Bank of Montreal 2004 Annual Report Download - page 8

Chief Executive Officer’s Message to Shareholders
BMO Financial Group Annual Report 20044
in the Canadian industry for this important perform-
ance measure. My leadership team and colleagues
across the enterprise now accept the notion that of
all the things we need to achieve in order to achieve
top performance, the single most effective one is
improving productivity, which remains at the top
of our priority list for 2005. Lest anyone equate
productivity improvement with cost-cutting alone,
however, be assured that we will continue to
work not just the expense side of the ledger but
the revenue side as well – largely by way of our
heightened customer focus. There have not been
nor will there be any costs cut at the expense of
customer service.
The successes we have achieved in recent times,
the records we have posted and the reach-for-the-top
goals we are setting all reflect the renewed energy
and engagement of what has always been a first-class
workforce. We can already lay claim to more
than our share of thoughtful, talented, customer-
focused colleagues operating at all levels; and
to a number of lines of business where we enjoy
top-performer status. What is developing in our
organization right now is a sense of “If they can do
it, why can’t we all?”
Acting on the advice of top-performing individ-
uals within our organization – and taking careful
note of the success stories of existing top-performing
enterprises worldwide – we are systematically
reforming all business practices that impede our
ability to improve service to clients and generate
revenues. Some kinds of red tape, alas, are more
resilient than others, but I can say with confidence
that the customer-focused, sales-and-service
mindset is taking hold across BMO Financial
Group, and with it the growing conviction that
The successes we have achieved in recent times,
the records we have posted and the reach-for-the-top goals
we are setting all reflect the renewed energy and engagement
of what has always been a first-class workforce
.
2004 Targets 2004 Performance Targets for 2005
10% to 15% EPS growth ✔29% 3% to 8% EPS growth from a base
(see page 24) of $4.21 (excluding changes in
the general allowance)
ROE of 16% to 18% ✔19.4% ROE of 17% to 18%
(see page 25)
Provision for credit losses of ✔$67 million before the reduction Specific provision for credit losses of
$500 million or less of $170 million of general allowance $400 million or less
(see page 31)
Tier 1 capital ratio of ✔9.81% Tier 1 capital ratio of at least 8%
at least 8% (see page 51)
Improve cash productivity ratio ✔155 bps improvement Improve our cash productivity ratio
by 150 to 200 bps (see page 32) by 150 to 200 bps