Bank Of Montreal · TSX:BMO
Bank Of Montreal — Investor Day (January 2015)
128 slides from Bank Of Montreal's investor day presentation, Jan 29, 2015
Slide 1: BMO Investor Day: Canadian Personal & Commercial Banking and Wealth Management
BMO Investor Day: Canadian Personal & Commercial Banking and Wealth Management JANUARY 29, 2015 Investor Day Canadian Personal & Commercial Banking and Wealth Management January 2015 0
Slide 2: Forward looking statements & non-GAAP measures
Forward looking statements & non-GAAP measures Caution Regarding Forward-Looking Statements Bank 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 sec
Slide 3: Today's agenda
Today’s agenda • Welcome – Bill Downe, Chief Executive Officer • Introduction – Sharon Haward-Laird, Head, Corporate Communications and Investor Relations • Opening Remarks – Frank Techar, Chief Operating Officer • Canadian Personal & Commercial Banking presentations and Q&A - Cam Fowler, Group Head
Slide 4: Bill Downe, Chief Executive Officer
BMO Investor Day: Canadian Personal & Commercial Banking and Wealth Management JANUARY 29, 2015 Bill Downe Chief Executive Officer Investor Day Canadian Personal & Commercial Banking and Wealth Management January 2015 3
Slide 5: Frank Techar, Chief Operating Officer
BMO Investor Day: Canadian Personal & Commercial Banking and Wealth Management JANUARY 29, 2015 Frank Techar Chief Operating Officer Investor Day Canadian Personal & Commercial Banking and Wealth Management January 2015 4
Slide 6: Advantaged business mix
Advantaged business mix F2014 Financial Highlights F2014 Operating Group Revenue $4.5B Adjusted net income1 35% 22% 38% $2.0B Dividends declared 22% 18% 10.1% Common equity tier 1 ratio Canadian P&C WM U.S. P&C BMO CM 1 Reported net income $4.3B Investor Day Canadian Personal & Commercial Banking
Slide 7: Changing customer landscape and digitization
Changing customer landscape and digitization Insurance Branch image website design Full service #1 Mobile/ capture based on investment Remote tablet app customer needs advice online cheque capture with adviceDirect for businesses Investor Day Canadian Personal & Commercial Banking and Wealth Manag
Slide 8: Working together - across businesses and across borders
Working together - across businesses and across borders Wealth Management Client Referrals Joint Sales Efforts Canadian U.S. P&C P&C Customers Shared Capabilities Capital Markets Investor Day Canadian Personal & Commercial Banking and Wealth Management January 2015 7
Slide 9: We're here to help.
We’re here to help. Investor Day Canadian Personal & Commercial Banking and Wealth Management January 2015 8
Slide 10: Clear and consistent strategy
Clear and consistent strategy 1 Achieve industry-leading customer loyalty by delivering on our brand promise. 2 Enhance productivity to drive performance and shareholder value. 3 Leverage our consolidated North American platform to deliver quality earnings growth. 4 Expand strategically in select gl
Slide 11: Canadian Personal & Commercial Banking
BMO Investor Day: Canadian Personal & Commercial Banking JANUARY 29, 2015 Cam Fowler Group Head
Slide 12: Key messages
Medium term financial objectives A strong foundation • Exceptional leadership team Average • Renewed business platforms annual net • Seamless channel experience income • Unique strategic partnerships growth Key messages above 7% Market leading performance in F2014 Top tier • Top tier revenue and net
Slide 13: Our business today
• 46% of BMO’s earnings in F2014 • $6.5 billion of revenue • $2 billion in net income Our • $188 billion in average loans • $125 billion in average deposits business today • Over 7 million retail customers • Largest MasterCard1 and Air Miles issuer in Canada • 400,000 business clients • #2 market sh
Slide 14: Exceptional leadership team
Exceptional leadership team Canadian Personal & Commercial Banking Group Head Business leaders Payments leaders Distribution Personal Banking Retail Payments leaders Commercial Treasury & 8 divisions across Banking Payment Solutions Canada Investor Day Canadian Personal & Commercial Banking Janu
Slide 15: Renewed business platforms
Renewed business platforms Sales model Commercial Retail cards evolution banking platform conversion • Re-organized to bring • Local decision making • Migrated over 3.8 sales leaders closer to authority million personal credit customers card accounts to an • Technology • Increased capacity for enhan
Slide 16: Seamless channel experience
Seamless channel experience Digital Customer Contact Digital adoption driving online Centre sales and service Inbound service, cross sell and targeted outbound calls • Enhanced mobile banking app Customer • Leading integrated tablet app • North American alignment • DepositEdge for business clients •
Slide 17: Unique strategic partnerships
