STRATEGIC HIGHLIGHTS Q1 2003 TONY COMPER Chairman & CEO - PowerPoint PPT Presentation

STRATEGIC HIGHLIGHTS Q1 2003 TONY COMPER Chairman & CEO Quarterly Investor Presentation February 25, 2003

Earnings Rise Despite Overall Group Overall Group Net Earnings Net Earnings Challenging Environment $MM 7% 400 • Solid growth in personal and commercial volumes drive increased 300 net income in Canada and the U.S. 200 • EPS of $0.75 – up 6 percent Cash EPS of $0.79 100 0 Q1 '02 Q1 '03 1 S T R A T E G I C H I G H L I G H T S F I R S T Q U A R T E R 2 0 0 3

Strong Performance from Improved P&C Improved P&C Expense- Expense -to to- -Revenue Revenue Personal & Commercial Client Ratio Ratio Group 70% • 18% earnings growth and improved productivity in Canada and U.S. 66.1 • Canadian retail and business deposits grew 11% year-over-year 65% 64.2 ! Increased market share in retail banking and business loans under $5MM ! Pathway Connect rollout completed • U.S. loans increased 27% and deposits up 9% year-over-year 60% Q1 '02 Q1 '03 2 S T R A T E G I C H I G H L I G H T S F I R S T Q U A R T E R 2 0 0 3

IBG and PCG Poised for Top Online Broker Growth - Globe and Mail • Steady contribution to profit year-over-year AUA, AUM and Deposits • IBG improved bottom line over last quarter $Bn 13% 300 ! Focused on decreasing volatility and increasing profitability 200 • PCG increased AUM, AUA and term 279 247 deposits increased 13% year-over-year 100 0 Q1 '02 Q1 '03 3 S T R A T E G I C H I G H L I G H T S F I R S T Q U A R T E R 2 0 0 3

Strong and Improving Asset Quality Specific Provision for Credit Losses As a Percentage of Average Net Loans and Acceptances (including Reverse Repos) 2.0% BMO Cdn. Competitors 13 Year: 0.42% 0.62% 1.5% F2002: 0.56% 1.04% 1.07% 1.0% 0.60% 0.5% 0.30% 0.39% 0.01% 0.0% 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Q1 2003 BMO Weighted Avg of Cdn Competitors * BMO’s Canadian Competitors include: Royal, BNS, CIBC, TD and National. Excluding TD’s sectoral provisions, the F2002 Average for BMO’s Canadian Competitors is 0.87% 4 S T R A T E G I C H I G H L I G H T S F I R S T Q U A R T E R 2 0 0 3

2003 Priority: Improving Operational Efficiency • Improving productivity is a key focus for 2003 • Strategic approach to expense management balances short- and long-term objectives • Operating groups focused on productivity improvements • Improved expense-to-revenue ratio to 67.9 from 68.3 in the previous quarter 5 S T R A T E G I C H I G H L I G H T S F I R S T Q U A R T E R 2 0 0 3

Reaffirmed Commitments to 2003 Targets Performance Measure F2003 Target (ex. non-recurring items) EPS Growth* 10 – 15% (Cash EPS 10 – 15%) Return On Equity 14 – 15% (Cash ROE 15 – 16%) Maintain an annual PCL at or below the Provision For Credit Losses 2002 level ($820MM) (Current estimate is $700MM or below) Tier 1 Capital Minimum 8.0% * Growth based on F2002 diluted EPS of $2.76 and diluted cash EPS of $2.91 6 S T R A T E G I C H I G H L I G H T S F I R S T Q U A R T E R 2 0 0 3

Q1 2003 Q1 2003 Increased Dividend Payout Ratio D IVIDENDS D IVIDENDS D ECLARED D ECLARED Dividends Declared Per Share $0.33 $0.33 (C$) 1.32 1.20 1.12 0.88 0.94 1.00 P AYOUT AYOUT R R ATIO P ATIO 0.82 43.2% 43.2% 0.74 0.53 0.56 0.60 0.66 * IELD * Y IELD Y 3.20% 3.20% 92 93 94 95 96 97 98 99 00 01 02 03F *Based on 01/31/03 share price of $41.30 7 S T R A T E G I C H I G H L I G H T S F I R S T Q U A R T E R 2 0 0 3

STRATEGIC HIGHLIGHTS Q1 2003 TONY COMPER Chairman & CEO Quarterly Investor Presentation February 25, 2003

Forward-Looking Statements CAUTION REGARDING FORWARD-LOOKING STATEMENTS Bank of Montreal’s public communications often include written or oral forward-looking statements. Statements of this type are included in this presentation, and may be included in filings with Canadian securities regulators or the U.S. Securities and Exchange Commission, press releases or in other communications. All such statements are made pursuant to the ‘safe harbor’ provisions of the United States Private Securities Litigation Reform Act of 1995. Forward- looking statements may involve, but are not limited to, comments with respect to our objectives for 2003 and beyond, our strategies or future actions, our targets, expectations for our financial condition or share price, the results of or outlook for our operations or for the Canadian and U.S. economies. By their nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties. There is significant risk that predictions and other forward-looking statements will not prove to be accurate. We caution readers of this document not to place undue reliance on our forward-looking statements as a number of factors could cause actual future results, conditions, actions or events to differ materially from the targets, expectations, estimates or intentions expressed in the forward-looking statements. The future outcomes that relate to forward-looking statements may be influenced by many factors, including but not limited to: global capital market activities; interest rate and currency value fluctuations; industry and worldwide economic and political conditions; regulatory and statutory developments; the effects of competition in the geographic and business areas in which we operate; management actions; and technological changes. We caution that the foregoing list of factors is not exhaustive and that when relying on forward-looking statements to make decisions with respect to Bank of Montreal, investors and others should carefully consider these factors, as well as other uncertainties and potential events, and the inherent uncertainty of forward-looking statements. Bank of Montreal does not undertake to update any forward-looking statement, whether written or oral, that may be made, from time to time, by the organization or on its behalf. Investor Relations Phone: 416-867-6656 Fax: 416-867-3367 Email: investor.relations@bmo.com 9 S T R A T E G I C H I G H L I G H T S F I R S T Q U A R T E R 2 0 0 3