Bank of Montreal 2008 Annual Report Download - page 118

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. Otherwise, fair value is determined using
other methods, such as analysis of discounted cash flows or market
prices for similar assets.
During the year ended October 31, 2008, we foreclosed on
impaired loans and received $45 million in real estate properties that
we classified as held for sale (no impaired loans were foreclosed in
2007). Assets held for sale are disposed of in an orderly fashion.
Our average gross impaired loans and acceptances were
$1,568 million for the year ended October 31, 2008 ($677 million in 2007).
Our average impaired loans, net of the specific allowance, were
$1,245 million for the year ended October 31, 2008 ($516 million in 2007).
During the years ended October 31, 2008, 2007 and 2006, we would
have recorded additional interest income of $102 million, $43 million
and $45 million, respectively, if we had not classified any loans as
impaired. Cash interest income on impaired loans of $nil was recog-
nized during the years ended October 31, 2008, 2007 and 2006.
Sale of Impaired Loans
During the year ended October 31, 2008, we recorded a net gain on the
sale of impaired loans of $2 million ($12 million in 2007).
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.
Notes
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
114 | BMO Financial Group 191st Annual Report 2008
Loans, including customers’ liability under acceptances and allowance for credit losses, by geographic region are as follows:
(Canadian $ in millions) Gross amount Specific allowance General allowance Net amount
2008 2007 2008 2007 2008 2007 2008 2007
By geographic region (1):
Canada $ 139,849 $ 145,765 $129 $ 105 $579 $ 587 $ 139,141 $ 145,073
United States 64,975 51,634 256 51 742 311 63,977 51,272
Other countries 11,918 4,844 41 1––11,877 4,843
Total $ 216,742 $ 202,243 $426 $ 157 $ 1,321 $ 898 $ 214,995 $ 201,188
(1) Geographic region is based upon the country of ultimate risk.
Loans, including customers’ liability under acceptances and allowance for credit losses, by category are as follows:
Credit card, consumer
Residential instalment and other Business and Customers’ liability
(Canadian $ in millions) mortgages personal loans government loans under acceptances Total
As at October 31 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007
Grossamountatendofyear $ 49,343 $ 52,429 $ 45,857 $ 37,682 $ 84,151 $ 62,650 $ 9,358 $ 12,389 $ 188,709 $ 165,150
Specific allowance at beginning of year $14$5$1$1$142$ 147 $–$–$ 157 $ 153
Provision for credit losses 511 332 218 733 74 ––1,070 303
Recoveries ––91 72 23 19 ––114 91
Write-offs (6) (2) (422) (287) (542) (102) ––(970) (391)
Foreign exchange and other –––(3) 55 4––55 1
Specific allowance at end of year 13 14 21411 142 ––426 157
General allowance at beginning of year 11 23 327 340 517 506 43 36 898 905
Provision for credit losses (3) (12) (85) (13) 350 68 (2) 7260 50
Foreign exchange and other ––––163 (57) ––163 (57)
General allowance at end of year 811 242 327 1,030 517 41 43 1,321 898
Total allowance $21$25$ 244 $ 328 $ 1,441 $ 659 $41$43$ 1,747 $ 1,055
Netamountatendofyear $ 49,322 $ 52,404 $ 45,613 $ 37,354 $ 82,710 $ 61,991 $ 9,317 $ 12,346 $ 186,962 $ 164,095
Restructured loans of $3 million were classified as performing during the year ended
October31,2008($3millionin2007).Norestructuredloanswerewrittenoffintheyears
ended October 31, 2008 and 2007.
Included in loans as at October 31, 2008 are $78,782 million ($56,356 million in 2007) of loans
denominatedinU.S.dollarsand$2,608million($1,909millionin2007)ofloansdenominatedin
other foreign currencies.
Impaired loans, including the related allowances, are as follows:
(Canadian $ in millions) Gross impaired amount Specific allowance Net of specific allowance
2008 2007 2008 2007 2008 2007
Residential mortgages $224 $ 126 $ 13 $ 14 $ 211 $ 112
Consumer instalment and other personal loans 182 55 21180 54
Business and government loans 1,981 539 411 142 1,570 397
Total $ 2,387 $ 720 $426 $ 157 $ 1,961 $ 563
By geographic region (1):
Canada $803 $ 454 $129 $ 105 $ 674 $ 349
United States 1,494 262 256 51 1,238 211
Other countries 90 441 149 3
Total $ 2,387 $ 720 $426 $ 157 $ 1,961 $ 563
(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 $68 million and $58 million as at October 31, 2008 and 2007, respectively.