4th Quarter 2000 4th Quarter 2000 November 28, 2000 November 28, - PowerPoint PPT Presentation

4th Quarter 2000 4th Quarter 2000 November 28, 2000 November 28, 2000 Investor Community Investor Community Conference Call Conference Call

4th Quarter 2000 4th Quarter 2000 Tony Tony Comper Comper Chairman & CEO Chairman & CEO Strategic Update Strategic Update

BMO Performed Well Against BMO Performed Well Against Objectives Objectives Targets: Grow EPS by at least 10% and ROE by 1.0-1.5 percentage points Targets: Grow EPS by at least 10% and ROE by 1.0-1.5 percentage points EPS ($)Excluding Non-recurring Items EPS ($)Excluding Non-recurring Items Reported EPS ($) Reported EPS ($) 6.56 39% 16% 5.88 5.07 4.72 F1999 F2000 F1999 F2000 ROE (Percentage Points) Excluding Non- ROE (Percentage Points) Excluding Non- Reported ROE (Percentage Points) Reported ROE (Percentage Points) recurring Items recurring Items 18.0% 3.9 1.0 16.1% 15.1% 14.1% F1999 F2000 F1999 F2000 2

Targeting Top-Quartile Targeting Top-Quartile Shareholder Returns Shareholder Returns Five-Year Total Shareholder Return (%) Five-Year Total Shareholder Return (%) 3 5 3 0 23.3 2 5 % 26.1 22.9 2 0 22.2 22.0 1 5 1 0 1996 1997 1998 1999 2000 BMO Cdn. Peer Group N.A. Peer Group 3

Efficient Capital Management Efficient Capital Management Recent Divestitures Recent Divestitures ($226 million of gains) ($226 million of gains) Partners First Partners First G (gain of $112 million) (gain of $112 million) Risk-Weighted Assets Corporate Trust Corporate Trust Risk-Weighted Assets G (gain of $74 million) (gain of $74 million) Down $2.6 billion Down $2.6 billion Branch Sales Branch Sales G (gain of $40 million*) (gain of $40 million*) * Excludes gain on sale of 4 * Excludes gain on sale of 4 branches not yet closed branches not yet closed 4

Next Stage - Accelerating Shift Next Stage - Accelerating Shift to Priority Markets to Priority Markets F2000 (as reported) Personal and Commercial Personal and Commercial F2000 (as reported) Small business Small business Cash ROE: 25% Cash ROE: 25% Commercial banking Commercial banking Capital growth: 17% Capital growth: 17% Consumer banking Consumer banking Private Client F2000 (as reported) Private Client F2000 (as reported) Wealth management Wealth management Cash ROE: 37% Cash ROE: 37% Capital growth: 28% Capital growth: 28% E-Business E-Business North America’s First: North America’s First: On-line bank On-line bank Wireless bank Wireless bank 5

Building our U.S. Wealth Building our U.S. Wealth Management Franchise Management Franchise BCL Securities Freeman Welwood Chicago Seattle Milwaukee Cleveland Bellevue Detroit Tacoma Spokane Portland San Francisco Denver Salt Lake City Phoenix Honolulu Harris Private Bank Chicagoland (9 offices), Ft. Myers, Phoenix, Sarasota, Tucson, Naples, Scottsdale, Vero Beach, Sun City, West Palm Beach, Carefree 6

Exponential Grow th in Exponential Grow th in Wireless Market Wireless Market G Online customers up 129% to 830,000 (adding 20,000/month) G Online customers up 129% to 830,000 (adding 20,000/month) G North America’s leader in wireless North America’s leader in wireless G North America’s leader in wireless financial services financial services financial services G $30 million investment by G $30 million investment by Telus for 5% stake implies Telus for 5% stake implies significant valuation for significant valuation for EPOST EPOST www.epost epost.com .com www. www.eposte eposte.com .com www. 7

Providing More Detailed Providing More Detailed Financial Targets Financial Targets Targets for 2001 (excluding non-recurring items): Targets for 2001 (excluding non-recurring items): G EPS growth (fully diluted) of 10 to 15 per cent G EPS growth (fully diluted) of 10 to 15 per cent G ROE of 17.0 to 17.5 per cent G ROE of 17.0 to 17.5 per cent G Revenue growth of 7 to 9 per cent G Revenue growth of 7 to 9 per cent G Expense-to-revenue ratio and provision for credit G Expense-to-revenue ratio and provision for credit losses consistent with 2000 levels losses consistent with 2000 levels G A tax rate (tax equivalent-basis) averaging G A tax rate (tax equivalent-basis) averaging approximately 37 per cent approximately 37 per cent G Modest growth in risk-weighted assets G Modest growth in risk-weighted assets G Tier 1 capital ratio of at least 8.0 per cent G Tier 1 capital ratio of at least 8.0 per cent G An asset and securities to total assets ratio An asset and securities to total assets ratio G An asset and securities to total assets ratio consistent with the 2000 ratio consistent with the 2000 ratio consistent with the 2000 ratio 8

