Bank of Montreal 2008 Annual Report Download - page 149

Provisions for Credit Losses
Provisions for credit losses are generally allocated to each group based
on expected losses for that group over an economic cycle. Differences
between expected loss provisions and provisions required under GAAP
are included in Corporate Services.
Inter-Group Allocations
Various estimates and allocation methodologies are used in the prepara-
tion of the operating groups’ financial information. We allocate expenses
directly related to earning revenue to the groups that earned the related
revenue. Expenses not directly related to earning revenue, such as
overhead expenses, are allocated to operating groups using allocation
formulas applied on a consistent basis. Operating group net interest
income reflects internal funding charges and credits on the groups’ assets,
liabilities and capital, at market rates, taking into account relevant
terms and currency considerations. The offset of the net impact of
these charges and credits is reflected in Corporate Services.
Geographic Information
We operate primarily in Canada and the United States but we also
have operations in the United Kingdom, Europe, the Caribbean and Asia,
which are grouped in Other countries. We allocate our results by geo-
graphic region based on the location of the unit responsible for managing
the related assets, liabilities, revenues and expenses, except for the
consolidated provision for credit losses, which is allocated based upon
the country of ultimate risk.
Notes
BMO Financial Group 191st Annual Report 2008 | 145
Our results and average assets, grouped by operating segment and geographic region, are as follows:
P&C P&C Corporate United Other
(Canadian $ in millions) Canada U.S. PCG BMO CM Services (1) Total Canada States countries
2008 (2)
Net interest income $ 3,236 $ 748 $ 671 $ 1,179 $ (747) $ 5,087 $ 3,662 $ 1,110 $ 315
Non-interest revenue 1,801 242 1,396 1,233 446 5,118 3,951 1,181 (14)
Total Revenue 5,037 990 2,067 2,412 (301) 10,205 7,613 2,291 301
Provision for credit losses 341 43 4 117 825 1,330 340 942 48
Non-interest expense 2,790 802 1,477 1,752 73 6,894 5,011 1,710 173
Income before taxes and non-controlling
interest in subsidiaries 1,906 145 586 543 (1,199) 1,981 2,262 (361) 80
Income taxes 586 49 191 (149) (748) (71) 199 (196) (74)
Non-controlling interest in subsidiaries – – – – 74 74 55 19 –
Net Income $ 1,320 $ 96 $ 395 $ 692 $ (525) $ 1,978 $ 2,008 $ (184) $ 154
Average Assets $ 125,763 $ 26,924 $ 8,237 $ 233,873 $ 2,812 $ 397,609 $ 236,495 $ 129,260 $ 31,854
Goodwill (As at) $ 105 $ 1,070 $ 349 $ 109 $ 2 $ 1,635 $ 424 $ 1,192 $ 19
2007 (2)
Net interest income $ 3,066 $ 730 $ 612 $ 974 $ (539) $ 4,843 $ 3,615 $ 923 $ 305
Non-interest revenue 1,678 178 1,440 995 215 4,506 3,843 589 74
Total Revenue 4,744 908 2,052 1,969 (324) 9,349 7,458 1,512 379
Provision for credit losses 323 35 3 77 (85) 353 257 99 (3)
Non-interest expense 2,644 693 1,446 1,574 244 6,601 4,788 1,656 157
Income before taxes and non-controlling
interest in subsidiaries 1,777 180 603 318 (483) 2,395 2,413 (243) 225
Income taxes 510 64 208 (99) (494) 189 415 (199) (27)
Non-controlling interest in subsidiaries – – – – 75 75 55 20 –
Net Income $ 1,267 $ 116 $ 395 $ 417 $ (64) $ 2,131 $ 1,943 $ (64) $ 252
Average Assets $ 119,164 $ 23,477 $ 7,091 $ 207,084 $ 3,759 $ 360,575 $ 216,572 $ 111,150 $ 32,853
Goodwill (As at) $ 106 $ 628 $ 313 $ 91 $ 2 $ 1,140 $ 423 $ 717 $ –
2006 (2)
Net interest income $ 2,941 $ 739 $ 570 $ 773 $ (279) $ 4,744 $ 3,617 $ 981 $ 146
Non-interest revenue 1,639 166 1,324 2,007 105 5,241 3,697 1,375 169
Total Revenue 4,580 905 1,894 2,780 (174) 9,985 7,314 2,356 315
Provision for credit losses 314 30 3 79 (250) 176 179 (2) (1)
Non-interest expense 2,569 678 1,363 1,612 131 6,353 4,526 1,695 132
Income before taxes and non-controlling
interest in subsidiaries 1,697 197 528 1,089 (55) 3,456 2,609 663 184
Income taxes 537 80 187 237 (324) 717 560 171 (14)
Non-controlling interest in subsidiaries – – – – 76 76 55 21 –
Net Income $ 1,160 $ 117 $ 341 $ 852 $ 193 $ 2,663 $ 1,994 $ 471 $ 198
Average Assets $ 114,364 $ 21,890 $ 6,545 $ 161,811 $ 4,521 $ 309,131 $ 191,929 $ 90,317 $ 26,885
Goodwill (As at) $ 93 $ 582 $ 323 $ 98 $ 2 $ 1,098 $ 410 $ 688 $ –
(1) Corporate Services includes Technology and Operations.
(2) Operating groups report on a taxable equivalent basis –see Basis of Presentation section.
Prior years have been restated to give effect to the current year’s organizational structure and
presentation changes.