Tony Comper, President and Chief Executive Officer, BMO Financial Group, told an audience of analysts at the Scotia Capital Financials Summit in Toronto today that BMO Financial Group is making substantial investments in its businesses to drive more aggressive future growth and substantially increase returns to shareholders.
“BMO has delivered a strong showing in total returns to shareholders over the past 20 years, delivering an average annual TSR of 16.4% as of the end of the third quarter,” he said. “We also have a good track record for increasing sustainable earnings per share.”
In May, BMO increased its target dividend payout range to an industry-leading 45% - 55% of net income available to commons shareholders. “This increase, which was made possible by the stability of our earnings, reflects our confidence in our continued ability to increase earnings and our strong capital position,” said Mr. Comper.
Mr. Comper said that BMO's board and leadership team are “very serious about achieving our vision to become the top-performing financial services provider in North America.
“[In Canada], we have taken actions to improve spread and are very pleased with the response to our simplified personal deposit product offering. Cross selling is a priority, and bookings of lines of credit and credit cards have been showing encouraging results in recent months,” said Mr. Comper. He also stated, “With the recent announcement of our intention to purchase bcpbank Canada, increasing our presence in multicultural markets in the high-growth Toronto area, we also showed our determination to seize opportunities for profitable growth in retail banking."
In addition to its retail banking initiatives, Mr. Comper said the bank has built a very strong wealth management platform which includes an established full-service brokerage, top-ranked direct broker, top-ranked private bank, and BMO's fast-growing mutual fund business, where assets have grown more than 75% in the past three years.
Mr. Comper said that the rebranding of BMO Capital Markets, the new name that unites BMO's investment banking functions in both Canada and the United States “signifies our commitment to provide a full range of investment banking capabilities to clients in North American and other key international markets.
“In Canada the focus is on cost-effective growth of our superb, diversified franchise as we extend our expertise to other markets. We are also making good progress in refining our sector focus in the United States to match product and service capabilities to high-growth opportunities. We believe we can accelerate growth by offering a full range of capabilities to our target sectors.”
“We are also making very significant investments in our U.S. retail bank,” said Mr. Comper. “In August, we completed the conversion of the Mercantile acquisition to the Harris technology platform. From now on, all existing Harris branches will be operating on the same advantaged platform, marking the end of a major undertaking that began two years ago with the consolidation of individual bank charters. And we are ready and able to absorb future acquisitions more quickly and cost-effectively.”
Mr. Comper also noted that the bank is making small but significant strategic investments in China as its financial services market gets ready for explosive growth. “Our modest investments in China do not yet make a significant contribution to our bottom line and, quite frankly, they are unlikely to have a material impact on returns for a number of years to come,” said Mr. Comper. “Nonetheless, we believe we are exceptionally well positioned to take advantage of China's enormous growth. And, as global markets evolve, we will continue to invest prudently to position BMO for lasting success.
Mr. Comper's full presentation and speaking notes are available by accessing the bank's Internet website at www.bmo.com/investorrelations
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The speech will be available at:
http://www2.bmo.com/speech/article/0,1087,contentCode-5851_divId-4_langId-1_navCode-124,00.html