Top-Quartile Asset Quality Top-Quartile Asset Quality PCL as % of Average PCL as % of Average PCL as % of Average Loans and Acceptances Loans and Acceptances Loans and Acceptances 2.0 1.6 1.2 % 0.8 North North America* America* Canada* Canada* 0.4 BMO BMO 0.0 90 91 92 93 94 95 96 97 98 99 Q1/00 Q2/00 Q3/00 Q4/00 * Peer Group * Peer Group 9

Over a Decade of Strong Over a Decade of Strong Performance Performance Achieved 11 consecutive years of record earnings Achieved 11 consecutive years of record earnings G Only major North American bank to deliver return on equity Only major North American bank to deliver return on equity G above 14% for 11 straight years above 14% for 11 straight years EPS EPS 6.56 6.8 5.8 5.14* 4.66 4.62 4.8 $ 4.13 3.38 3.8 2.97 2.55 2.36 2.8 2.31 2.10 1.8 90 91 92 93 94 95 96 97 98 99 OO 10 *Before one-time charge *Before one-time charge

Fiscal 2000 Fiscal 2000 Karen Maidment Maidment Karen EVP & CFO EVP & CFO Financial Results Financial Results

Q4 Fiscal 2000 Q4 Fiscal 2000 Karen Maidment Maidment Karen EVP & CFO EVP & CFO Financial Results Financial Results

Year: Financial Performance Year: Financial Performance Growth Yr / Yr Fiscal 2000 Increase % Reported Net Income ($MM) 1,857 475 34 1.84 Earnings Per Share - FD ($) 6.56 39 18.0 3.9 Return On Equity (%) Excluding Non-recurring Items Net Income ($MM) 1,672 195 13 Earnings Per Share - FD ($) 5.88 0.81 16 16.1 Return On Equity (%) 1.0 3

Quarter: Financial Performance Quarter: Financial Performance Growth Growth Yr / Yr Q4 / Q3 Q4 2000 Increase % Increase % Reported Net Income ($MM) 485 227 88 84 21 0.89 Earnings Per Share - FD ($) 1.75 103 0.35 25 18.4 8.6 Return On Equity (%) 3.4 Excluding Non-recurring Items Net Income ($MM) 430 59 16 40 10 Earnings Per Share - FD ($) 1.54 0.27 21 0.18 13 16.2 Return On Equity (%) 1.5 1.7 4

Year: Summary of Results Year: Summary of Results • Progressed towards our objective of top tier performance by 2002 • Met targets for the year: • EPS growth of 27.6% • ROE growth of 2.6 percentage points • Increased net income in Personal Commercial and Private Client Group driven by increased volumes • Low expense growth of 3.0% • Provision for credit losses at $400MM includes $110MM increase in general allowance 5

Quarter: Summary of Results Quarter: Summary of Results • Improvement driven by: • From Q3 00 • Improved trading in Investment Banking, increasing net income by $18MM • Revenue increases in Personal and Commercial and Private Client offset by increased strategic initiative spending in Private Client • Lower taxes of $20MM in Canadian subsidiaries and U.S. operations • From Q4 99 • Improvement in revenue in Personal and Commercial and Private Client groups • Expense growth of 1.0% excluding non-recurring items • Lower taxes of $20MM in Canadian subsidiaries and U.S. operations • General allowance increased by $110MM 6

Year: Grow th In Earnings Year: Grow th In Earnings Per Share Meets Target Per Share Meets Target $ 7 6.56 EPS growth of 27.6% over 1999 base of 6 $5.14 meeting 10% 5.88 target growth 5.07 5 4.66 EPS FD 4.72 4.66 EPS FD Ex. Non-rec. 4 1998 1999 2000 Growth Reported (%) Vs. Prior Year 1.3 0.9 39.0 Growth Ex. Non-recurring (%) ( ) 2.5 8.8 16.0 Vs. Prior Year 7

Quarter: Improved Quarter: Improved Earnings Per Share Earnings Per Share $ EPS reflects improved 1.66 1.75 1.75 1.75 results in Investment Banking and lower taxes 1.56 1.54 Personal & Commercial 1.40 1.42 results higher 1.25 1.36 1.27 Private Client results lower 0.86 EPS FD 0.75 EPS FD Ex. Non-rec. Q4 99 Q1 00 Q2 00 Q3 00 Q4 00 Growth Reported (%) 13.2 33.9 40.0 2.2 103.5 Prior Year ( ) ( ) 93.0 37.2 5.4 20.0 25.0 Linked Quarter Growth Ex. Non-rec. (%) 67.1 14.5 24.8 3.8 21.3 Prior Year ( ) 3.1 11.8 ( ) 9.9 12.8 13.2 Linked Quarter 8

Year: Grow th In Return Year: Grow th In Return On Equity Meets Target On Equity Meets Target % 18.0 18 16.1 15.2 ROE growth of 2.6% 15 15.1 15.2 from 1999 base of 15.4% meets target of 1.0 - 1.5% growth 14.1 ROE Rptd. Ex. Non-rec. Roe Reported 12 1998 1999 2000 9

Quarter: Improved Quarter: Improved Return On Equity Return On Equity % 19.8 20 19.0 18.4 17.6 16 16.2 16.2 15.0 14.7 14.5 12 9.8 ROE Rptd. Ex. Non-rec. Roe Reported 8 Q4 99 Q1 00 Q2 00 Q3 00 Q4 00 10