Bank of Montreal 2010 Annual Report Download - page 50

MANAGEMENT’S DISCUSSION AND ANALYSIS
Personal and Commercial Banking U.S.
We serve nearly 1.3 million customers, working together with other Harris and BMO businesses in select U.S. Midwest
markets to deliver clarity to our customers in the form of simplicity, guidance and financial know-how. Our retail and
small business customers are served through 312 branches, an award-winning call centre, online banking and more
than 880 automated banking machines. We deliver financial expertise to our commercial banking customers through
a full range of lending products, in-depth specific industry knowledge and strategic capital markets solutions.
Ellen Costello
President and Chief Executive Officer
Personal and Commercial Banking U.S.
and Harris Financial Corp.
” Our focus is on customers and
their experience at Harris.
We have a position in the market
that is differentiated and supports
long-term, profitable growth.”
Our Strategies
• Focus on acquiring new customers while capitalizing on
attractive merger and acquisition opportunities.
• Build the leading U.S. Midwest commercial bank, focused on
acquiring and retaining high-quality clients.
• Improve the effectiveness of our distribution capabilities,
responding to evolving customer expectations.
•
Partner with Private Client Group to grow the wealth
management business within our customer base.
•
Drive individual and team productivity through rigorous
performance and talent management.
Our Path to Differentiation
• A customer-focused culture centred on understanding and
responding to our customers’ most important financial needs.
• A one-team mindset that brings the entire organization’s
capabilities to our customers.
• Effective sales management and leadership that drive our
sales and service employees to excel.
• A disciplined, transparent performance management system
that supports our business objectives, motivates employees
and rewards top performance.
• A strong brand signifying strength, stability and helpfulness.
Key Performance Metrics and Drivers 2010 2009 2008*
Average US$ loan growth (%) (1) (14.1) (2.4) 10.8
Average US$ deposit growth (%) (1.1) 17.6 8.4
Operating leverage (US$) (%) (8.9) 1.8 (6.7)
Core operating leverage (US$) (%) (2) (4.5) 1.9 3.4
Number of branches 312 280 281
Personal Banking Net Promoter Score (3) 40 43 42
Serviced mortgage portfolio growth (%) 5.6 13.3 39.7
Employee engagement index (4) 71 74 74
(1) Based on current loans.
(2) Excludes the impact of impaired loans, Visa and acquisition integration.
(3) A measure of the strength of customer loyalty. Commercial Banking does not have
a comparable measure on a consolidated basis.
(4) Source: BMO Annual Employee Survey, conducted by Burke Inc., an independent
research company.
* Loan and deposit growth and operating leverage in fiscal 2008 have not been restated
for the impact of the 2010 portfolio transfer from BMO Capital Markets to P&C U.S.
Strengths and Value Drivers
•
A rich heritage of more than 125 years in the U.S. Midwest with
the established Harris brand, a commitment to service excellence as
demonstrated by our strong customer loyalty scores and a history
of playing an active role in our customers’ local communities.
• A comprehensive and increasingly integrated distribution network,
supported by a differentiated customer experience.
•
A large-scale, relationship-based commercial banking business
based in the U.S. Midwest, with in-depth industry knowledge
in select sectors.
• Strong working relationships with our partners in Private Client Group
and BMO Capital Markets.
• Ability to leverage the capabilities and scale of BMO Financial Group.
Challenges
• The economic outlook continues to be uncertain, with relatively slow
improvement and modest expectations for increased loan demand
in 2011.
• Regulatory oversight has become increasingly complex with the
advent of new regulations and compliance requirements.
• Market dynamics remain competitive, as banks compete aggressively
on pricing for both loans and deposits to maintain and increase
market share.
Our Lines of Business
Personal Banking offers a full range of products and services
to con sumers and small businesses, including deposit and investment
services,
mortgages, consumer credit, small business lending and
other banking services.
We rank second in deposit market share in
the Chicago area and have a significant presence in the other markets
where we compete.
Commercial Banking provides mid-sized businesses with a broad range
of banking products and services, including lending, deposits, treasury
management and risk management. Segments of focus are business
banking, corporate finance, diversified industries, financial institutions,
food and consumer and commercial real estate. We also offer wealth
management and investment banking services through our partners in
Private Client Group and BMO Capital Markets.
Caution
This Personal and Commercial Banking U.S. section contains forward-looking statements.
Please see the Caution Regarding Forward-Looking Statements.
MD&A
48 BMO Financial Group 193rd Annual Report 2010