Bank of Montreal 2013 Annual Report Download - page 5

CHAIRMAN’S MESSAGE
Setting High Expectations
The Board of Directors is pleased with BMO’s results and is focused on the year ahead.
J. Robert S. Prichard
Chairman of the Board
Your bank has performed well over the past year. All of
us who are privileged to serve on the Board of Directors are
pleased with the results and confident about what can be
accomplished in the year ahead.
BMO achieved record revenue, record net income and
record earnings per share in 2013. There was an attractive
return of capital to common shareholders – over 60% of
earnings – through the combination of dividends and share
buybacks under the Normal Course Issuer Bid. And our
one-year total
shareholder return – share price appreciation
and dividends – led the Canadian banks.
The bank’s performance reflects the dedication and
commitment of a talented and motivated team of
employees led by a strong and experienced management
group. In this regard, I want to acknowledge our CEO,
Bill Downe, for his leadership and commitment. His belief
that BMO’s success depends on the success of customers
continues to guide our strategy and is increasingly
embedded in the culture of the bank.
It’s also a pleasure to welcome Frank Techar to his new role
as Chief Operating Officer, assuming overall responsibility
for BMO’s Personal & Commercial and Wealth businesses,
as well as the bank’s retail distribution channels, in both
Canada and the United States. Strengthened operational
capability across all of our businesses is now critical to
future success in our industry as the pace of change
quickens and as regulation continues to intensify. Frank’s
appointment strengthens our capacity to develop industry-
leading, cross-group capabilities that drive customer
experience – at the right pace. Frank brings to his role an
outstanding record of achievement and deep knowledge of
our businesses and the opportunities we have to strengthen
them. Together, Bill and Frank will be a formidable team
leading the bank forward.
We will work closely with Bill and the leadership team in
a shared commitment to redefine and grow the company,
work more efficiently for customers and capitalize on
our scale in Canada, the United States and select markets
worldwide. As we look forward to the year ahead, our
focus will be on execution and performance as we take
advantage of our strong businesses and platforms to
deliver another year of superior returns.
As your representatives, we will continue to strengthen
our board and the way it works, and we will continue
to work with management in a shared effort to enhance
the diversity of the organization at all levels. The board is
performing well, and I thank my fellow directors for their
many valued contributions to our progress.
Thank you for your confidence in our company during the
past year. I hope you will continue to stand with BMO as
we enter a new year of achievement .
J. Robert S. Prichard
CHIEF EXECUTIVE OFFICER’S MESSAGE
Expecting Change
The new climate of heightened expectations is redefining incremental change.
In banking, the impact promises to be dramatic, even disruptive – and, for those
who are ready to take full advantage, highly rewarding.
6 BMO Financial Group 196th Annual Report 2013
William A. Downe
Chief Executive Officer, BMO Financial Group
In the fiscal year just completed, BMO Financial Group
posted record net income of $4.2 billion and increased
retained earnings by just under $1.7 billion. We paid
common share dividends of $1.9 billion and repurchased
$675 million of common stock, effectively returning over
60% of earnings to shareholders. And we contributed
$1.7 billion in government levies and taxes.
We completed the final, most significant elements of
the conversion and integration of our 2011 acquisition
of Marshall & Ilsley, capturing cumulative annual run-rate
expense savings approaching $400 million. And we
positioned the bank for future growth in our four core
customer segments: personal banking, commercial banking,
capital markets and wealth management.
Most importantly, we made significant changes in the
leadership structure of the bank to reduce layers of
management and increase the proportion of our workforce
in customer-facing roles. On November 1, 2013, most
senior leaders in Canadian Personal and Commercial
Banking assumed new roles designed to erase old
boundaries and build customer loyalty. Our personal,
commercial and wealth businesses throughout North
America are now united under the leadership of Chief
Operating Officer Frank Techar, who is overseeing a
tightening of operating discipline and the acceleration
of key priorities across the bank.
More broadly, we have initiated longer-term measures
to increase our responsiveness to evolving customer
behaviour in a world where digital media and electronic
commerce compel all companies to respond. The ways that
customers are purchasing and consuming our products
and services are undergoing profound change. It’s
something all of us at BMO identify with – and we’re
investing in capabilities that recognize this shift.
All four operating businesses are moving into 2014 with
clear momentum and a great deal of confidence in our
continued strong performance. We’re well positioned not
only to meet expectations, but to anticipate and surpass
them – which is why we’ve made this the central theme of
our 196th annual report, a comprehensive review of the
past year’s achievements and the decisive steps we’ve
taken to advance BMO’s long-term strategy.
The world is far different from the one we faced a decade
ago. What people expect from a bank – from any business –
is rapidly changing. As customers increasingly rely on mobile
We work every day to help our customers have confidence in their
financial decisions.
BMO Financial Group 196th Annual Report 2013 7