Bank of Montreal 2012 Annual Report Download - page 49

MD&A
MANAGEMENT’S DISCUSSION AND ANALYSIS
Personal and Commercial Banking Canada
We offer a broad range of products and services to more than seven million customers in two customer segments –
personal banking and commercial banking. These include solutions for everyday banking, financing, investing, credit
cards and creditor insurance, as well as a variety of commercial products and financial advisory services. We deliver
services through our network of BMO Bank of Montreal branches, on the telephone, online and mobile, and automated
banking machines (ABMs), supported by a highly skilled sales force that includes mortgage specialists, financial
planners, small business bankers and commercial specialists.
“We continue to guide our customers to make the
right decisions with their money and we continue
to invest in building our capabilities to provide
exceptional service across all of our channels. As
a result, our customers have rewarded us with
top-tier customer loyalty scores in both personal
and commercial banking.”
Frank Techar
President and Chief Executive Officer
Personal and Commercial Banking Canada
Strengths and Value Drivers
‰Strong competitive position in commercial banking, reflected in our
number two ranking in market share for business loans of $5 million
and less.
‰Largest MasterCard issuer in Canada as measured by transaction
volumes, and one of the top commercial card issuers in North America.
‰Highly experienced team of specialists in mid-market commercial
banking, offering integrated products and services that are driving
high customer loyalty scores.
‰Strong and consistently applied credit risk management practices that
provide customers with reliable access to appropriate financing sol-
utions in all economic conditions.
‰Large, loyal customer base and strong brand presence.
Challenges
‰Headwinds to revenue growth, coming from slow economic growth
and low interest rates.
‰Increasing demand on resources to meet regulatory, compliance,
information security and fraud management requirements.
‰Increased competition for skilled resources.
Our Lines of Business
Personal Banking provides financial solutions for everyday banking,
financing, investing, credit cards and creditor insurance needs. We serve
approximately 20% of Canadian households.
Commercial Banking provides our small business, medium-sized
enterprise and mid-market banking clients with a broad suite of
commercial products and financial advisory services.
Our Strategy
We aim to succeed in the Canadian market by delivering a customer
experience differentiated on guidance across all channels and by
leveraging our highly productive distribution network.
Our Path to Differentiation
‰Customer-centric, high-performance culture.
‰Brand-aligned, innovative offers.
‰Market-leading direct channels.
‰Lean, automated core processes.
‰Data-driven customer insight and segmentation.
‰Strong risk management discipline.
Key Performance Metrics and Drivers 2012 2011* 2010
Net income growth (%) 0.6 6.4 16.5
Revenue growth (%) 0.3 5.2 10.8
Expense growth (%) 1.6 5.6 5.4
Efficiency ratio (%) 51.7 51.0 50.8
Personal Banking revenue ($ millions) 3,857 3,829 3,693
Personal loan growth (%) (1) 5.5 5.7 4.8
Personal deposit growth (%) 3.9 0.7 0.7
Commercial Banking revenue ($ millions) 2,331 2,339 2,170
Commercial loan growth (%) (1) 5.1 6.3 4.1
Commercial deposit growth (%) 5.3 9.9 8.4
Employee engagement index (%) (2) 74 78 75
2010 based on CGAAP.
* Growth rates for 2011 reflect growth based on CGAAP in 2010 and IFRS in 2011.
(1) Includes current loans, acceptances and securitized loans.
(2) Source: BMO Annual Employee Survey, conducted by Burke Inc., an independent
research company.
Caution
This Personal and Commercial Banking Canada section contains forward-looking statements.
Please see the Caution Regarding Forward-Looking Statements.
46 BMO Financial Group 195th Annual Report 2012