Bank of Montreal 2004 Annual Report Download - page 50

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BMO Financial Group Annual Report 200446
MD&A
Management’s Discussion and Analysis
Canadian Mergers and
Acquisitions Market
(for the 12 months ended September 30)
270 995
860 802
90 110
1,295
136
94
876
20042003200220012000
Number of deals
Value of deals ($ billions)
IBG Revenue
by Location (%)
57
43
50
50
46
54
Canada/other
United States
200420032002
Market
BMO Nesbitt Burns participation
North American Equity
Underwriting
–
Canadian
Issuers ($ billions)
200420032002
25
36
30
40
36
49
Return on Equity (%)
13.6
9.0
10.6
14.3
18.4
20042003200220012000
Maintain Canadian leadership in the high-return fee businesses
of mergers and acquisitions, equity and debt underwriting,
and securitization.
•Participated in 374 Canadian corporate debt and equity
transactions that raised $61 billion.
•Advised on $10.6 billion of completed Canadian mergers
and acquisitions.
•Ranked Top Overall Research Team in the Brendan Wood
International Survey of institutional investors for the
24th consecutive year, and ranked first for Overall Quality
of Sales Service.
•Canadian Securitization unit ranked first in market share
of asset-backed commercial paper conduit outstandings.
•Ranked first in Canadian equity block trading.
Continue a disciplined approach to capital and cost
management, and improve our cash productivity ratio.
•Improved our cash productivity ratio by 110 bps.
•Improved our return on equity to 18.4% from 14.3%.
2004 Objectives and Achievements
Accelerate growth through further integration of our
U.S. operations, with a focus on increasing the proportion
of fee-based revenue.
•
Expanded and upgraded IBG’s U.S. team through a number
of key hires at senior levels, including head of Mergers
and Acquisitions and head of U.S. Equity Capital Markets.
•Aligned nationwide client relationship and product
coverage with 10 priority industry sectors.
Deepen and broaden relationships with target clients
by leveraging the full range of our cross-border capabilities,
including enhancing our product offering through the
full integration of Harris Nesbitt Gerard.
•Completed the integration of Gerard Klauer Mattison
into Harris Nesbitt, providing an enhanced integrated
service offering.
•Leveraged the cross-border capabilities of BMO Nesbitt
Burns and Harris Nesbitt in all product areas to deliver
unique, effective solutions to clients.
The mergers and acquisitions
environment has been improving.
U.S. growth has softened but
remains a priority.
High participation in equity
underwriting continues.
Return on equity increased for the
third consecutive year.
Other Achievements
•Record net income in 2004.
•
First Canadian bank authorized to sell derivatives in China.
•
Expansion of the U.S. Securitization team with the addition
of a team of term asset securitization specialists in Dallas.
What’s Next? Priorities for 2005
•Improve client alignment to realize all revenue opportunities.
•Optimize risk-taking to maximize returns.
•Drive new product development.
•Improve our cash productivity ratio by at least 150 bps.