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BMO Financial Group continues its consistent, focused strategy as it builds on its strong growth momentum and performance in Canada and the United States, Chairman and CEO Tony Comper said today in a presentation to an institutional investor conference in Quebec City.

“Over the past four years we have made some tough choices to position BMO for a more profitable future, shifting our overall business mix in favour of high return, high potential businesses,” said Mr. Comper. “Now, financial results demonstrate that our choices and our consistent focused growth strategy are starting to yield significant results. With rising performance across all three operating groups, we’re gaining momentum.”

BMO’s recent strong third quarter results – including a 46 per cent increase in net income year-over-year and a return on equity of 18 per cent – mark the fifth consecutive quarter of rising earnings. BMO’s revenue growth is above its Canadian peer group average and it has generated a 28 per cent increase in earnings per share so far this year.

“Our goal is to be a top-tier North American bank in terms of financial performance,” he said. “We will achieve this through continued execution of our focused Canada-U.S. growth strategy, investing in our Canadian franchise – the foundation of this enterprise - while growing and expanding in some of the most lucrative markets in the U.S. to further strengthen our Harris franchise.”

The U.S. franchise encompasses a strong asset base of $76 billion, a solid retail platform in the greater Chicago area, a growing commercial business in the Midwest, and a state-of-the-art direct brokerage platform, all distinguished by the excellent reputation of the Harris brand under which all U.S. businesses now operate.

Almost 30 per cent of BMO’s revenues come from the U.S. franchise and as the organization continues to expand in the U.S. over the next five years, it expects this proportion to grow.

In addition, BMO recently revised its guidance for the year, increasing its anticipated earnings per share growth to between 15 to 20 per cent, up from 10 to 15 per cent and increasing the estimate for return on equity to 15 to16 per cent – up from 14 to15 per cent.  Given favourable credit performance this year, BMO now estimates that the annual provision for credit losses will be at or below $500 million, down from its previously reduced guidance of $600 million.

Mr. Comper also reiterated that productivity improvement will remain the organization’s top priority, pointing to an improvement in the cash productivity ratio in the third quarter of 550 basis points, year-over-year.

“With the combination of rising revenues and effective cost containment, we are confident we will reach our goal of lowering the cash productivity ratio in each of the operating groups by 150 to 200 basis points for the year and maintain a  similar rate of progress in improving the cash productivity ratio in 2004 and beyond,” he said.

Established in 1817 as Bank of Montreal, BMO Financial Group (TSX, NYSE: BMO) is a highly diversified North American financial services organization. It includes BMO Bank of Montreal, its Canadian retail arm, Chicago-based Harris Bank, a major Midwest financial services provider, BMO Nesbitt Burns, one of Canada’s largest full-service investment firms, and Harris Nesbitt, BMO’s U.S. investment banking operation.

A full transcript of Mr. Comper’s speech may be found at www.bmo.com/investorrelations.

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