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BMO Financial Group 191st Annual Report 2008 | 5
PRESIDENT AND CHIEF EXECUTIVE OFFICER’S MESSAGE
Update to Shareholders
In reflecting on the 2008 fiscal year, my starting point must be to recognize that it has been a period of
fundamental instability in financial markets –a time when many of the world’s economies were pushed
into recession. The impact on financial markets has been pervasive, affecting the cost of funds and liquidity.
It has also affected our customers and much of the hard work of the bank in 2008 was directed to helping
them respond to this changing environment.
The conditions affected us as well. But, at the same time, this year confirmed the strength and diversity
of BMO Financial Group’s businesses.
We turned in a solid financial performance with close to $2 billion in net income and a Tier 1 Capital Ratio
of 9.77 per cent –and we improved customer loyalty and market share in key product lines. Equally important,
we made significant progress against our stated agenda and, as a result, we are better positioned –both
for a period of low or negative economic growth and for the ultimate recovery.
The earning power of our company is driven by customers.
The actions we have taken to look at banking and the impact of the changing environment through our
customers’ eyes represent a fundamental shift underway at BMO. We enhanced the clarity of our position
in the marketplace with a well-defined promise –to help our customers make sense of their finances
and to take away complexity.
Our consistent approach to customers will allow us to continue to grow customer loyalty and market share –
and, as a result, grow earnings and maintain our strong balance sheet.
We began dealing early and effectively with the challenges
of the current environment.
Eighteen months ago we launched a review of how we measure and manage risk at BMO. The work we did
confirmed significant strengths –particularly with respect to the management of credit risk.
We also identified opportunities for improvement and immediately embarked on a program that focuses
on areas of emerging risk and builds our capabilities for the future.
Under the direction of our newly appointed Chief Risk Officer we increased our capability and people skills
and realigned the entire risk organization –we did this with the businesses. The risk team worked on building
ownership with more clearly defined accountabilities. Risk transparency was emphasized throughout
the organization with improved reporting of the per formance of business units.
Our Customers. Our Strength.
WILLIAM A. DOWNE
PRESIDENT AND CHIEF EXECUTIVE OFFICER