Unique strategic partnerships Investor Day Canadian Personal & Commercial Banking January 2015 16
Slide 18: Top tier performance in F2014
Top tier performance in F2014 Revenue Net Income1 ($MM) ($MM) 11% 6% 2,022 6,495 1,822 6,106 F2013 F2014 F2013 F2014 F2014 operating leverage: 2.1% 1 On an adjusted basis; reported net income F2013 $1,812MM; F2014 $2,014MM Investor Day Canadian Personal & Commercial Banking January 2015 17
Slide 19: Market leading performance in F2014
Market leading performance in F2014 Loans1 Deposits1 ($B) ($B) 8% 10% 125 188 175 114 F2013 F2014 F2013 F2014 1 Based on annual average Investor Day Canadian Personal & Commercial Banking January 2015 18
Slide 20: Well-diversified portfolio
Well-diversified portfolio Loan Mix - $188B1 Deposit Mix - $125B1 8% 9% 27% 32% 18% 29% 31% 46% Mortgages Personal Deposits ex Term Other Personal Loans - secured Personal Term Deposits Other Personal Loans - unsecured Commercial ex Term Commercial Loans & Commercial Term Acceptances and Corporate C
Slide 21: Market trends
Market Trends Market trends Moderating loan Dynamic payments Rising digital Evolving growth environment adoption regulatory expectations Investor Day Canadian Personal & Commercial Banking January 2015 20
Slide 22: Medium term financial goals
Medium term financial goals Average annual Top tier balance Productivity net income growth sheet growth in the mid 40s above 7% Investor Day Canadian Personal & Commercial Banking January 2015 21
Slide 23: Strategic priorities
Strategic priorities Superior Digital High Strong customer channel performing operating loyalty and acceleration teams discipline growth Investor Day Canadian Personal & Commercial Banking January 2015 22
Slide 24: Superior customer loyalty and growth
Superior customer loyalty and growth Personal Banking Commercial Banking Achieve #1 in Achieve #1 in customer loyalty customer loyalty Grow Grow primary primary Increase customers Build on strong products per customers and at ~5% per lending share customer share of wallet year Accelerate growth in I
Slide 25: Digital channel acceleration
Digital channel acceleration Deliver a category defining digital experience • Seamless integrated experience across channels, businesses and borders Build a robust digital sales engine Double • Increase digital adoption and transactions for customers digital sales • Focus on cross-sell opportunities
Slide 26: High performing teams
High performing teams Build on strong employee engagement Increase • Currently 81% and top tier in key categories, compared to engagement leading Canadian financial institutions1 by 5% Personal Banking salesforce productivity Increase sales force • Accelerating time to productivity productivity • Cr
Slide 27: Strong operating discipline
Strong operating discipline Risk management • Optimize risk return across our businesses • Effectively applied credit risk management practices Continue to deliver positive operating leverage • Disciplined expense management Lean processes • Increased digitization and simplified workflows Investor D
Slide 28: Focused on delivering market leading results
Focused on Medium term financial objectives delivering A strong foundation market • Exceptional leadership team Average • Renewed business platforms leading results • Seamless channel experience annual net income • Unique strategic partnerships growth above 7% Market leading performance in F2014 Top
Slide 29: Canadian Commercial Banking
Canadian Commercial Banking JANUARY 29, 2015 Steve Murphy Head, Canadian Commercial Banking
Slide 30: Proven strength in commercial banking
Proven strength in commercial banking F2014 Revenue Contribution Commercial 35% Personal • #2 market share in business lending1 35%65% • Strong leadership in local markets • #1 agriculture bank1 F2014 Net Income Contribution Personal • #1 corporate card issuer2 • Leader in product innovation 65% Com
Slide 31: Strong financial performance
Strong financial performance Revenue ($MM) Efficiency Ratio (%) 20bps +7% better 2,224 39.1% 2,074 38.9% F2013 F2014 F2013 F2014 Rank1 5th 2nd 1 Rank among 5 Canadian banks including BMO Investor Day Canadian Personal & Commercial Banking January 2015 Canadian Commercial Banking 30
Slide 32: Top tier balance sheet growth
Top tier balance sheet growth Loans1 ($B) Deposits1 ($B) +9% +9% 50 45 46 41 F2013 F2014 F2013 F2014 Rank2 4th 2nd Rank2 3rd 2nd 1 Based on annual average 2 Rank among 6 Canadian banks including BMO Investor Day Canadian Personal & Commercial Banking January 2015 Canadian Commercial Banking 31
Slide 33: Well-diversified loan portfolio
Well-diversified loan portfolio Total Canadian Commercial Loans: $50B1 2% 4% 3% 4% 21% • Good diversification by industry 5% and geography 5% • Strong credit risk management 8% 16% • F2014 PCL 23bps of portfolio 8% 9% 15% Real estate Retail Service Financial Agriculture Wholesale Auto Distribution a
