As a leading North American financial institution, we finance opportunity, create wealth and maximize returns to our shareholders. At the same time, BMO is a major business enterprise playing a vital role in supporting economic prosperity for our customers, employees and communities. The wealth BMO creates is shared through employee compensation, the procurement of goods and services, shareholder dividends, support for charitable initiatives and taxes.
Distribution of revenues
The wealth created by BMO is widely shared. In 2011, our revenue was $13,718 million. Of this amount, approximately 34% went to employee compensation, 25% went to suppliers and 6% went to our provision for credit losses. Of the remaining $4,777 million, 33% went to governments in the form of income taxes and other levies and 67% was returned to our shareholders or reinvested in our company.
We create wealth in a variety of ways. Below are some examples of the direct economic value BMO generated and distributed in fiscal 2011:
Reported net income rose by 16%, or $456 million. Adjusted net income increased 15%, or $439 million. Revenue growth was good and provisions for credit losses were lower.
Reported revenue rose by $1.5 billion, or 12.3%, following growth of 10.4% and 8.4% in the previous two years. Adjusted revenue increased $1.3 billion, or 10.3%.
Government levies and taxes
Total government levies and taxes were $1,437 million. These include payroll levies, property taxes, provincial capital taxes, business taxes, harmonized sales tax, GST and other sales taxes and sundry taxes. For a year-over-year breakdown of government levies and taxes, see Table 8: Non-Interest Expense and Expense-to-Revenue Ratio Return on Equity in the 2011 Annual Report.
In 2011, reported return on equity (ROE) increased 0.4 percentage points from 2010 levels and adjusted ROE increased 0.3 percentage points. Both increases are due to higher earnings. BMO’s three-year average annual total shareholder return (TSR) is 17.4%, placing us in the top tier of our Canadian and North American peer groups. For more information on our financial performance, see our Annual Report and our Investor Relations website (link).
We employ more than 47,000 full- and part-time workers. Total employee compensation in 2011 was $4,881 million. That number includes salaries, performance-based compensation and employee benefits. For a year-over-year breakdown of employee compensation, see Table 8: Non-Interest Expense and Expense-to-Revenue Ratio Return on Equity in the 2011 Annual Report.
Purchasing goods and services
Each year, we purchase over $2 billion worth of goods and services with our preferred suppliers in North America.
Investing in our communities
In 2011, BMO contributed more than $66.4 million in donations, sponsorships and events to groups, organizations and programs that help build and sustain resilient, vital and healthy communities in Canada and the U.S. For more information, visit our community website.
Total premises and equipment costs were $1,566
million and included rental of real estate premises, furniture
and fixtures, property taxes, computers and equipment. For a year-over-year
8: Non-Interest Expense and Expense-to-Revenue Ratio Return
on Equity in the 2011 Annual Report.