Financial Performance and
Condition at a Glance

Our Performance

Five-Year Total Shareholder Return (TSR)

  • BMO shareholders have earned an average annual return of 5.9% over the past five years.
  • The one-year TSR in 2010 was a strong 26.4%, well above the comparable market indices in both Canada and the United States. BMO’s one-year TSR has exceeded 20% in three of the past five years.

See Total Shareholder Return in the Value Measures (202KB - PDF) section of the MD&A.

Peer Group Performance

Five-Year TSR
  • The Canadian peer group average annual five-year TSR was 7.9%. The one-year TSR was 22.5%.
  • The North American peer group average annual five-year TSR of –0.5% and one-year TSR of 13.4% were well below the Canadian averages, as U.S. bank results continued to be more affected by credit losses.
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Total Shareholder Return (TSR). 2006: 19.1; 2007: 14.2; 2008: 0.9; 2009: 1.8; 2010: 5.9

Dark Blue BMO Financial Group

Black Line Canadian peer group average

Grey Line North American peer group average

Our Performance

Earnings per Share (EPS) Growth

  • EPS grew 54% to $4.75 in 2010. Net income increased more than $1 billion to $2.8 billion, while the average number of common shares outstanding increased modestly.
  • EPS growth was driven by strong growth in revenues and lower provisions for credit losses.

See Earnings per Share Growth in the Value Measures (202KB - PDF) section of the MD&A.

Peer Group Performance

EPS Growth (%)
  • The Canadian peer group average EPS increased 42%, compared with 9.6% in 2009. All banks in the peer group saw healthy increases in EPS, due in part to lower credit losses.
  • Net income available to common shareholders of the North American peer group was low in 2009, as five of our peers recorded losses due to the difficult credit conditions and weak economic environment, resulting in overall peer group EPS growth of -80%. Net income available to common shareholders in 2010 was 14 times as high as the 2009 level, due to lower credit losses and low funding costs in 2010.
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Earnings per Share (EPS) Growth. 2006: 11.2; 2007: -20.2; 2008: -8.5; 2009: -18.1; 2010: 54.2

Dark Blue BMO Financial Group

Black Line Canadian peer group average

Grey Line North American peer group average

North American 2008 to 2010 peer group data is not to scale.

Our Performance

Return on Equity (ROE)

  • ROE improved from 9.9% to 14.9% in 2010, primarily due to an increase of more than $1 billion in earnings available to common shareholders, while we continued to enhance our strong capital position.
  • BMO has achieved an ROE of 13% or better in 20 of the past 21 years.

See Return on Equity in the Value Measures (202KB - PDF) section of the MD&A.

Peer Group Performance

ROE (%)
  • The Canadian peer group average ROE of 15.2% increased from the average return in 2009, as ROE improved for each bank in the peer group due to higher earnings.
  • ROE for the North American peer group was 8.8%. ROE for each of our U.S. peers was less than BMO’s and three U.S. banks reported negative returns.
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Return on Equity (ROE). 2006: 19.2; 2007: 14.4; 2008: 13.0; 2009: 9.9; 2010: 14.9

Dark Blue BMO Financial Group

Black Line Canadian peer group average

Grey Line North American peer group average

Our Performance

Net Economic Profit (NEP) Growth

 (Note 1)
  • NEP, a measure of added economic value, was $818 million, up from a loss of $68 million in 2009.
  • The improvement was attributable to the significant increase in earnings, net of a higher charge for capital as a result of an increase in shareholders’ equity.

See Net Economic Profit Growth in the Value Measures (202KB - PDF) section of the MD&A.

Peer Group Performance

NEP Growth (%)
  • The Canadian peer group average NEP growth was 212.0%, as some banks in the peer group recorded significant increases in NEP from the low levels of a year ago.
  • NEP growth for the North American peer group was 86.4%, as NEP was significantly higher for all but one of our U.S. peers.

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Net Economic Profit (NEP) Growth. 2006: 10.3; 2007: -51.0; 2008: -32.8; 2009: -116.7; 2010: 1,309.8

Dark Blue BMO Financial Group

Black Line Canadian peer group average

Grey Line North American peer group average

The result for BMO in 2010 is not to scale.

Our Performance

Revenue Growth

  • Revenue increased $1,146 million or 10.4% to $12,210 million in 2010, following growth of 8.4% in 2009 and 9.2% in 2008. The consistently high growth rates demonstrate the benefit of our diversified business mix.
  • There was solid growth in each of the operating groups except P&C U.S., where revenues were modestly higher on a U.S. dollar basis.