Slide 34: Proven value of relationship management approach
Proven value of relationship management approach Customer Growth • #1 in Canadian Federation of +13.5% Independent Business Battle of the Banks survey1 • #1 in Account Manager Satisfaction (Bond Marketing Intelligence Survey) F2012 F2014 Share of Wallet Products per customer • Majority of mid-market
Slide 35: Value proposition extends across all customer segments
Value proposition extends across all customer segments Expansion 400,000 Customers Growth Startup Mid-size businesses Small Business Capital Markets Wealth Management Personal Banking Investor Day Canadian Personal & Commercial Banking January 2015 Canadian Commercial Banking 34
Slide 36: Attractive value proposition
Attractive Full relationship value • Proven credibility in the market • Solutions tailored to needs proposition • Senior BMO leadership engagement © National Post/ Peter J. Thompson Growing together • Multi-generation businesses • Identifying and meeting evolving needs • Working together as customer
Slide 37: Strategic priorities
Strategic priorities Superior High Strong customer performing operating loyalty and teams discipline growth Investor Day Canadian Personal & Commercial Banking January 2015 Canadian Commercial Banking 36
Slide 38: Getting to #1 customer loyalty
Getting to #1 customer loyalty • Opportunity to further improve customer loyalty and grow share of wallet by providing: – Payment solutions that save time – Multi-channel access – Real-time feedback at key moments Investor Day Canadian Personal & Commercial Banking January 2015 Canadian Commerci
Slide 39: Opportunity to build on #2 lending share
Opportunity to build on #2 lending share • Targeting growing and dynamic customer segments • Main geographic areas of focus are Ontario and Quebec • Target sectors include: – Manufacturing – Health Care – Franchising – Professionals Investor Day Canadian Personal & Commercial Banking January 201
Slide 40: Increase deposit share
Increase deposit share Gaining share by focusing on: • Innovative products and solutions in treasury and payments: - DepositEdge™ – remote cheque capture - PAYD™ Pro provided by Moneris 2-nd Online Banking for Business 3rd • Deposit-intensive sectors: - Knowledge-based industries 4th 4 th - Municipa
Slide 41: Strategic priorities
Strategic priorities Superior High Strong customer performing operating loyalty and teams discipline growth Investor Day Canadian Personal & Commercial Banking January 2015 Canadian Commercial Banking 40
Slide 42: High performing teams
High performing teams ~2,000 expert bankers • Relationship management with specialist overlay • Decision making authority in local markets • Rewarding careers Investment in learning • Comprehensive training curriculum • Full credit & cash management qualification • Extensive leadership development I
Slide 43: Strategic priorities
Strategic priorities Superior High Strong customer performing operating loyalty and teams discipline growth Investor Day Canadian Personal & Commercial Banking January 2015 Canadian Commercial Banking 42
Slide 44: Strong operating discipline
Strong operating discipline Lean processes 25% more • Simplified workflow time with • Segregation of duties customers • Visual management Technology 30% faster • New lending platforms loan • System integration processing • Credit administration automation Strong risk management Annual • Three lines
Slide 45: Atlantic Provinces Division
Atlantic Provinces Division JANUARY 29, 2015 Carolyn Booth Senior Vice President, Atlantic Provinces Division
Slide 46: Atlantic Provinces Division — market leading performance
Atlantic Provinces Division — market leading performance • #2 market share in business lending1; positioned to overtake #1 35% • #3 market share in deposits2 with good momentum Personal • Strong sales and credit leadership to manage customer needs in market 65% 1 Canadian Bankers Association; loan m
Slide 47: Priorities in action in Atlantic Provinces Division
Priorities in action in Atlantic Provinces Division Superior customer loyalty and growth High performing Strong operating teams discipline #1 customer loyalty Build on strong lending Highly engaged employees Improved productivity share and grow deposits • Relationship • Leadership in local markets •
Slide 48: Key takeaways
Key takeaways Large and profitable Customer relationship Employees are Sustained growth commercial business management drives our strength through execution with a track record profitability excellence of success Investor Day Canadian Personal & Commercial Banking January 2015 Canadian Commercia
Slide 49: Canadian Personal Banking
Canadian Personal Banking JANUARY 29, 2015 Ernie Johannson Head, Canadian Personal Banking
Slide 50: Strengthened personal banking business
