent transactions.
2004 Focus
▪ Deepen and expand client relationships, while broadening our
product offering in growth areas such as interest rate, com-
modity and credit derivatives.
▪Expand enterprise-wide integrated client coverage initiatives.
▪
Leverage the strengths of our newly integrated HNG subsidiary.
▪
Continue a disciplined approach to achieving our productivity
and return targets.
Equity Division
Description and Strategy
The Equity Division offers a comprehensive suite of Canadian
equity products globally. These products are complemented
by high-quality sales, trading and research capabilities, and an
intense focus on client service. We continue to maintain and
enhance our leadership position in Canada, while selectively
growing our product base in the United States. Newly acquired
HNG will provide the U.S. equity platform needed to deliver a
full product offering to the Harris Nesbitt client base.
2003 Overview
Equity Division performance was solid despite weakness in
financial markets continuing into 2003. Accelerated deal flow
in the primary markets and expanded derivatives capabilities
more than offset a contraction in commission revenue. For the
23rd consecutive year, the Brendan Wood International Survey
ranked BMO Nesbitt Burns Top Overall Research Team. The
survey also ranked us first in execution and quality of sales.
Greenwich Associates also ranked us Top Overall Research Team
in 2003.
2004 Focus
▪
Enhance our product offerings through the integration of
Harris Nesbitt Gerard’s research, sales and trading platform.
▪
Continue to focus on growth from derivatives capabilities.
▪
Introduce new delivery methods and formats for Equity
Research.
▪
Create specialized sales and trading coverage teams for
seg ments of the institutional market.
Lines of Business