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BMO Financial Group Becomes First Canadian Bank to be Granted Derivatives Licence in China

BMO Financial Group announced today it has become the first Canadian bank to be granted a licence to sell derivatives instruments in China.

The licence, issued by the China Banking Regulatory Commission (CBRC), will enable BMO to sell derivatives instruments in interest rates, foreign exchange, credit and other related structures to Chinese companies and financial institutions.

“This licence greatly enhances BMO’s capital markets businesses in China and will help leverage our number one foreign bank position in the foreign exchange markets in the country,” said David Hyma, Vice Chair and Head of Capital Markets, BMO Nesbitt Burns. “It is a great credit to our foreign exchange team in China that we are the first of the Canadian banks and one of only six foreign banks to be granted such a licence,” he added.

BMO’s capital markets group in China comprises of 10 professionals who provide a broad range of foreign exchange, fixed income and interest rate derivatives and related structures to corporate and institutional clients. In addition to its FX capabilities, BMO is a leading provider of credit derivatives. In 2003, Euromoney Magazine named BMO one of the Top 20 providers of credit default swaps to investors in Europe.

BMO has a long history in China dating back to the early 1800s when it completed its first foreign exchange transaction helping the United States finance its growing trade with China. This support for trade grew when BMO became one of the few North American banks to finance trade transactions in China during the 1960s. Today, BMO is the only Canadian bank with branches in Beijing, Guangzhou and Hong Kong, and was only the eighth foreign bank permitted to operate in the capital. In January 2002, BMO opened a representative office in Shanghai to assist clients in trade and investment activities, becoming the only Canadian bank to have a physical presence in the Chinese financial centre.

About BMO Financial Group
Established in 1817 as Bank of Montreal, BMO Financial Group (TSX, NYSE: BMO) is a highly diversified financial services organization. With total assets of $262 billion (Cdn.) as at July 31, 2004 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 through its Canadian retail arm BMO Bank of Montreal and BMO Nesbitt Burns, a leading full-service investment firm. In the United States, BMO serves clients through Harris, an integrated financial services organization that provides 1.5 million personal, business, corporate and institutional clients with banking, lending, investing, financial planning, trust administration, portfolio management, family office and wealth transfer services. BMO operates branches in Beijing, Guangzhou, Hong Kong and has a representative office in Shanghai.