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HomePersonal BankingWealth ManagementSmall BusinessCommercialCorporate & InstitutionalAbout BMO


Address to Shareholders by William A. Downe, Incoming President and Chief Executive Officer, BMO Financial Group

Toronto, Ontario, March 1, 2007

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Thank you Mr. Chairman.

Good morning everyone.

I'm delighted to be with you today. Listening to Tony’s remarks reminds me again of what a tremendous honour it is to be the incoming CEO of one of Canada's greatest institutions, BMO Financial Group.

And there is no question that it is a privilege to be taking the helm of BMO in 2007, our 190th year in business. A privilege to be part of a company that’s as connected as we always have been to the changing world around us, and as committed to our customers, to innovation and to being a leader within our industry.

This will be the start of my 25th year as an employee of this Company and I have been fortunate to serve under three CEOs whom I have deeply respected. Moving ahead we truly are "standing on the shoulders of those who came before us." Those whose wise guidance and clear vision have made BMO what it is today.

I also think the smoothness of this succession has shown, once again, how effective our corporate governance is. I want to thank you, Tony, for your guidance, support, and friendship, and perhaps most of all, for your example. You are a disciplined and committed and effective leader.

Your corporate citizenship, whether it has been championing equality in the workplace, or equality in the world at large, is a shining example to us all.

I am fortunate that in my role as Chief Operating Officer, you gave me responsibility for many of the major issues we currently face. With what we have been able to do together, we are more nimble and cost-effective, but, most importantly, we’re determined to be a Bank where the customer comes first, all the time.

But the job is not done.

Making BMO that kind of bank is what I commit to do as your Chief Executive Officer. And having the support of the Board of Directors in this pursuit should give us all confidence that it will be done. They bring knowledge, discipline and a depth of experience across a full range of perspectives to the governance of the corporation. This is invaluable to the refinement and execution of strategy and to the setting of performance targets at progressively higher levels.

In the past year we have made a significant number of important senior management appointments and this too is a source of confidence behind my commitment. We have in place a strong team to write the next chapter in the BMO story. Together we are determined to take the steps that must be taken to move the company forward.

The decision announced a few weeks ago to streamline many of our internal functions was one part of that program. These were difficult decisions, not taken without consideration for the many individual employees who were directly affected, but they were necessary decisions.

And we accept that changes like these are necessary to being:

  • A bank that is able to move quickly and decisively
  • A bank where there is an emphasis on jobs dealing directly with customers in their communities
  • A bank where the available resources are concentrated to supporting growth on the front line
  • A bank where streamlined decision-making is responsive to our customers’ goals and aspirations
  • A bank where we listen to the customer, where we sit on their side of the table as a counsellor… as their advocate

Being that bank is our top priority. I want to be as clear about this as I can. Top priority means what it says. We will take the necessary steps to meet these commitments because this is what will drive growth. And grow we will, because growth will generate higher returns for you, our shareholders, because growth will reward our employees, and because growth will allow us to invest in the communities we serve. And growth will be a consequence of providing exceptional customer service.

The alternative is not stability. It is inertia and decline. In a competitive world, certainly in the competitive world of financial services, the only constant is that the expectations of customers will continue to rise. It is not an unreasonable expectation, for a customer, to want to be acknowledged as unique.

There are great examples of the payoff from a strong customer focus in many of our existing businesses. BMO Capital Markets continues to generate profit through constant innovation and through the introduction of new products and services for both individuals and corporations. Products like structured notes and emerging expertise in commercial real estate investment were built in response to what our customers were telling us is important.

Our commitment to service and excellence, at BMO Nesbitt Burns, BMO InvestorLine, BMO Mutual Funds, and BMO Harris Private Banking has garnered awards and has put us at the front of the retirement world. Our Regeneration campaign resounds with baby boomers-- with most of us in this room today. It is what our customers have told us is important.

And if you are a personal banking customer of ours in Canada you are seeing new, visible evidence of that same commitment. If you didn’t take the time to stop by the customer service counter in the lobby before the meeting I hope you will on the way home. We are showcasing our customer welcome offer which is designed to make it easy for you to do all of your banking with just one bank. BMO.