Strengthened personal banking business F2014 Revenue Contribution Commercial • ~25% of total bank revenue and 35% Personal net income 35%65% • Personal market share of 11.5%1 with top tier F2014 improvement • Over 7 million customers Personal F2014 Net Income Contribution • Strong collaboration with
Slide 51: Strong financial performance
Strong financial performance Revenue ($MM) Efficiency Ratio (%) 130bps 6% better 57.1 4,271 55.8 4,032 F2013 F2014 F2013 F2014 Rank1 4th 2nd 1 Rank among 5 Canadian banks including BMO Investor Day Canadian Personal & Commercial Banking January 2015 Canadian Personal Banking 50
Slide 52: Market leading balance growth
Market leading balance growth Loans1 ($B) Deposits1 ($B) 7% 10% 138 129 80 72 F2013 F2014 F2013 F2014 Rank2 3rd 1st Rank2 4th 2nd 1 Based on annual average 2 Rank among 6 Canadian banks including BMO Investor Day Canadian Personal & Commercial Banking January 2015 Canadian Personal Banking 51
Slide 53: Well-diversified loan portfolio
Well-diversified loan portfolio Total Canadian Consumer Loans: $138B1 7% 6% • 89% of loan portfolio is secured 7% • F2014 PCL 31bps of portfolio • Consumer lending products loss rates 62% 18% lower than peer average2 • 63% of mortgages are insured • 58% LTV on uninsured mortgage portfolio Mortgages
Slide 54: Primary customer growth
Primary1 customer growth Conversion to primary customers2 Increased primary customer share of wallet3 5x ~450 bps F2013 F2014 F2013 F2014 Primary customers generate 3.5 times more revenue 1 Primary defined as customers that have a chequing account with high levels of engagement and additional produc
Slide 55: Renewed personal banking business platforms
Renewed personal banking business Renewed business platforms platforms Product Sales force Technology Investor Day Canadian Personal & Commercial Banking January 2015 Canadian Personal Banking 54
Slide 56: Accelerated mortgage growth
Accelerated mortgage growth Mortgage Balances1 ($B) 10% CAGR 86 65 F2011 F2014 • Stable mortgage spreads • New customers added • Strong cross-sell • Good credit quality 1 Based on annual average Investor Day Canadian Personal & Commercial Banking January 2015 Canadian Personal Banking 55
Slide 57: Accelerated deposit growth
Accelerated deposit growth Deposit Balances1 ($B) 6% CAGR 80 67 F2011 F2014 • 10% growth in F2014 • Successful marketing campaigns • Expanded term channels and strengthened product mix 1 Based on annual average Investor Day Canadian Personal & Commercial Banking January 2015 Canadian Personal Ba
Slide 58: Enhanced sales force productivity
Enhanced sales force productivity Management Performance People structure management • Trained 2,300 general bankers in half the time • 3 times gross mutual fund sales per general banker • 7% increase in general banker sales productivity Investor Day Canadian Personal & Commercial Banking Januar
Slide 59: Delivered digital and technology platforms
Delivered digital and technology platforms Customer insights and Retail lending platform Retail cards platform Digital capabilities lead capabilities Investor Day Canadian Personal & Commercial Banking January 2015 Canadian Personal Banking 58
Slide 60: Canadian Personal Banking
Investor Day Canadian Personal & Commercial Banking January 2015 Canadian Personal Banking 59
Slide 61: Strategic priorities
Strategic priorities Superior Digital High Strong customer channel performing operating loyalty and acceleration teams discipline growth Investor Day Canadian Personal & Commercial Banking January 2015 Canadian Personal Banking 60
Slide 62: Expand share of wallet and capitalize on acquisition
Expand share of wallet and capitalize on acquisition Expand existing customer relationships Build upon customer acquisition strength • Grow share of wallet in mortgages, ~ 4 million Canadians in market annually other lending and mutual funds Ranked #1 • Continue to increase number of New product at
Slide 63: Payments key to superior customer engagement and growth
Payments key to superior customer engagement and growth Unique strategic Canada’s #1 Travel Industry leading Emerging digital partnerships Rewards Credit Card1 card platform payments 1 2014 rankings by Rewards Canada Investor Day Canadian Personal & Commercial Banking January 2015 Canadian Perso
Slide 64: Strategic priorities
Strategic priorities Superior Digital High Strong customer channel performing operating loyalty and acceleration teams discipline growth Investor Day Canadian Personal & Commercial Banking January 2015 Canadian Personal Banking 63
Slide 65: Building a leading digital platform
Building a leading digital platform Mobile Tablet Online • #1 on Android / Blackberry and #2 • #1 integrated Apple iPad app1 • Industry leading online appointment on Apple1 • Best in class Personal Financial booking3 and 45% increase YoY • #2 Forrester Canadian Mobile Management for Apple iPad app1
Slide 66: Strategic priorities
