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

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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

Earnings Rise Despite Challenging Environment

• Solid growth in personal and

commercial volumes drive increased net income in Canada and the U.S.

• EPS of $0.75 – up 6 percent

Cash EPS of $0.79

100 200 300 400 Q1 '02 Q1 '03

Overall Group Overall Group Net Earnings Net Earnings 7%

$MM

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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 Personal & Commercial Client Group

• 18% earnings growth and improved

productivity in Canada and U.S.

• Canadian retail and business deposits

grew 11% year-over-year

! 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

64.2 66.1 60% 65% 70% Q1 '02 Q1 '03

Improved P&C Improved P&C Expense Expense-

• to

to-

• Revenue

Revenue Ratio Ratio

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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

247 279

100 200 300 Q1 '02 Q1 '03

IBG and PCG Poised for Growth

• Steady contribution to profit year-over-year
• IBG improved bottom line over last quarter

! Focused on decreasing volatility and

increasing profitability

• PCG increased AUM, AUA and term

deposits increased 13% year-over-year Top Online Broker

• Globe and Mail

13% $Bn AUA, AUM and Deposits

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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

Specific Provision for Credit Losses As a Percentage

• f Average Net Loans and Acceptances

(including Reverse Repos)

Strong and Improving Asset Quality

1.07% 0.60% 0.30% 0.01%

0.0% 0.5% 1.0% 1.5% 2.0%

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Q1 2003 BMO Weighted Avg of Cdn Competitors

0.39%

* 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% BMO

• Cdn. Competitors

13 Year: 0.42% 0.62% F2002: 0.56% 1.04%

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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

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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

F2003 Target (ex. non-recurring items) Performance Measure

Minimum 8.0% Tier 1 Capital Maintain an annual PCL at or below the 2002 level ($820MM) (Current estimate is $700MM or below) Provision For Credit Losses 14 – 15% (Cash ROE 15 – 16%) Return On Equity 10 – 15% (Cash EPS 10 – 15%) EPS Growth*

* Growth based on F2002 diluted EPS of $2.76 and diluted cash EPS of $2.91

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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

Increased Dividend Payout Ratio

0.53 0.56 0.60 0.66 0.74 0.88 0.94 1.00 1.12 1.32 0.82 1.20

92 93 94 95 96 97 98 99 00 01 02 03F

Dividends Declared Per Share (C$)

*Based on 01/31/03 share price of $41.30

D DIVIDENDS

IVIDENDS

D DECLARED

ECLARED

$0.33 $0.33

P PAYOUT

AYOUT R

RATIO

ATIO

43.2% 43.2%

Y YIELD

IELD*

* 3.20% 3.20%

Q1 2003 Q1 2003

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

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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

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

• ur 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