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BMO Financial Group will be at the forefront as Canada enters the North American Century, Chairman and Chief Executive Officer, Tony Comper said today at the organization’s 185th annual meeting in Ottawa.
“As a leading, Canadian-headquartered, Canada-U.S. bank, our growth strategy is to invest in our core Canadian franchise – which is our enduring primary strength – while expanding selectively and substantially in high-growth U.S. markets, said Comper.”
“At BMO Financial Group, we believe that when it comes to trade and investment, Canadians and Americans have embarked on a new era that will be characterized as ‘the North American Century’ – and we have staked out a pioneer role as a century builder.”
BMO Financial Group is at the forefront of the drive by Canadian firms to operate successfully in the United States. Last year, 33 per cent of BMO’s revenues were generated in the U.S., and, with more than $75 billion in average U.S. assets, the organization has the highest asset base of any Canadian financial institution in the U.S. BMO serves almost two million customers in the U.S., in addition to its more than six million Canadian customers.
As the U.S. banking industry undergoes a wave of consolidation similar to what took place in Canada many decades ago, BMO is exceptionally well placed to improve its existing transnational advantage – which began in 1984 with the acquisition of Chicago-based Harris Bank.
“We are now in an ideal position to accelerate U.S. growth. Having transformed Harris Bank into the full-service, multi-channel bank it is today, we are now focused on making it the premier bank in greater Chicago – with 13 of 50 planned new branches slated to open this calendar year,” said Comper. BMO is committed to expanding to a least 200 branches in Chicago and the surrounding Midwest region.
Comper also spoke of BMO’s decided advantage in the wealth management arena, where the organization is leveraging Harris Bank’s U.S. reputation as a pre-eminent private banker to build a significant North American presence.
Over the past four years, BMO has acquired and integrated 9 U.S. wealth management properties worth $1.4 billion. BMO is now the sixth largest direct investing firm in North America, and it has set a plan in the U.S. to offer a full range of wealth management products and services to investors in targeted high-growth locations.
“In these early days of the North American Century, awaiting the turnaround in the U.S. that we all know is coming, BMO is currently poised to serve this market in 20 key locations around the U.S., all having large concentrations of people with significant investments to manage,” said Comper.
“Our corporate and investment banking team, known in the U.S. as Harris Nesbitt, is also further extending its reach into the Midwest, coming to market with a rare combination of advantages – Harris Bank’s many warm, often multigenerational relationships with mid-market clients who appreciate their longstanding expertise, and BMO Nesbitt Burns’ acknowledged leadership in investment banking.”
Comper also highlighted an additional strength that BMO brings to the transnational economic space: the organization has integrated the expertise, experience and best practices acquired on both sides of the border, and its North American management team is already firmly in place.
“While extending our North American footprint over the past four years, we have also made a lot of strategic progress in transforming our business mix in order to build a stronger future. We have exited unprofitable, low-profit or low-potential businesses and re-deployed the capital and other resources to businesses with greater possibilities for high returns, and reduced lower-return risk weighted assets by $29 billion. We rolled out a major new technology platform for retail banking in Canada that revolutionizes our ability to serve customers, and increased both the quality and reach of our sales-and-service culture.”
As a result of these strategic initiatives, BMO is starting to achieve the intended results:
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BMO rose several positions in key performance measures in 2002. For example, to second from sixth in cash earnings-per-share growth;
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Improved 2002 relative performance and BMO’s ranking within its peer group;
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Made significantly improved operational efficiency the organization’s top priority for 2003;
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Major performance enhancement initiatives have been launched to increase revenues, rein in discretionary spending, reduce non-sales positions, and improve capacity to maximize service to customers;
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And, investments deemed critical to future profitability – for example, the investments made in sales staff and new technology with the intention of significantly boosting revenues in the cornerstone Canadian retail bank – were untouched.
Comper also pointed to BMO’s international reputation for leadership in financial disclosure and corporate governance as key components of the organization’s strength in the past, present and future.
“Success in the North American Century is not going to come easily for any enterprise, even a respected veteran like BMO, with our head start and our proven store of transnational banking strengths and skills. It is going to take prudence. It is going to take discipline. And it is going to take focus. Fortunately at this point in our history, we at BMO Financial Group are blessed with and empowered by all three. We look back on our past with pride, and we face our future with confidence.”
Established in 1817 as Bank of Montreal, BMO Financial Group (NYSE, TSX: BMO) is a highly diversified financial services organization. With average assets of $254 billion as at October 31, 2002 and more than 34,000 employees, BMO provides a broad range of retail banking, wealth management and investment banking products and solutions.
BMO Financial Group serves clients across Canada and in the United States through its Canadian retail arm BMO Bank of Montreal, Chicago-based Harris Bank, a major U.S. mid-west financial services organization which also has wealth management offices across the United States, and BMO Nesbitt Burns, one of Canada's leading full-service investment firms.
A full transcript of Comper’s speech may be found at www.bmo.com
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