Strategic priorities Superior Digital High Strong customer channel performing operating loyalty and acceleration teams discipline growth Investor Day Canadian Personal & Commercial Banking January 2015 Canadian Personal Banking 65
Slide 67: Greater Toronto Division
Greater Toronto Division JANUARY 29, 2015 Andrew Auerbach Senior Vice President, Greater Toronto Division
Slide 68: Greater Toronto Division — key market
Greater Toronto Division — key market • Represents 16% of total personal loans and 16% of deposits with 2,300 employees • Concentrated market demand with over 11% 35% population and household income growth1 • Refresh of 21% of branches over past two years • Local market leadership, sales discipline
Slide 69: Highly productive sales model
Highly productive sales model Financial Services Manager Customer Service Representative Financial Planner Mortgage Specialist Call Centre Agent Investor Day Canadian Personal & Commercial Banking January 2015 Canadian Personal Banking 68
Slide 70: Greater Toronto Division — employee engagement
Greater Toronto Division — employee engagement • 85% Employee Engagement Index – +9 vs other financial institutions1 – +2 vs leading global companies1 • 90% of our employees agree that our customers are our top priority • Local market leadership 1 Employee Engagement Index Investor Day Canadian Pe
Slide 71: Building on our high performance workforce
Building on our high performance workforce Market Capacity Sales force Leads Performance expansion optimization mobility generation management Investor Day Canadian Personal & Commercial Banking January 2015 Canadian Personal Banking 70
Slide 72: Strategic priorities
Strategic priorities Superior Digital High Strong customer channel performing operating loyalty and acceleration teams discipline growth Investor Day Canadian Personal & Commercial Banking January 2015 Canadian Personal Banking 71
Slide 73: Strong operating discipline
Strong operating discipline Segment led • Optimization of resources • Consistency of customer and employee experience • Enhanced pricing discipline and analytics • Visual Management Process • Redefined through our brand lens • Enabled through digitization Strong risk management • Risk/reward optimiz
Slide 74: Executing on our priorities will drive our medium term objectives
Executing on our priorities will drive our medium term objectives Improve sales Double ~100bps Grow primary force digital sales annual customers at productivity to 14% in productivity ~5% per year by 3-5% per medium term improvement year Investor Day Canadian Personal & Commercial Banking Januar
Slide 75: Key takeaways
Key takeaways Revitalized personal Opportunity to grow Employees are our Sustained growth business with strong customer share of strength through execution platforms wallet, payment excellence business and digital channels Investor Day Canadian Personal & Commercial Banking January 2015 Canadian
Slide 76: BMO Investor Day: Wealth Management
BMO Investor Day: Wealth Management JANUARY 29, 2015 Gilles Ouellette Group Head
Slide 77: Executive summary
Executive summary • BMO Wealth Management services include Full Service Investing, Direct Brokerage, Private Banking, Global Asset Management and Insurance Who we are • Serves a full range of client segments, from mass retail to ultra high net worth and institutional • Operates in Canada, United Sta
Slide 78: Contribution to BMO revenue has grown
Wealth Management as % of Total Bank Operating Group Revenue Contribution F2009 F2014 to BMO revenue has 26% 22% grown since 57% 56% 22% F2009 17% P&C WM BMO CM Investor Day Wealth Management January 2015 77
Slide 79: A diversified business built through strong organic growth and strategic acquisitions
A diversified business built through strong organic growth and strategic acquisitions 2007: Acquired 2009: Acquired Pyrford 2012: Acquired AIG Life Canada International Equity Interest in COFCO Trust Co. 2011: Acquired Lloyd George Management 2009: Launched 2012: Launched 2014: Acquired F&C 2010: La
Slide 80: A well-diversified business mix and exceptional leaders
A well-diversified business mix and exceptional leaders F2014 Revenue by Wealth Management Line of Business Business Leaders 28% 31% Wealth Management Gilles Ouellette 5% Global Asset Direct Private Banking 12% Management Brokerage Myra Cridland Barry McInerney 24% Julie Barker-Merz Darrel Hackett R
Slide 81: Our leadership position is a competitive advantage
Our leadership position is a competitive advantage Among the Big 5 bank-owned full service brokerages, BMO Nesbitt Burns had the highest client loyalty score1 Among the Big 5 bank-owned online brokerages, BMO InvestorLine had the highest client loyalty score2 BMO InvestorLine named top bank-owned on
Slide 82: Gaining market share across our businesses
