Bank of Montreal 2010 Annual Report Download - page 108

SUPPLEMENTAL INFORMATION
Supplemental Information
106 BMO Financial Group 193rd Annual Report 2010
Table 20: Contractual Obligations ($ millions)
Less than 1 to 3 3 to 5 Over 5 No fixed
As at October 31, 2010 one year years years years maturity Total
On-Balance Sheet Financial Instruments
Deposits (1) 101,218 23,181 6,907 4,850 109,119 245,275
Subordinated debt (2) 200 411 390 4,566 – 5,567
Capital trust securities (2) 440 413 – – – 853
Other financial liabilities (2) 54,715 23 41 2,517 332 57,628
(1) Deposits exclude interest payments as well as structured notes designated under the fair value option.
(2) Includes interest payments.
Less than 1 to 3 3 to 5 Over 5 No fixed
As at October 31, 2010 one year years years years maturity Total
Off-Balance Sheet Financial Instruments
Commitments to extend credit (1) 22,393 22,102 4,694 2,282 – 51,471
Operating leases 249 410 268 593 – 1,520
Financial guarantee contracts (1) 41,336 – – – – 41,336
Purchase obligations 225 438 279 77 – 1,019
(1) A large majority of our commitments to extend credit and financial guarantee contracts expire without being drawn upon. As a result, the contractual amounts may not be representative
of the funding likely to be required for these commitments. Further details on these obligations are included in Notes 6 and 7 on page 124 of the financial statements.
Table 21: Capital Adequacy ($ millions, except as noted)
Basel II basis Basel I basis (1)
As at October 31 2010 2009 2008 2007 2006
Tier 1 capital
Common shareholders’ equity 18,753 17,132 15,974 14,233 14,465
Non-cumulative preferred shares (2) (3) 2,571 2,571 1,996 1,446 1,046
Innovative Tier 1 capital instruments (2) 2,542 2,907 2,486 2,422 2,192
Non-controlling interest in subsidiaries 23 26 39 33 36
Goodwill and excess intangible assets (4) (1,619) (1,569) (1,635) (1,140) (1,098)
Accumulated net after-tax unrealized losses on available-for-sale equity securities – (2) (15) – –
Net Tier 1 capital 22,270 21,065 18,845 16,994 16,641
Securitization-related deductions (165) (168) (115) na na
Expected loss in excess of allowance (AIRB Approach) (5) – (61) – na na
Substantial investments and investments in insurance subsidiaries (7) (427) (374) na na na
Other deductions – – (1) na na
Adjusted Tier 1 capital 21,678 20,462 18,729 16,994 16,641
Tier 2 capital
Subordinated debt 3,776 4,236 4,175 3,335 2,306
Trust subordinated notes 800 800 800 800 –
Accumulated net after-tax unrealized gains on available-for-sale equity securities 10 – – 26 –
Eligible portion of general allowance for credit losses (5) (6) 292 296 494 898 905
Preferred shares of a subsidiary (3) – – – – 273
Total Tier 2 capital 4,878 5,332 5,469 5,059 3,484
First-loss protection na na na (85) (44)
Securitization-related deductions (29) (7) (6) na na
Expected loss in excess of allowance (AIRB Approach) (5) – (60) – na na
Investments in non-consolidated subsidiaries and substantial investments (7) (890) (868) (871) (994) (937)
Adjusted Tier 2 capital 3,959 4,397 4,592 3,980 2,503
Total capital 25,637 24,859 23,321 20,974 19,144
Risk-weighted assets 161,165 167,201 191,608 178,687 162,794
Capital ratios (%)
Tier 1 Capital Ratio 13.45 12.24 9.77 9.51 10.22
Total Capital Ratio 15.91 14.87 12.17 11.74 11.76
Assets-to-capital multiple 14.5 14.1 16.4 17.2 16.1
(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 are reflected as liabilities on the consolidated balance sheet, but are eligible for inclusion
in the capital calculation for regulatory purposes.
(3) In 2007, OSFI approved the reclas sification 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. The general allowance related to credit risk measured under the Standardized Approach is
included in Tier 2 capital, up to 1.25% of risk-weighted assets.
(6) Under Basel I, OSFI permits the inclusion of the lesser of the balance of the general allowance
for credit losses and 0.875% of risk-weighted assets.
(7)
Effective November 1, 2008, substantial investments are deducted 50% from Tier 1 capital and 50%
from Tier 2 capital. Previously these investments were deducted from Tier 2 capital. Investments in
insurance subsidiaries held prior to January 1, 2007 are deducted from Tier 2 capital. Effective 2012,
these investments in insurance subsidiaries will be deducted 50% from Tier 1 capital and 50% from
Tier 2 capital. In addition, incremental investments in insurance subsidiaries are immediately
deducted 50% from Tier 1 capital and 50% from Tier 2 capital.
na – not applicable