Management’s Discussion and Analysis

BMO Capital Markets

BMO Capital Markets is a North American-based financial services provider offering a complete range of products and services to corporate, institutional and government clients. BMO Capital Markets has approximately 2,700 professionals in 33 locations around the world, including 19 offices in North America.

Daniel Barclay
Group Head
BMO Capital Markets (1)

Patrick Cronin
Chief Risk Officer
BMO Financial Group (1)

Lines of Business

Investment and Corporate Banking offers debt and equity capital-raising services to clients, as well as loan origination and syndication, balance sheet management solutions and treasury management services. We provide strategic advice on mergers and acquisitions (M&A), restructurings and recapitalizations, as well as valuation and fairness opinions. We also offer trade finance and risk mitigation services to support the international business activities of our clients, and we provide a wide range of banking and other operating services tailored to North American and international financial institutions.

Trading Products offers research and access to global markets for institutional, corporate and retail clients through an integrated suite of sales and trading solutions that include debt, foreign exchange, interest rate, credit, equity, securitization and commodities. We also offer new product development and origination services, as well as risk management (derivatives) advice and services to hedge against fluctuations in a variety of key inputs, including interest rates and commodities prices. In addition, we provide funding and liquidity management to our clients.


Strengths and Value Drivers

  • Unified coverage and integrated distribution across our North American platform and complementary global footprint, delivering a seamless and exceptional client experience.
  • Innovative ideas and tailored solutions delivered through a comprehensive coverage team, dedicated to anticipating, understanding and meeting our clients’ needs.
  • Top-ranked Canadian equity and fixed income research with sales and trading capabilities and deep expertise in core sectors.
  • Well-diversified platform and business mix – by sector, geography, product and currency, including a strong, scalable and relevant U.S. business – positioning BMO well in several key markets and over the long term.
  • Strong first-line-of-defence risk management and regulatory and compliance capabilities, enabling effective decision-making in support of our strategic priorities.

Strategy and Key Priorities

BMO Capital Markets’ vision is to be a top 10 North American investment bank, enabling clients to achieve their goals. We offer an integrated platform, differentiated by innovative ideas and unified coverage.

Key Priority

Maintain our leadership position in Canada through our top-tier coverage team

2018 Achievements

  • Continued to win key mandates in core Canadian industries, including: acting as exclusive financial advisor to Pure Industrial Real Estate Trust on its $3.8 billion sale, the largest industrial real estate transaction in Canadian history; advising METRO on its acquisition of Jean Coutu Group, which created a $16 billion retail leader; and advising steelmaker Stelco as a joint bookrunner on its IPO and two follow-on offerings, which raised $645 million
  • Ranked #1 in equity research and trading in Canada in the 2018 Brendan Wood International survey
  • Recognized as a 2018 Greenwich Quality Leader in Canadian Equity Sales Trading and Execution Service
  • Announced a strategic technology partnership with Clearpool Group to provide a suite of fully customizable algorithms to institutional clients trading Canadian and U.S. equities
  • Launched a pilot fixed income issuance transaction using blockchain technology to mirror the transaction, a first of its kind in the Canadian marketplace
  • Received the top two Canadian awards for Structured Products from StructuredRetailProducts.com at the 2018 Americas Structured Products and Derivatives Conference, and was also named Best House, Canada (sixth nomination for this award in seven years) and Best Distributor, Canada
  • Named Best Bank for the Canadian Dollar by FX Week magazine for the eighth consecutive year

2019 Focus

Continue to earn leading market share in Canada by strengthening our client relationships and driving incremental market share growth

Key Priority

Drive performance in our U.S. platform with a focused strategy and selectively expand our U.S. corporate bank where we are competitively advantaged

2018 Achievements

  • Acquired KGS-Alpha Capital Markets (KGS-Alpha), a New York-based fixed income broker-dealer specializing in U.S. mortgage-backed and asset-backed securities in the institutional investor market
  • Collaborated with our U.S. P&C business to deliver as “One Bank” in key middle-market M&A transactions, including our exclusive financial advisory role with Lifetouch in its US$825 million sale to Shutterfly
  • Acted as lead-left bookrunner on 134 U.S. equity and debt capital raising transactions, up more than 38% from last year
  • Closed 38 U.S. and seven cross-border M&A transactions with a total deal volume of US$23.8 billion
  • Ranked #1 in the Institutional Investor 2018 All-America Fixed Income Research Team Survey for U.S. Rates Strategy and Technical Analysis
  • Expanded our presence with the acquisition of US$3 billion in energy loan commitments from a global financial institution

2019 Focus

Continue to leverage our key strategic investment to accelerate growth from our U.S. platform, and selectively expand our U.S. corporate bank where we are competitively advantaged

Key Priority

Leverage our strong North American capabilities and presence in select international markets

2018 Achievements

  • Named World’s Best Metals & Mining Investment Bank for the ninth consecutive year by Global Finance and hosted one of the industry’s most important events, the 27th Annual Global Metals & Mining Conference, which brought together 550 investors and 800 corporate attendees, including 140 presenting companies
  • Named Best Institutional Forex Provider in North America/China for the eighth consecutive year by Global Banking and Finance Review
  • Executed live pilot transactions on Batavia, a blockchain-based global trade finance platform jointly developed by a consortium that includes BMO
  • Maintained our leadership position in the Supranational Sub-Sovereign & Agency (SSA) sector as joint lead manager on two World Bank Sustainable Development Bonds – one in support of the empowerment of women and girls and the other in support of the health and nutrition of women, adolescents and children – with each offering raising $1 billion
  • Underwrote our first social bond issued by a supranational borrower, the Inter-American Development Bank, to help fund childhood education in developing Latin American countries
  • Hosted inaugural U.S. Rates Seminar in Seoul, South Korea, with more than 70 participants, demonstrating the growing extent of our reach into Asian market segments

2019 Focus

Continue to leverage our strong North American and global capabilities to expand our footprint and establish strategic relationships in select international markets



(1) Prior to November 1, 2018, Daniel Barclay was Co-Head, Global Investment and Corporate Banking, and Patrick Cronin was Group Head, BMO Capital Markets.



Caution

This BMO Capital Markets section contains forward-looking statements. Please see the Caution Regarding Forward-Looking Statements.