Gaining market share across our businesses Market Share Among Big 5 Banks1 BMO InvestorLine2 +206 Full Service Investing3 +130 bps bps F2009 F2014 F2011 F2014 BMO Mutual Funds +314 BMO Private Banking +253 and ETFs bps bps F2009 F2014 F2009 F2014 1 Big 5 Banks includes: BMO, RBC, TD, Scotia and CIBC
Slide 83: Strong track record of financial performance
Strong track record of financial performance Adjusted Net Income1 ($MM) Revenue ($MM) AUA/AUM ($B) +18% +14% CAGR CAGR 3,833 +27% 848 CAGR 794 2,016 363 239 F2009 F2014 F2009 F2014 F2009 F2014 • Top tier revenue growth vs. Big 5 banks • Adjusted efficiency ratio improved by 588bps since F20092 • Pro
Slide 84: Strategic priorities and financial objectives
Strategic priorities and financial objectives Medium term Our strategic priorities financial objectives 1. Earnings CAGR comparable Enhance our to historical 15–20% range Improve Invest for client productivity future growth 2. Average annual operating experience leverage above 2% Investor Day Weal
Slide 85: Today's themes
Today’s themes A proven track Well positioned Broad Strong internal Targeting record of strong for continued manufacturing partnerships continued financial growth with capabilities earnings growth performance the right people of 15–20% over across and products the medium term businesses Investor Day
Slide 86: BMO Global Asset Management
BMO Global Asset Management JANUARY 29, 2015 Barry McInerney Rajiv Silgardo Co-CEOs, BMO Global Asset Management
Slide 87: A global firm and among Top-50 managers worldwide
A global firm and among Top-50 managers worldwide1 F2014 Revenue Contribution • Diversified client base: 24 offices in 14 countries to 24% serve clients across 5 continents • More than 250 investment strategies 12% • Proven history of successful organic growth and 28% strategic acquisitions • Strong
Slide 88: Consistent track record of strong financial performance
Consistent track record of strong financial performance Revenue ($MM) Adjusted Net Income1 1,074 28% CAGR 27% CAGR 312 F2009 F2014 F2009 F2014 AUM ($B) 307 • Organic AUM growth, enhanced 39% CAGR by the addition of F&C in F2014 59 F2009 F2014 1 Reported net income CAGR F2009-2014: 24% Investor Day
Slide 89: Proven history of strong organic growth and strategic acquisitions
Proven history of strong organic growth and strategic acquisitions 1 1 1 Strategic investments in COFCO and Fullgoal Investor Day Wealth Management • January 2015 BMO Global Asset Management 88
Slide 90: Multi-disciplinary capabilities across a wide range of asset classes
Multi-disciplinary capabilities across a wide range of asset classes BMO Global Asset Management BMO GAM (Canada) BMO GAM (U.S.) BMO GAM (EMEA) BMO GAM (Asia) • Fundamental • Fundamental • Fundamental • Asian Equities • Quantamental Equities • Quantitative Equities • Quantitative Equities • Indian E
Slide 91: Attractive diversification of AUM and client base
Attractive diversification of AUM and client base Asset Class1 Client Location1 Client Type1 26% 6% 26% 19% 38% 8% 6% 32% 62% 28% 49% Fixed Income Europe Institutional Equity Canada Retail Multi-asset U.S. Other 2 Rest of world Alternatives • Strategically located to deliver investment solutions to
Slide 92: Top-tier market share growth in Canada
Top-tier market share growth in Canada Mutual Funds – Big 5 Banks1 ETF – Industry2 83 24.30% • Industry pioneer with a unique 11.55% bps complementary offering of mutual funds and ETFs 10.72% • One of the fastest growing 0% global ETF providers F2009 F2014 F2009 F2014 • One of Benefits Canada’s Top
Slide 93: BMO ETFs growth strategy
BMO ETFs growth strategy Category Continued New client growth innovation segments • BMO GAM has won by bringing new investment strategies to market in ETF form • We have several levers to drive continued strong growth in the years ahead Benefits of ETFs to BMO GAM • Compelling differentiation of BMO
Slide 94: Recognition for excellence
Recognition for excellence Wins Best Specialty ETF at 2014 Morningstar Canadian Investment Awards: BMO Global Infrastructure ETF Best Energy Equity funds over three years: BMO Global Energy Class Series A and BMO Junior Oil Index ETF Best Global Equity fund over three years: BMO Global Infrastructur
Slide 95: Strategic priorities
Strategic priorities Enhance our client Improve Invest for experience productivity future growth • Bring global investment • Drive revenue growth and • Expand distribution and servicing expertise to realize synergies via cross- network globally local client solutions border packaging and sales • Sel
Slide 96: Key takeaways
Key takeaways Diversified Broad and deep Strong Scalable client base investment investment distribution will manufacturing performance drive future growth Investor Day Wealth Management • January 2015 BMO Global Asset Management 95
Slide 97: Full Service Investing
Full Service Investing JANUARY 29, 2015 Charyl Galpin Head, Full Service Investing