And if you own a small business you should know we are growing our share in commercial banking by focusing on what is important to you, while maintaining the most consistent credit culture in the industry. We have the best commercial bankers in the country, armed with the highest discretionary lending limits in the field – up to $50 million. We do this because we value local judgment, local experience and local customer knowledge … and because our customers have told us it is important.

And to support the growth of our business we will continue to invest in our physical network. This year, in Canada, we will renovate 30 locations and open 15 new branches to make it more convenient for our customers to manage their finances.

Among them, this new branch in Kamloops, which will hold its grand opening a week from today. It has 50 staff members, including advisors from BMO Nesbitt Burns and BMO Harris Private Banking. Special convenience features include expanded retail and commercial financial services and extended hours of operation – including Saturdays – and a drive-through InstaBank Extra.

This new branch in Milton, which will hold its grand opening at the end of this month, is also open on Saturdays and it, too, has a drive-through InstaBank Extra.

And this new branch in Ottawa, soon to open, will also have Saturday hours and a drive-through InstaBank Extra.

We have built these branches to provide what customers have told us is important.

New and better branches and faster processes are important, even vital, but the real key to growth is to provide our customers with a better experience once they walk through our doors. Whether that door is on Main Street or online, our customers will be met by a professional ready to have a meaningful conversation that starts and ends with customers’ needs.

Our commitment and our passion is to raise their expectations and then exceed them. (And we are determined to do just that). A great example of this has been dramatic shortening of the steps required to open an RRSP. We will soon do the same for mortgage approvals, and we will be increasing the number of mortgage specialists by nearly 20% this year.

The first impact on the customer will be felt on the front line. But we are applying the same principles to executing strategic decisions. Here again an example. We have now been in retail banking in the U.S. Midwest for over 20 years. Our local knowledge of that market simply can’t be matched by any other Canadian bank doing business in the United States. Banking has traditionally been a disciplined profession, and rightly so. But acting with discipline does not mean acting as if the world will stand still, awaiting our decision.

That is why we have developed the expertise to quicken our review of acquisitions, to expand our footprint and to become the leading personal and commercial bank in the U.S. Midwest. In the last two years, we have extended our banking network into Indiana with the acquisition of Mercantile Bank and of First National Bank & Trust – the latter bringing us to Indianapolis, a city of 1.7 million people, with good growth in population and household income. In the same time period, we have been building our commercial banking presence in the eight states around Illinois. Just recently, we opened our first location in Milwaukee, Wisconsin. In the U.S., as in Canada, we are bringing our people closer to the customer because that is what our customers have told us is important.

All of us at BMO have the same goal and the same aspiration. We will grow our business by focusing on the customer, with renewed attention to our retail and small business customers. We will do that by consistently putting their concerns and their time, first.

And that is what I intend to do with the trust that has been placed in me.

I recognize that none of this can be accomplished without change – potentially far-reaching change in structure, procedure and perhaps most of all in attitude. At this, our 189th Annual Meeting, let us remember that change – and being an agent of change – is the nature of history and it will define the future.

As I mentioned earlier in my remarks, we have seen a lot of change in the past year, and there is much more to come. This will start with our financial targets which, as Karen will shortly explain, are going to be aggressive. Achieving these targets will demand a great deal from all of us who work for BMO, and I believe we are ready for that.

I am calling on a team of 35,000 people to embrace constructive change – to make certain no one sees change as something to be postponed or diluted. Calling on them to be energized by change and see it as the only way to meet targets that demand a stretch; the only way to realize the full potential of our capital, our values and our people. As the only way to meet our obligations to our shareholders.

Today, I make three commitments to you.

The first is to be a good steward of the great organization you have asked me to lead. I have just spoken of the pressing need for change. But I know that without a firm foundation, change is simply the shuffling of cards, and not building sustainable value.

The second commitment is that we will create value for our shareholders through a relentless pursuit of the customer, of their objectives and their aspirations.

My third commitment is to our employees in particular. I know many of you are listening in this morning. BMO Financial Group is not going to be a place to rest on past accomplishments or entitlement, but is going to be an exciting, rewarding, stimulating place to work.

This is a time when BMO once again sets new goals, more ambitious goals, and begins the climb to reach them.

As shareholders, you can expect we will translate our commitment to the customer into growth; growth in the business of the Bank, and in the value of your shares.

I’d ask you to keep that in mind as Karen reviews our current performance and financial targets.

Thank you very much.

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