Improving processes and streamlining support functions will contribute to
BMO's ability to reinvest in growth and customer service initiatives
TORONTO, Jan. 31 /CNW/ - BMO Financial Group (NYSE: BMO, TSX: BMO) today
announced a restructuring charge of $135 million ($88 million after tax) that
it will record in its first quarter earnings when they are released on
March 1, 2007.
The charge reflects BMO's previously-stated intention to enhance customer
service and focus on:
- directing spending and resources on front-line sales and service
- creating more efficient processes and systems across the company;
- continuing and accelerating the pace of the company's growth.
The restructuring efforts announced today are the results of a
comprehensive review of the efficiency and effectiveness of all support
functions, business groups and processes that support sales and service.
The charge relates to the elimination of approximately 1,000 jobs in
primarily non-customer-facing areas of the company across all support
functions and business groups. Of the charge, $117 million relates to
severance-related costs and $18 million relates to non-employee-related costs.
The company noted that the benefits of the cost savings from this
initiative are important to achieving the 2007 financial targets provided in
its 2006 fourth quarter earnings release.
"BMO's biggest competitive advantage is our people so it is always tough
to take decisions that result in job eliminations," said Tony Comper, BMO
Financial Group's President and Chief Executive Officer. "However, we owe it
to our customers, our employees and our shareholders to have lean, efficient
support functions, simplified processes, fewer layers and to eliminate
duplication across our enterprise."
BMO expects to continue implementing these initiatives throughout 2007
and beyond, with the majority of job reductions occurring in fiscal 2007.
Bill Downe, Chief Operating Officer, BMO Financial Group, commented,
"When fully implemented, these changes will help our employees to deliver
improved service to our customers and will provide us with a competitive and
sustainable cost base. The savings will fund future growth and our front-line
operations. In the past year, we have made investments in customer service,
increased the number of sales professionals and pursued a lean, proactive
center to support the company. These efforts will deliver improved benefits
for our customers, and make it simpler for employees to deliver exceptional
service and win business for our company."
He added: "Consistent with our normal practices, job reductions will be
handled equitably and fairly, and we will move quickly and decisively to
achieve our goals."
Established in 1817 as Bank of Montreal, BMO Financial Group is a highly
diversified North American financial services organization. With total assets
of $320 billion as at October 31, 2006, and 35,000 employees, BMO provides a
broad range of retail banking, wealth management and investment banking
products and solutions. BMO Financial Group serves clients across Canada
through its Canadian retail arm, BMO Bank of Montreal and through its wealth
management firms BMO Nesbitt Burns, BMO InvestorLine and BMO Harris Private
Banking. BMO Capital Markets, our North American investment and corporate
banking division, provides a full suite of financial products and services to
our North American and international clients. In the United States, BMO serves
clients through Chicago-based Harris, an integrated financial services
organization that provides more than one million personal and business clients
with banking, lending, investing, financial planning, trust administration,
portfolio management, family office and wealth transfer services.
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 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
include, 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 these presentations 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; 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 markets activity; the possible effects on our
business of war or terrorist activities; disease or illness that affects
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 our 2006 Annual
Report concerning the effect certain key factors could have on actual 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 provision 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 also have 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 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.
For further information:
For further information: Media Relations Contacts: Ralph Marranca,
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firstname.lastname@example.org, (416) 867-5452; Krista White, Toronto,
email@example.com, (416) 867-7019; Internet: www.bmo.com