Slide 98: Established full service investment business
Established full service investment business F2014 Revenue Contribution 24% • Approximately 1,300 Investment Advisors in 50 branches 12% • $138 billion in AUM/AUA 28% - Ranked #3 in asset market share in industry — closing in on #21 5% 31% - Highest proportion of fee-based assets among bank-owned de
Slide 99: Consistently strong financial performance
Consistently strong financial performance Revenue ($MM) Net Income 7% CAGR $1,187MM 21% $1,187MM 1,187 CAGR $833MM $833MM 833 F2009 F2014 F2009 F2014 AUA/AUM ($B) Revenue per Investment Advisor (“IA”) 9% CAGR 9% CAGR $1,187MM 138 91 $833MM F2009 F2014 F2009 F2014 Investor Day Wealth Management J
Slide 100: Distinctive, consistent experience driving client loyalty
Distinctive, consistent experience driving client loyalty • We know what matters most to our clients: - Focus on financial planning - Regular portfolio reviews - Ongoing contact • Strong client loyalty - Named Best Full Service Investment Advisory in Canada in 2014 by Global Banking & Finance Review
Slide 101: Strategic priorities
Strategic priorities Enhance our client Improve Invest for experience productivity future growth • Focus on target clients • Attract, develop and • Enhance collaboration and • Advance financial retain top IAs cross-sell across BMO to planning • Increase revenue per IA drive future growth Investor Da
Slide 102: Strategic priority: focus on target clients
Strategic priority: focus on target clients 75% of households generate 98% of revenue • Deliver a distinctive, consistent 75% 98% experience to our target clients with a focus on financial plans, regular portfolio reviews and ongoing contact • Work with remaining clients to transition to other bank
Slide 103: Strategic priority: attract, develop and retain top IAs
Strategic priority: attract, develop and retain top IAs • Attract, develop and retain IAs with strong Top vs. All IAs production that grow faster than peers and provide a distinctive, consistent client experience 13% • Continue to provide best-in-class tools and platforms 8% • Strengthen our recruit
Slide 104: Strategic priority: enhance collaboration and cross-sell across BMO
Strategic priority: enhance collaboration and cross-sell across BMO • Deepen relationships with internal partners to deliver the full value of BMO to every client • Pilot in-house Private Bankers to serve Full Service Investing clients Investor Day Wealth Management January 2015 Full Service Inv
Slide 105: Key takeaways
Key takeaways Optimized and Focused on target Attracting, Enhancing strengthened clients with a developing and collaboration and leadership and differentiated client retaining top talent cross-sell across sales structure experience BMO to drive future growth Investor Day Wealth Management Januar
Slide 106: BMO InvestorLine
BMO InvestorLine JANUARY 29, 2015 Julie Barker-Merz President, BMO InvestorLine
Slide 107: Industry leading online brokerage; award-winning platform
Industry leading online brokerage; award-winning platform F2014 Revenue Contribution • Leading edge online brokerage capabilities exceeding 24% client expectations at a competitive price • 2 investing services in 4 languages across 12% 4 channels 28% • $43 billion in AUA, with 5-year CAGR of 13% • 3
Slide 108: Good financial performance
Good financial performance Revenue ($MM) Net Income 5% 3% CAGR CAGR 195 155 F2009 F2014 F2009 F2014 AUA ($B) Total Accounts Trade Volumes 13% 8% 5% CAGR 43 CAGR CAGR 23 F2009 F2014 F2009 F2014 F2009 F2014 Investor Day Wealth Management January 2015 BMO InvestorLine 107
Slide 109: Strong industry award recognition
Strong industry award recognition Among the Big 5 bank-owned online brokerages, BMO InvestorLine had the highest client loyalty score1 Top bank-owned online Best Online Brokerage 2014 brokerage for the fourth consecutive year Best Online Brokerage 2013 & 2014 Canada’s Best Discount Brokerage 2014 1
Slide 110: Strategic priorities
Strategic priorities Enhance our client Improve Invest for experience productivity future growth • Integrated banking and self- • Redesign onboarding • Market-leading solutions for directed investing tablet app • Utilize client analytics key segments • Focus on strategic segments • Continue to enhan
Slide 111: Key takeaways
Key takeaways Award-winning, Deep-rooted commitment Focused on enhancing innovative online to clients cross-sell opportunities to brokerage drive future growth Investor Day Wealth Management January 2015 BMO InvestorLine 110
Slide 112: BMO Insurance
BMO Insurance JANUARY 29, 2015 Peter C. McCarthy President & CEO, BMO Insurance
Slide 113: A good strategic fit with Wealth Management
A good strategic fit with Wealth Management F2014 Revenue Contribution • Distinct, well-diversified businesses: Life, Creditor, 24% Reinsurance • Net premium growth to $1.4 billion, a 5-year CAGR 12% of 15% • Strong asset growth to $8.2 billion, a 5-year CAGR 28% of 13% • Life insurance is a good st
