Bank of Montreal 2007 Annual Report Download - page 9

BMO Financial Group 190th Annual Report 2007 5
and management oversight has been strengthened. I made the commitment earlier
this year that this was a one-time, one-location event, and this is a commitment
we intend to keep.
In the last two quarters we have seen, at the same time, highly unsettled debt
markets and a global revaluation of financial assets. While this was triggered by
the issues in the U.S. subprime mortgage market, it brought attention to a broader
mis-pricing of financial risk. Our exposure to subprime is indirect and very limited,
but all markets have been affected and will likely exhibit continuing uncertainty about
price and liquidity going into the next year.
Against this backdrop, our confidence in the future is confirmed by the strength
of our balance sheet and the demonstrated capacity of the core operating businesses
to grow revenue and net income. In BMO Capital Markets, where the difficult issues
of the year were centred, the impact was cushioned by better performance in
the issuing client business, investment and corporate banking. We continue to focus
on a strong North American base of mid-market clients where our expertise in
M&A, debt and equity, lending and operating services can combine in a stable high
return on equity business. The institutional trading business, where much of the
market risk activity is centred, remains critical to our clients’ execution needs but
will
follow a strategy to reduce future volatility from the levels of the past 12 months.
“…our history has been defined by the periods of greatest change,
when we have seized the opportunity to do things in a different way
and challenged conventional practices.”
We are expecting Personal and Commercial Banking and our wealth management
businesses in Canada and the United States to generate increased levels of
growth at attractive rates of return. Following a period of sustained reinvestment
in people and facilities, we are committed to faster growth in our customer base,
in loans and deposits and in invested assets under management. In Canada, we have
been building new branches, upgrading existing branches, and improving our cus-
tomer access to bank machines, telephone banking and online banking and investing.
In the United States, we added 30 branches to our base of 202 and announced
the further acquisition of 40 branches, which when completed will represent a 35%
expansion since the beginning of fiscal 2007.
But the most important element in the pursuit of growth is our relationship
with our customers. We hear them telling us, in so many ways, that managing their
finances is often too complex and they want our help in making better decisions.
We are no longer asking what are the products and services that we might sell to
customers, we are asking what it is that our customers want and what will we
do to help them make better financial decisions. How can we help them buy their
first home, save for the college education of their children, support or assist
aging parents, prepare for retirement –on their terms.