News Releases

• People's Bank of China grants licence that allows BMO clients to pay foreign suppliers directly in Yuan
• BMO's large corporate foreign exchange clients doing business in China will see an immediate cost savings

TORONTO and BEIJING, January 21, 2011 – BMO Financial Group continues to build on its longstanding presence in China with the announcement today that it has obtained a licence that will allow its North American commercial clients the ability to make payments directly to Chinese companies in the Chinese Yuan (CNY).

The new licence, which was granted to BMO by the People's Bank of China, makes BMO the first Canadian bank to offer this capability. Under the terms of the licence, BMO's corporate clients can now pay their foreign suppliers directly in the local currency. It will also give BMO's commercial customers the capacity to more efficiently manage the day-to-day flow with their Chinese suppliers and clients, and negotiate in the local currency.

“This will mark a significant change in the way our global clients will do business in China from now on,” said Jamie Thorsen, Global Head of Foreign Exchange Products and China Capital Markets, BMO Capital Markets.

“Ultimately, this new flexible payment capability will give our clients a competitive advantage. It is going to create significant cost savings, especially for our large, North American clients, who import from China and heavily rely on foreign exchange, global treasury management and trade finance products and services to grow and manage their business.”

Until recently, international trade in China had always been settled in U.S. dollars. But now, with the goal of increasing usage of CNY in international trade settlements, the Chinese government has initiated a project known as Cross-Border CNY Settlement.

“This is an extremely timely development given the rising economic importance of China to the world economy,” said Ms. Thorsen. “These evolutionary changes are creating extraordinary opportunities for our North American clients, who do business on the ground in China or intend to establish or expand their presence.”

BMO has been building relationships in China, almost as long as the bank has been in business. The bank undertook its first foreign exchange transaction in support of trade with China in 1818. Over time, BMO has achieved an impressive list of firsts:

Highlights of BMO's “Firsts” in China:

• In October 2010, BMO officially opened its new incorporated subsidiary, Bank of Montreal (China) Co. Ltd. (BMO ChinaCo). With local incorporation in China, BMO now has the flexibility to expand its product and service offerings for North American and Chinese clients.
• First Canadian bank to establish an investment banking representative office in China.
• First Canadian bank location in Guangzhou and Beijing to be granted a licence to provide RMB local currency service to both foreign and local companies in China.
• First Canadian bank to offer derivative services.
• First and only Canadian bank chosen as market maker for FX trading in China.
• First Canadian bank to price and trade FX forwards.
• First Canadian and first foreign bank to enter into arrangements with EBS (Electronic Brokering System) in China.

About BMO's Foreign Exchange Group
BMO's Foreign Exchange Group is a team of nearly 100 professionals based in eight cities around the world from Beijing to Chicago. The FX group holds a dominant position in the Canadian-dollar foreign exchange market and is top-ranked by large hedge funds and pension funds for institutional liquidity and pricing capacity. For more information, visit: www.bmocm.com/products/marketrisk/fx/

About BMO Capital Markets
BMO Capital Markets is a leading, full-service North American financial services provider offering equity and debt underwriting, corporate lending and project financing, merger and acquisitions advisory services, merchant banking, securitization, treasury management, market risk management, debt and equity research and institutional sales and trading. BMO Capital Markets has over 2,000 employees operating in 26 locations around the world, including 14 in North America. BMO Capital Markets is a member of BMO Financial Group (NYSE, TSX: BMO), one of the largest diversified financial services providers in North America with US$404 billion total assets and more than 38,000 employees as at October 31, 2010.

About BMO Financial Group in China
BMO Financial Group is the only Canadian bank with branches in Beijing, Guangzhou, Shanghai and Hong Kong, and was only the eighth foreign bank permitted to be headquartered in the capital. BMO also has a representative office in Taipei, Taiwan and an Investment Banking representative office in Beijing.

- 30 - 

Media Contacts:

Beja Rodeck, Toronto, beja.rodeck@bmo.com, (416) 867-4924 

David Mu, Guangzhou, david.mu@bmo.com, 86-20-3815-0238

Holly Holt, New York, holly.holt@bmo.com, (212) 885-4153

Ronald Monet, Montreal, ronald.monet@bmo.com, (514) 877-1873