Slide 114: Consistently strong financial performance
Consistently strong financial performance Revenue ($MM) Adjusted Net Income1 8% CAGR 9% 464 CAGR 312 F2009 F2014 F2009 F2014 Total Assets ($B) Net Premiums 15% 13% CAGR CAGR 8.2 4.5 F2009 F2014 F2009 F2014 1 Reported net income CAGR F2009-2014: 9% Investor Day Wealth Management January 2015 BMO
Slide 115: Strategically choosing where we compete
Strategically choosing where we compete Life Insurance Creditor Insurance Reinsurance • Maintain competitive position, • Sell insured loans to • Develop a diversified capitalize on savings, enhance Personal & Commercial portfolio of uncorrelated Strategy products and improve customer Banking and Wea
Slide 116: Strategic priorities
Strategic priorities Enhance our client Improve Invest for experience productivity future growth • Develop new products and • Expand direct-to-customer • Improve systems to drive distribution to meet changing marketing sales client needs • Enhance collaboration across • Leverage technology to • Focu
Slide 117: Key takeaways
Key takeaways Broad internal and Innovative and comprehensive Life Leveraging external distribution and Creditor product offering that relationships and complements focus on financial expertise across BMO planning to drive future growth Investor Day Wealth Management January 2015 BMO Insurance 1
Slide 118: BMO Private Banking
BMO Private Banking JANUARY 29, 2015 Myra Cridland Head, BMO Private Banking, Canada & Asia
Slide 119: A leading position in Canada and growth in Asia
A leading position in Canada and growth in Asia F2014 Revenue Contribution 24% • Exclusive focus on high net worth and ultra high net worth families • Customized planning is the cornerstone to every family 12% relationship 28% • Offer full range of wealth products and solutions including wealth plan
Slide 120: Strong financial results in Canada
Strong financial results in Canada Revenue Net Income 12% CAGR 20% CAGR F2009 F2014 F2009 F2014 Funds Managed and Administered1 ($B) 13% • Consistently strong revenue per FTE CAGR 40 22 F2009 F2014 1 Consists of: Assets Under Management, Assets Under Administration and Funds Administered Investor Da
Slide 121: Our differentiated business model drives recognition for excellence
Our differentiated business model drives recognition for excellence • Differentiated business model offers clients a single point of contact : - Team structure: consisting of a dedicated Relationship Manager supported by a team of 5-6 wealth experts brings the entire private banking experience to th
Slide 122: Strategic priorities
Strategic priorities Enhance our client Improve Invest for experience productivity future growth • Deepen relationships through • Utilize client analytics to • Offer greater depth and wealth planning focus execution breadth of products • Invest in platforms and digital • Transition clients to the •
Slide 123: Key takeaways
Key takeaways Differentiated Successful, Strong track Targeted go-to-market established partner record of game plan to model referral track record business results grow across BMO and continued momentum Investor Day Wealth Management January 2015 BMO Private Banking 122
Slide 124: Closing remarks: Frank Techar, Chief Operating Officer
BMO Investor Day: Canadian Personal & Commercial Banking and Wealth Management JANUARY 29, 2015 Frank Techar Chief Operating Officer Investor Day Canadian Personal & Commercial Banking and Wealth Management January 2015 123
Slide 125: Canadian P&C – key takeaways
Canadian P&C – key takeaways Strategic priorities Medium term objectives 1. Average annual net Superior income growth High customer Digital channel above 7% performing loyalty and acceleration team growth 2. Productivity in the mid 40s Investor Day Canadian Personal & Commercial Banking and Wealth
Slide 126: Wealth Management – key takeaways
Wealth Management – key takeaways Strategic priorities Medium term objectives 1. Earnings CAGR comparable to historical Enhance our Improve Invest for 15–20% range client productivity future growth experience 2. Average annual operating leverage above 2% Investor Day Canadian Personal & Commercial
Slide 127: BMO Investor Day: Canadian Personal & Commercial Banking and Wealth Management
BMO Investor Day: Canadian Personal & Commercial Banking and Wealth Management JANUARY 29, 2015 Investor Day Canadian Personal & Commercial Banking and Wealth Management January 2015 126
Slide 128: Disclosures
Disclosures Morningstar Disclosure: Morningstar Awards 2014©. Morningstar, Inc. All Rights Reserved. Awarded to BMO InvestorLine for Best Online Brokerage, Canada Global Financial Market Review, an online investment and finance publication, recognizes companies through its annual awards that have ex