Bank of Montreal 2007 Annual Report Download - page 106

Provision for Credit Losses
Changes in the value of our loan portfolio due to credit-related losses
or recoveries of amounts previously provided for or written off are
included in the provision for credit losses in our Consolidated Statement
of Income.
Foreclosed Assets
Property or other assets that we have received from borrowers to satisfy
their loan commitments are recorded at fair value and are classified as
either held for use or held for sale according to management’s intention.
Fair value is determined based on market prices where available. Other-
wise, fair value is determined using other methods, such as analysis
of discounted cash flows or market prices for similar assets.
102 BMO Financial Group 190th Annual Report 2007
Notes to Consolidated Financial Statements
Notes
Loans, including customers’ liability under acceptances and allowance for credit losses by category, are as follows:
(Canadian $ in millions) Gross amount Specific allowance General allowance Net amount
2007 2006 2007 2006 2007 2006 2007 2006
Residential mortgages $ 52,429 $ 63,321 $ 14 $ 5 $11 $ 23 $ 52,404 $ 63,293
Credit card, consumer instalment
and other personal loans 37,682 34,049 11 327 340 37,354 33,708
Business and government loans 62,650 56,030 142 147 517 506 61,991 55,377
Securities borrowed or purchased
under resale agreements 37,093 31,429 –––– 37,093 31,429
Subtotal 189,854 184,829 157 153 855 869 188,842 183,807
Customers’ liability under acceptances 12,389 7,223 –– 43 36 12,346 7,187
Total $ 202,243 $ 192,052 $157 $ 153 $898 $ 905 $ 201,188 $ 190,994
By geographic region (1):
Canada $ 145,765 $ 139,223 $105 $ 96 $587 $ 555 $ 145,073 $ 138,572
United States 51,634 50,227 51 53 311 350 51,272 49,824
Other countries 4,844 2,602 14 –– 4,843 2,598
Total $ 202,243 $ 192,052 $157 $ 153 $898 $ 905 $ 201,188 $ 190,994
No impaired loans were foreclosed during the years ended October 31,
2007 and 2006.
Our average gross impaired loans and acceptances were $677 mil-
lion for the year ended October 31, 2007 ($729 million in 2006). Our
average impaired loans, net of the specific allowance, were $516 million
for the year ended October 31, 2007 ($552 million in 2006).
During the years ended October 31, 2007, 2006 and 2005, we
would have recorded additional interest income of $43 million, $45 mil-
lion and $65 million, respectively, if we had not classified any loans
as impaired. Cash interest income on impaired loans of $nil was
recognized during each of the years ended October 31, 2007, 2006
and 2005.
(1) Geographic region is based upon the country of ultimate risk.
Restructured loans of $3 million were classified as performing during the year ended
October 31, 2007 ($nil in 2006). No restructured loans were written off in the years
ended October 31, 2007 and 2006.
Included in loans as at October 31, 2007 are $56,356 million ($53,750 million in 2006) of loans
denominated in U.S. dollars and $1,909 million ($1,101 million in 2006) of loans denominated
in other foreign currencies.
Impaired loans, including customers’ liability under acceptances and the related allowances, are as follows:
(Canadian $ in millions) Gross impaired amount Specific allowance Net of specific allowance
2007 2006 2007 2006 2007 2006
Residential mortgages $126 $ 115 $14 $ 5 $ 112 $ 110
Consumer instalment and other personal loans 55 48 1154 47
Business and government loans 539 503 142 147 397 356
Total $720 $ 666 $157 $ 153 $ 563 $ 513
By geographic region (1):
Canada $454 $ 391 $105 $ 96 $ 349 $ 295
United States 262 260 51 53 211 207
Other countries 415 14311
Total $720 $ 666 $157 $ 153 $ 563 $ 513
(1) Geographic region is based upon the country of ultimate risk.Fully secured loans with past due amounts between 90 and 180 days that we have not classified
as impaired totalled $58 million and $47 million as at October 31, 2007 and 2006, respectively.