Bank of Montreal 2007 Annual Report Download - page 48

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Management’s Discussion and Analysis
44 BMO Financial Group 190th Annual Report 2007
MD&A
Personal and Commercial Banking Canada (P&C Canada)
serves over seven million customers. Working in partnership with
other BMO businesses, we offer a full range of products and services.
These include solutions for everyday banking, financing, investing,
credit card and insurance needs as well as a full suite of integrated
commercial and capital market products and financial advisory
services. P&C Canada’s extensive delivery network encompasses almost
1,000 BMO Bank of Montreal traditional and instore branches, telephone
banking, online banking at bmo.com, mortgage specialists and our
network of almost 2,000 automated banking machines. Our personal
and commercial banking business is among the five largest in Canada.
Vision
Our goal is to be a leading customer-focused financial services provider,
committed to meeting all of our customers’ financial needs. We plan
to achieve this by providing exceptional sales and service experiences
that will build long-term relationships with our customers and drive
revenue growth for BMO shareholders. Our comprehensive suite of
prod-
ucts and services will continue to help our customers better manage
all
aspects of their financial affairs.
Strategies
We aim to succeed in the Canadian market by providing a high-quality,
consistent customer experience and optimizing our sales and distribution
network. Our main strategies are:
•Provide a differentiated customer experience and employ an appro-
priately aligned performance management system in our personal
banking business.
•Accelerate growth in all segments of the commercial marketplace
by continuing to build on our strengths in mid-market banking and
improving performance in the small business segment.
•Further leverage our successful credit card product offering.
Our Lines of Business
Personal Banking
provides solutions to everyday banking, financing,
investing and insurance needs. We serve approximately 20% of Canadian
households. Our national integrated multi-channel sales and distribution
network offers customers convenience and choice in meeting their
banking needs.
Commercial Banking provides our small business, medium-sized
enterprise and mid-market banking clients with a broad and useful
range of banking products and services. We offer a full suite of
integrated commercial and capital markets products and financial
advisory services.
Cards and Payments Services provides flexible, secure payment
options
to our customers. We are the largest MasterCard issuer in Canada
.
Strengths
•Strong competitive position in commercial banking, reflected in our
number two ranking in market share for business loans of $5 million
and below.
•
Superior risk management that provides our customers with consis-
tent
access to financing solutions in all economic conditions.
•Comprehensive range of everyday banking and payment capabilities,
combined with our exclusive customer loyalty programs partnering
with AIR MILES. No other bank in Canada offers such a broad rewards
program for both debit card and credit card purchases.
•Competitive electronic transaction processing business through Moneris
Solutions, which serves approximately 40% of the Canadian market.
•Integrated technology platform and customer data management
capabilities, which support our effective sales and service model.
Challenges
•Increased pace of change and innovation provides customers
with easy access to an expanding array of alternative products
and services.
•Strong competition for deposit accounts is pressuring deposit margins
and customer retention.
•Competition to attract and retain highly qualified employees has
increased in high-growth sectors and regions.
•Demand for resources to meet regulatory, compliance, information
security and fraud management requirements is increasing.
Key Performance Metrics and Drivers 2007 2006 2005
Personal banking, insurance
and other revenue ($ millions)
2,463 2,370 2,313
Personal loan growth*(%)
4.3 10.9 9.3
Personal deposit growth (%)
0.3 0.4 4.4
Commercial banking revenue ($ millions)
1,352 1,274 1,208
Commercial loan growth*(%)
8.1 6.4 4.3
Commercial deposit growth (%)
10.0 7.6 11.1
Cards revenue ($ millions)
928 936 798
Cards loan growth (%)
12.0 7.0 7.4
Cash productivity ratio
56.1 56.6 57.2
Revenue growth (%)
3.6 6.0 7.3
Employee engagement index**
75 73 72
*Includes acceptances and securitized loans.
**
Source: BMO’s Annual Employee Survey, conducted by Burke Inc.,
an independent research company.