annual meeting of shareholders

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Annual Meeting of Shareholder s

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Annual Meeting of Shareholders. DAVID GALLOWAY Chairman. Annual Meeting of Shareholders. TONY COMPER President & Chief Executive Officer. Annual Meeting of Shareholders. WILLIAM DOWNE Chief Operating Officer. Annual Meeting of Shareholders. Kamloops, B.C. Milton, Ontario. - PowerPoint PPT Presentation

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Page 1: Annual Meeting of Shareholders

Annual Meeting of Shareholders

Page 2: Annual Meeting of Shareholders

DAVID GALLOWAY Chairman

Page 3: Annual Meeting of Shareholders

Annual Meeting of Shareholders

Page 4: Annual Meeting of Shareholders

TONY COMPER President & Chief Executive Officer

Page 5: Annual Meeting of Shareholders

Annual Meeting of Shareholders

Page 6: Annual Meeting of Shareholders

WILLIAM DOWNE Chief Operating Officer

Page 7: Annual Meeting of Shareholders

Annual Meeting of Shareholders

Page 8: Annual Meeting of Shareholders

Kamloops, B.C.

Page 9: Annual Meeting of Shareholders

Milton, Ontario

Page 10: Annual Meeting of Shareholders

Ottawa, Ontario

Page 11: Annual Meeting of Shareholders

Annual Meeting of Shareholders

Page 12: Annual Meeting of Shareholders

KAREN MAIDMENT Chief Financial &Administrative Officer

Page 13: Annual Meeting of Shareholders

CAUTION REGARDING FORWARD-LOOKING STATEMENTSBank of Montreal’s public communications often include written or oral forward-looking statements. Statements of this type are included in this document, and may be included in other filings with Canadian securities regulators or the U.S. Securities and Exchange Commission, or in other communications. All such statements are made pursuant to the ‘safe harbor’ provisions of, and are intended to be forward-looking statements under, the United States Private Securities Litigation Reform Act of 1995 and any applicable Canadian securities legislation. Forward-looking statements may involve, but are not limited to, comments with respect to our objectives and priorities for 2007 and beyond, our strategies or future actions, our targets, expectations for our financial condition or share price, and the results of or outlook for our 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, forecasts, conclusions or projections will not prove to be accurate, that our assumptions may not be correct and that actual results may differ materially from such predictions, forecasts, conclusions or projections. 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: general economic conditions in the countries in which we operate; interest rate and currency value fluctuations; changes in monetary policy; the degree of competition in the geographic and business areas in which we operate; changes in laws; judicial or regulatory proceedings; the accuracy and completeness of the information we obtain with respect to our customers and counterparties; our ability to execute our strategic plans and to complete and integrate acquisitions; critical accounting estimates; operational and infrastructure risks; general political conditions; global capital market activities; the possible effects on our business of war or terrorist activities; disease or illness that impacts on local, national or international economies; disruptions to public infrastructure, such as transportation, communications, power or water supply; and technological changes.

We caution that the foregoing list is not exhaustive of all possible factors. Other factors could adversely affect our results. For more information, please see the discussion on pages 28 and 29 of BMO’s 2006 Annual Report, which outlines in detail certain key factors that may affect BMO’s future results. 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.

Assumptions about the performance of the Canadian and U.S. economies in 2007 and how that will affect our businesses are material factors we consider when setting our strategic priorities and objectives and in determining our financial targets, including provisions for credit losses. Key assumptions include that the Canadian and U.S. economies will expand at a moderate pace in 2007 and that inflation will remain low. We have also assumed that interest rates in 2007 will remain little changed in Canada but decline in the United States and that the Canadian dollar will hold onto its recent gains in value relative to the U.S. dollar. In determining our expectations for economic growth, both broadly and in the financial services sector, we primarily consider historical economic data provided by the Canadian and U.S. governments and their agencies. Tax laws in the countries in which we operate, primarily Canada and the United States, are material factors we consider when determining our sustainable effective tax rate.

Page 14: Annual Meeting of Shareholders

Consistent, high-quality returns on your investment

One-Year TSR 24.1%

Quarterly Dividend 35%

Return on Equity 19.2%

Earnings per Share 11.2%

F2006F2006

Page 15: Annual Meeting of Shareholders

Fiscal 2006 – Financial Results

Page 16: Annual Meeting of Shareholders

Fiscal 2006 Financial Results

Revenue$10,11

21.5%

MillionsMillions

Expenses (6,353) 0.3%

Provision for credit losses (176) n.a.Taxes/Minority Interest (920) n.a.

