Bank of Montreal 2007 Annual Report Download - page 46

Management’s Discussion and Analysis
2007 Review of Operating Groups Performance
42 BMO Financial Group 190th Annual Report 2007
MD&A
This section includes an analysis of the financial results of our operating
groups and descriptions of their businesses, visions, strategies, strengths,
challenges, key performance drivers, achievements and outlooks.
Personal and Commercial Banking (P&C) (pages 43 to 48)
Net income was $1,364 million in 2007, an increase of $107 million
or 9% from 2006.
Private Client Group (PCG) (pages 49 to 51)
Net income was $408 million in 2007, an increase of $53 million
or 15% from 2006.
BMO Capital Markets (BMO CM) (pages 52 to 54)
Net income was $425 million in 2007, a decrease of $435 million
or 51% from 2006.
Corporate Services, including Technology and Operations (page 55)
Net loss of $66 million in 2007, compared with net income of
$191 million in 2006.
The basis for the allocation of results geographically and among
operating groups is outlined in Note 26 on page 130 of the
financial statements. Certain prior year data has been restated,
as explained on page 22.
Contributions to Revenue, Expenses, Net Income and Average Assets by Operating Group and by Location ($ millions, except as noted)
Personal and Commercial Private BMO Corporate Services, including Total
Banking Client Group Capital Markets Technology and Operations Consolidated
For the year ended
October 31 2007 2006 2005 2007 2006 2005 2007 2006 2005 2007 2006 2005 2007 2006 2005
Operating Groups Relative Contribution to BMO’s Performance (%)
Revenue 59.3 54.3 52.4 21.5 18.7 20.5 20.7 27.5 27.5 (1.5) (0.5) (0.4) 100 100 100
Expenses 51.0 51.6 49.6 21.6 21.1 24.1 23.7 25.2 23.4 3.7 2.1 2.9 100 100 100
Net income 64.0 47.2 50.1 19.1 13.3 13.1 19.9 32.3 35.5 (3.0) 7.2 1.3 100 100 100
Average assets 39.6 44.1 42.8 2.0 2.1 2.4 57.4 52.3 53.0 1.0 1.5 1.8 100 100 100
Total Revenue
Canada 4,598 4,455 4,217 1,784 1,609 1,486 1,394 1,380 1,339 (195) (49) (23) 7,581 7,395 7,019
United States 908 906 897 263 276 544 486 1,309 1,289 (102) (100) (90) 1,555 2,391 2,640
Other countries 145 125 102 787 89 91 113 152 102 77 393 326 299
5,651 5,486 5,216 2,054 1,893 2,037 1,969 2,780 2,741 (145) (47) (36) 9,529 10,112 9,958
Total Expenses
Canada 2,663 2,588 2,468 1,164 1,070 1,022 717 753 724 241 109 109 4,785 4,520 4,323
United States 696 681 659 262 271 506 695 726 654 – 17 62 1,653 1,695 1,881
Other countries 7913111153 123 102 2512 163 138 128
3,366 3,278 3,140 1,427 1,342 1,529 1,565 1,602 1,480 243 131 183 6,601 6,353 6,332
Net Income
Canada 1,063 1,009 965 401 345 299 537 514 426 (63) 121 (20) 1,938 1,989 1,670
United States 114 115 124 2410 (80) 347 351 (103) 5 (9) (67) 471 476
Other countries 187 133 111 565(32) (1) 73 100 65 61 260 203 250
1,364 1,257 1,200 408 355 314 425 860 850 (66) 191 32 2,131 2,663 2,396
Average Assets
Canada 118,748 113,901 105,517 4,787 4,160 3,708 94,125 74,284 80,473 (1,088) (416) (1,574) 216,572 191,929 188,124
United States 23,477 21,890 21,055 2,299 2,379 3,345 80,580 61,220 52,570 4,794 4,828 5,819 111,150 90,317 82,789
Other countries 416 463 446 56832,379 26,307 24,191 53 109 944 32,853 26,885 25,589
142,641 136,254 127,018 7,091 6,545 7,061 207,084 161,811 157,234 3,759 4,521 5,189 360,575 309,131 296,502
Net Income
by Operating Group
Corporate
Services (3.0)%
BMO CM 19.9%
P&C 64.0%
PCG 19.1%
2007
Corporate
Services 7.2%
BMO CM 32.3%
P&C 47.2%
PCG 13.3%
2006
Net Income
by Country
2007
2006
U.S. (3.1)%
Canada
90.9%
Other
countries
12.2%
U.S. 17.7%
Canada
74.7%
Other
countries
7.6 %
The significant items charged to
BMO CM and Corporate Services
shifted the net income mix in 2007.
The impact of significant items
in 2007 was recorded primarily in
the United States.