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100 | BMO Financial Group 191st Annual Report 2008
Supplemental Information
SUPPLEMENTAL INFORMATION
Table 20: Contractual Obligations ($ millions)
Less than 1 to 3 4 to 5 Over 5 No fixed
As at October 31, 2008 one year years years years maturity Total
On-Balance Sheet Financial Instruments
Deposits 116,297 26,146 8,942 5,767 99,448 256,600
Derivative obligations 345 603 320 294 – 1,562
Subordinated debt (1) 368 693 434 5,408 – 6,903
Capital trust securities 78 868 413 – – 1,359
Preferred share liability 253––––253
Other financial liabilities (1) 41,167 228 265 3,560 42 45,262
158,508 28,538 10,374 15,029 99,490 311,939
Off-Balance Sheet Obligations
Commitments to extend credit 41,113 21,270 16,953 1,772 – 81,108
Operating leases 211 337 233 629 – 1,410
Purchase obligations 296 589 491 266 – 1,642
41,620 22,196 17,677 2,667 – 84,160
Total 200,128 50,734 28,051 17,696 99,490 396,099
(1) Includes interest payments.
Table 21: Capital Adequacy ($ millions, except as noted)
Basel II basis Basel I basis (1)
As at October 31 2008 2007 2006 2005 2004
Tier 1 capital
Common shareholders’ equity 15,974 14,233 14,465 13,246 12,120
Non-cumulative preferred shares (2) (3) 1,996 1,446 1,046 1,046 1,046
Innovative Tier 1 capital instruments (2) 2,486 2,422 2,192 2,192 1,745
Non-controlling interest in subsidiaries 39 33 36 37 44
Goodwill and excess intangible assets (4) (1,635) (1,140) (1,098) (1,091) (1,507)
Accumulated net after-tax unrealized loss from available-for-sale equity securities (15) ––––
Net Tier 1 capital 18,845 16,994 16,641 15,430 13,448
Securitization-related deductions (115) na na na na
Expected loss in excess of allowance (AIRB Approach) (5) –na na na na
Other deductions (1) na na na na
Adjusted Tier 1 capital 18,729 16,994 16,641 15,430 13,448
Tier 2 capital
Preferred shares of a subsidiary (3) –– 273 287 296
Subordinated debt 4,175 3,335 2,306 2,130 1,783
Trust subordinated notes 800 800 – – –
Accumulated net after-tax unrealized gain from available-for-sale equity securities –26–––
Eligible general allowance for credit losses (5) (6) 494 898 905 958 1,010
Total Tier 2 capital 5,469 5,059 3,484 3,375 3,089
First-loss protection na (85) (44) (123) (128)
Securitization-related deductions (6) na na na na
Expected loss in excess of allowance (AIRB Approach) (5) –na na na na
Investments in non-consolidated subsidiaries/substantial investments (7) (871) (994) (937) (963) (901)
Other deductions –na na na na
Adjusted Tier 2 capital 4,592 3,980 2,503 2,289 2,060
Total capital 23,321 20,974 19,144 17,719 15,508
Risk-weighted assets 191,608 178,687 162,794 149,855 136,661
Capital ratios (%)
Tier 1 Capital Ratio 9.77 9.51 10.22 10.30 9.84
Total Capital Ratio 12.17 11.74 11.76 11.82 11.35
Assets-to-capital multiple 16.4 17.2 16.1 16.3 16.8
(1)
Beginning in fiscal 2008, capital is calculated under the Basel II guidelines, whereas for all
prior periods
capital is calculated using the Basel I methodology.
(2) Non-cumulative preferred shares and Innovative Tier 1 capital instruments include amounts
that were reclassified to liabilities on the consolidated balance sheet, but are eligible for
inclusion in the capital calculation for regulatory purposes.
(3) In 2007, the Office of the Superintendent of Financial Institutions (OSFI) approved the
reclassification of preferred shares issued by a subsidiary from Tier 2 capital to Innovative
Tier 1 capital.
(4) In addition to goodwill, intangible assets in excess of 5% of gross Tier 1 capital are deducted
from Tier 1 capital.
(5) When expected loss as calculated under the Advanced Internal Ratings Based (AIRB)
Approach exceeds total provisions, 50% of the difference is deducted from Tier 1 capital and
50% from Tier 2. When the expected loss is less than total provisions, the difference is added
to Tier 2 capital.
(6) Under Basel I, OSFI permits the inclusion of the lesser of the balance of our general allowance
for credit losses and 0.875% of risk-weighted assets.
(7) Under Basel II transitional rules, 100% of substantial investments and investments in
insurance subsidiaries held prior to January 1, 2007 are deducted from Tier 2 capital. Effective
November 1, 2008, 50% of substantial investments will be deducted from Tier 1 capital
and 50% from Tier 2 capital. Effective November 1, 2011, equivalent deductions will apply
to investments in insurance companies.
na –not applicable