See Revenue in the 2010 Financial Performance Review (344KB - PDF) section of the MD&A.

Peer Group Performance

Revenue Growth (%)
  • Revenue growth for the Canadian peer group averaged 5.9%.
  • Revenue growth for the North American peer group averaged 9.8%, reflecting particularly strong growth recorded by a few members of the peer group.
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Revenue Growth. 2006: 1.5; 2007: -6.4; 2008: 9.2; 2009: 8.4; 2010: 10.4

Dark Blue BMO Financial Group

Black Line Canadian peer group average

Grey Line North American peer group average

Peer group data for 2009 is not to scale.

Our Performance

Productivity Ratio (Expense-to-Revenue Ratio)

 (Note 1)
  • The productivity ratio was 62.2%, an improvement of 450 basis points from 2009. Similarly, the cash productivity ratio improved 440 basis points to 61.9%.
  • The improvement was due to strong revenue growth combined with effective expense management.

See Productivity in the 2010 Financial Performance Review (344KB - PDF) section of the MD&A.

Peer Group Performance

Productivity Ratio (%)
  • The Canadian peer group average productivity ratio was 59.9%, improving from 63.7% in 2009 due to solid revenue growth and good expense control.
  • The average productivity ratio for the North American peer group was 60.9%, a level that remains worse than the average of our Canadian peers but better than the ratio in 2009.
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Expense-to-Revenue Ratio (Productivity Ratio). 2006: 63.6; 2007: 70.6; 2008: 67.6; 2009: 66.7; 2010: 62.2

Dark Blue BMO Financial Group

Black Line Canadian peer group average

Grey Line North American peer group average

Our Performance

Credit Losses

  • The provision for credit losses (PCL) fell to $1,049 million from $1,603 million in 2009. There was no change in the general allowance, compared with a $60 million increase a year ago.
  • PCL as a percentage of average net loans and acceptances fell to 61 basis points from 88 basis points a year ago. Credit market conditions improved but remain challenging in certain sectors.

See Provision for Credit Losses in the 2010 Financial Performance Review (344KB - PDF) section of the MD&A and Credit and Counterparty Risk in the Enterprise-Wide Risk Management (548 KB - PDF) section of the MD&A.

Peer Group Performance

Provision for Credit Losses as a % of Average Net Loans and Acceptances
  • The Canadian peer group average PCL represented 56 basis points of average net loans and acceptances, down from 90 basis points in 2009.
  • The North American peer group average PCL was 137 basis points, well below the 2009 level but still elevated, as U.S. bank results continued to be severely affected by weakness in the real estate market and broader economy.
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Credit Losses. 2006: 0.11; 2007: 0.21; 2008: 0.76; 2009: 0.88; 2010: 0.61

Dark Blue BMO Financial Group

Black Line Canadian peer group average

Grey Line North American peer group average

North American peer group data for 2008 and 2009 is not to scale.

Our Performance

Impaired Loans

  • Gross impaired loans and acceptances (GIL) decreased to $3,221 million from $3,297 million in 2009, and represented 13.6% of equity and allowances for credit losses. GIL includes $302 million in respect of loans acquired in 2010 for which there is a loss-sharing agreement with the FDIC.
  • Formations of new impaired loans and acceptances, a key driver of provisions for credit losses, were $1,525 million, down 43% from $2,690 million in 2009, with the United States accounting for the majority of the impaired formations.

See Provision for Credit Losses in the 2010 Financial Performance Review (344KB - PDF) section of the MD&A; and Credit and Counterparty Risk in the Enterprise-Wide Risk Management (548 KB - PDF) section of the MD&A.

Peer Group Performance

Gross Impaired Loans and Acceptances as a % of Equity and Allowances for Credit Losses
  • The Canadian peer group average was in line with last year, at 11.0% of equity and allowances for credit losses.
  • The average ratio for North American banks was also in line with a year ago, at 13.9%, and remains higher than the average of the Canadian peer group.
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Impaired Loans. 2006: 4.1; 2007: 4.4; 2008: 12.1; 2009: 14.9; 2010: 13.6

Dark Blue BMO Financial Group

Black Line Canadian peer group average

Grey Line North American peer group average

Our Performance

Cash and Securities-to-Total Assets

  • The cash and securities-to-total assets ratio increased to 35.0% from 31.9% in 2009, reflecting a strong liquidity position.
  • Liquidity continues to be supported by our large base of customer deposits and our strong capital position.