Net Income $2,663 11.2%

Growth Growth % vs % vs 20052005

Page 17: Annual Meeting of Shareholders

Achieved or surpassed four of five 2006 Financial Targets

EPS growth 5-10% 11.6%

TargetTarget

ROE 17-19% 19.2% Specific provision for credit losses

$400 MM or less

$211 MM

Tier 1 Capital Ratio Minimum 8% 10.22% Cash productivity improvement

100-150 bps 25 bps x

ActualActualPerformance MeasurePerformance Measure

Page 18: Annual Meeting of Shareholders

Leadership in dividend yield

0.530.550.590.650.71

0.880.930.991.09

1.29

1.80

2.13

1.18

0.80

1.50

92 93 94 95 96 97 98 99 00 01 02 03 04 05 06

Dividends Paid Per Share ($)

Last May, we increased BMO’s target dividend payout range to an industry leading 45%-55%

Page 19: Annual Meeting of Shareholders

Q1 2007 – Financial Results

Page 20: Annual Meeting of Shareholders

Broad-based growth and high-quality Q1 2007 earnings

* Excluding the Q1 F’07 restructuring charge of $88MM after-tax

Net Income$673 M

673606

Q1 06 Q1 07

585

**

Earnings per Share$1.30

1.13

1.30

1.17

Q1 06 Q1 07

**

Q1 06

Return on Equity18.0%

17.8 18.0

Q1 07

15.7

**

Page 21: Annual Meeting of Shareholders

Q1 2007 Financial Highlights*

* Excluding the Q1 F’07 restructuring charge

Revenue $2,614 4.1%

MillionsMillions

Expenses (1,625) 2.8%

Provision for credit losses (52) n.a.Taxes/Minority Interest (264) n.a.

Net Income $673 11.1%

Growth Growth % vs Q1 % vs Q1

20062006

Page 22: Annual Meeting of Shareholders

Revenue growth in operating groups ($million)

673606

696

Q1 06 Q4 06 Q1 07

Personal & Commercial Banking Yr/Yr Growth5.5%

1321

Q1 06

1394

Q1 07

Private Client GroupYr/Yr Growth8.9%

464

Q1 06

506

Q1 07

Investment Banking GroupYr/Yr Growth(3.6%)

743

Q1 06

716

Q1 07

Page 23: Annual Meeting of Shareholders

On track to achieve 2007 Financial Targets

EPS growth(ex. 2006 General allowance reduction)

5-10% 11.1%

Annual Annual TargetTarget

ROE 18-20% 18.0%

Specific provision for credit losses

$400 MM or lessrevised to:

$325 MM or less

$52 MM Cash productivity improvement

100-150 bps 72 bps

Actual Q1 Actual Q1 20072007

Performance MeasurePerformance Measure On TrackOn Track

Page 24: Annual Meeting of Shareholders

Success in meeting performance targets

2002 4 3

# of # of targetstargets

2003 5 5

2004 5 5

2005 5 4

2006 5 4

# of # of targets targets met ormet or

exceeded exceeded

Fiscal Fiscal YearYear

5 Year Total 24 21

Page 25: Annual Meeting of Shareholders

Leadership in risk management, financial disclosure and corporate governance

Page 26: Annual Meeting of Shareholders

Taking BMO to the next level

• Investing strategically

• Meeting customer needs

• Growing revenue

• Maintaining strong capitalbase

• Maximizing shareholder return

Page 27: Annual Meeting of Shareholders

KAREN MAIDMENT Chief Financial &Administrative Officer

Page 28: Annual Meeting of Shareholders

Investor Relationswww.bmo.com/investorrelations

Viki Lazaris, Senior Vice President(416) [email protected]

Steven Bonin, Director(416) [email protected]

FAX(416) 867-3367

[email protected]

Page 29: Annual Meeting of Shareholders

Annual Meeting of Shareholders

Page 30: Annual Meeting of Shareholders

To determine if a nominee is qualified to be a director of a bank, the person:

• must be a natural person who is at least eighteen years of age

• be of sound mind

• is not a bankrupt

• is not prohibited by the Bank Act from voting sharesof the Bank

• is not an officer, a director or a full time employee of an entity that is prohibited by the Bank Act from voting shares of the Bank

• is not an agent, employee, or minister of Her Majesty in rightof Canada or in right of a province, and

• is not an agent or employee of the government ofa foreign country or a political subdivision thereof.