Bank of Montreal 1998 Annual Report Download - page 24

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BANK OF MONTREAL GROUP OF COMPANIES
Shareholder Value
■Our five-year annualized ROI was 23.3% for 1998
versus 26.1% for 1997, down 2.8%.
■Share price increased 3.7% from 1997.
■Dividends paid per share increased $0.16 in 1998
and $0.19 in 1997.
FINANCIAL PERFORMANCE
9897969594
23.3
26.1
22.2
23.1
14.3
9897969594
0.9
11.9
22.2
13.8
16.5
9897969594
15.2
17.1
17.0
15.4
14.9
9897969594
1.4
15.1
9.9
9.0
6.9
9897969594
66.5
64.4
63.4
64.3
62.0
97
280
293
542
186
157
187
238
649
229
64
98
Earnings Growth
■Our earnings per share increased 0.9% from 1997.
■
Earnings growth reflected continued business volume
growth and strong asset quality, partially offset by the
effects of unusual market conditions in the fourth
quarter. These abnormal markets drove net trading
losses in the quarter and contributed to the decline
in other institutional businesses and a lower
contribution from Grupo Financiero Bancomer.
Profitability
■Our ROE for 1998 was 15.2% compared to 17.1%
in 1997.
■
ROE in 1998 exceeded the economic performance
threshold for the ninth consecutive year.
Revenue Growth
■Our revenue growth in 1998 was 1.4% compared to
15.1% in 1997.
■Revenue growth was due to strong business volume
growth, partially offset by lower contributions from
several of our institutional businesses, Bancomer,
and foregone revenue due to the sale of the U.S. credit
card business to Partners First, as well as the associ-
ated start-up losses in this venture.
Productivity
■Our expense-to-revenue ratio in 1998 was 66.5%
compared to 64.4% for 1997, with expense growth
of 4.7% compared to 16.8% in 1997.
■
Expense growth reflected strategic development
spend
ing, foreign exchange rate impact on U.S.-based
expenses and business volume growth, net of
productivity improvements and offset in part by the
impact of a 1997 fourth quarter charge of $75 million.
Operating Group Review
■Total Bank net income growth of 3.5% reflected
continued business volume growth and strong asset
quality, partially offset by the effects of unusual
market conditions in the fourth quarter.
■
PCFS, Harris and EFS combined net income
increased 6.4%.
■
I&CB and P&RMG combined net income
decreased 25.8%.
FIVE-YEAR RETURN ON
COMMON SHAREHOLDERS’
INVESTMENT (%)
More information can be found on
page 21.
RETURN ON COMMON
SHAREHOLDERS’ EQUITY (%)
MINIMUM ECONOMIC
THRESHOLD
(12% 1995–98;
13% IN 1994)
More information can be found on
page 25.
REVENUE GROWTH (%)
More information can be found on
page 26.
EXPENSE
-
TO
-
REVENUE
RATIO (%)
More information can be found on
page 30.
NET INCOME BY
OPERATING GROUP
($ millions)
PCFS I&CB
EFS P&RMG
HARRIS
More information can be
found on page 31.
FULLY DILUTED EARNINGS
PER SHARE GROWTH (%)
OBJECTIVE (MINIMUM OF 10%)
More information can be found on
page 23.
18