See Liquidity and Funding Risk in the Enterprise-Wide Risk Management (548 KB - PDF) section of the MD&A.

Peer Group Performance

Cash and Securities-to-Total Assets (%)
  • The cash and securities-to-total assets ratio for the Canadian peer group of 31.0% was unchanged from 2009 levels. The average ratio remains at a level that is in line with historic averages.
  • The North American peer group average ratio was 30.4% in 2010, a level that is up from a year ago but marginally below the average of our Canadian peers.
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Cash and Securities-to-Total Assets. 2006: 27.2; 2007: 33.1; 2008: 29.1; 2009: 31.9; 2010: 35.0

Dark Blue BMO Financial Group

Black Line Canadian peer group average

Grey Line North American peer group average

Our Performance

Capital Adequacy

  • The Tier 1 Capital Ratio remained strong at 13.45%, up from 12.24% in 2009.
  • The Total Capital Ratio was 15.91%, up from 14.87% in 2009.

See Enterprise-Wide Capital Management in the Financial Condition Review (264 KB - PDF) section of the MD&A.

Peer Group Performance

Capital Adequacy
  • The Canadian peer group average Tier 1 Capital Ratio was 12.81% in 2010, up from 11.78% in 2009, as all banks in the peer group had higher capital ratios.
  • The basis for computing capital adequacy ratios is not comparable in Canada and the United States.
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Capital Adequacy. Under Basel I – 2006: 10.22; 2007: 9.51. Under Basel II – 2008: 9.77; 2009: 12.24; 2010: 13.45

Dark Blue BMO Financial Group

Black Line Canadian peer group average

Our Performance

Credit Rating

  • BMO’s credit ratings, as assessed by the four major ratings agencies, are listed below. There was one downgrade in 2010 and all four ratings are considered high-grade and high quality.
  • Credit ratings are important in the raising of both capital and funding to support our business operations. Maintaining strong credit ratings allows us to access the capital markets at competitive pricing. Should our credit ratings materially decrease, our cost of funds would likely increase significantly and our access to funding and capital through capital markets could be reduced. A material downgrade of our ratings could have additional consequences, including those set out in Note 10 (PDF, 87 KB) of the financial statements.

See Liquidity and Funding Risk in the Enterprise-Wide Risk Management (548 KB - PDF) section of the MD&A.

Peer Group Performance

  • The Canadian peer group median credit ratings were unchanged in 2010. Each of the median Canadian peer group ratings is considered high-grade and high quality.
  • The North American peer group median credit ratings as assessed by one of the ratings agencies fell slightly from 2009, while another increased slightly. Three of the ratings were slightly lower than the median of the Canadian peer group, as economic conditions remain more difficult in the United States.

BMO Financial Group
  2006 2007 2008 2009 2010
DBRS AA AA AA AA AA
Fitch AA– AA– AA– AA– AA–
Moody’s Aa3 Aa1 Aa1 Aa1 Aa2
S&P AA– A+ A+ A+ A+
Canadian peer group average
  2006 2007 2008 2009 2010
DBRS AA AA AA AA AA
Fitch AA– AA– AA– AA– AA–
Moody’s Aa3 Aa1 Aa1 Aa1 Aa1
S&P AA– AA– AA– AA– AA–
North American peer group average
  2006 2007 2008 2009 2010
DBRS AAL AA AA AA AAL
Fitch AA– AA– AA– AA– AA–
Moody’s Aa3 Aa2 Aa2 Aa3 Aa2
S&P A+ AA– AA– A+ A+
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Note 1. Results stated on a cash basis as well as NEP are non-GAAP measures. Please see the Non-GAAP Measures (PDF, 45 KB) section of the MD&A for a discussion of the use of non-GAAP measures.

Certain BMO and peer group prior year data has been restated to conform with the current year’s basis of presentation.

Results are as at or for the years ended October 31 for Canadian banks and as at or for the years ended September 30 for U.S. banks.

The Canadian peer group averages are based on the performance of Canada’s six largest banks: BMO Financial Group, Canadian Imperial Bank of Commerce, National Bank of Canada, RBC Financial Group, Scotiabank and TD Bank Financial Group. The North American peer group averages are based on the performance of 13 of the largest banks in North America. It includes the Canadian peer group, except National Bank of Canada, as well as BB&T Corporation, Fifth Third Bancorp, Key Corp., Bank of New York Mellon, The PNC Financial Services Group Inc., Regions Financial, SunTrust Banks Inc. and U.S. Bancorp. The North American peer group was redefined in 2010. Prior year averages have not been restated.

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