BMO Putting More Emphasis on Branch Sales - CEO Downe

    Chicago-Based Harris Bank Particularly Well-Positioned to Weather
    Difficulties Facing U.S. Housing Market

    TORONTO, Sept. 11 /CNW/ - Speaking at Scotia Capital's Financials Summit
2007 Conference, Bill Downe, President and Chief Executive Officer of BMO
Financial Group, stated that the company is focusing more sharply on customer
service and growth in its core businesses.

    In referring to comments by Federal Reserve Chairman Ben Bernanke, who
stated in a recent speech that delinquency rates for sub-prime mortgages with
adjustable rates rose to about 13.5% in June, Mr. Downe stressed, "Harris does
not originate sub-prime and has very little direct retail exposure with
sub-prime characteristics. Harris's overall delinquency rate was 0.4% in

    Commenting on the major renewal of management of BMO's Canadian retail
banking arm, Mr. Downe said, "The new executive team has considerable line
experience, and throughout the organization, managers are closer to the
customers, and decision-making is closer to the front line. More than a third
of the 28 district heads are new appointments."

    "Our branch network is key to our strategy. We will concentrate our
investment spending on our branch network in high growth areas. We're also
going "green" by deploying emission free electricity under a contract that
will ultimately support up to 53 locations. This should position BMO as the
premier financial institution in Canada on Bullfrog Power's green index," said
Mr. Downe.

    "Another program designed to take share is our loyalty program that
rewards AIR MILES Collectors for all of their debit card transactions. We are
confident that this will build deposits. For example, in July, the first full
month since the launch, account openings were up 25% over the prior year,"
added Mr. Downe.

    Mr. Downe said, "We've put new tools in the hands of our bankers, which
are returning at least 40 minutes per day to bankers on the front line."

    BMO's Canadian personal and commercial banking business posted record
earnings of $350 million in the third quarter, up 14% over a year ago,
excluding the IPO gain related to MasterCard International and tax recoveries.
Cash productivity was 53.3%, also a record. Year over year, revenue in
commercial banking grew almost 7%, loans grew 7.7%, and deposits grew 9.6% as
share increased strongly for the second quarter in a row, rising 56 basis
points year over year.

    Mr. Downe noted that BMO's emphasis on branch-originated sales is
paying-off in its cards business, where core revenues grew 13% year over year.
Year to date, BMO has seen new cardholders rise by 40% and the number of
applications coming from the branches has increased by 118%. Mr. Downe said
BMO is looking for the best way to distribute other products through its
branches. "In our mortgage business, we exited the broker channel, which has
low spread and fewer cross-sell opportunities. We are hiring more mortgage
specialists. We expect to increase volumes and regain lost share - but with a
much higher margin, "added Mr. Downe.

    Commenting on the performance of the Private Client Group, Mr. Downe
stated, "The Private Client Group is delivering outstanding results. PCG's
efficiency is top decile, with a cash productivity ratio of 68.4%."
    BMO Capital Markets reported net income of $196 million in the third
quarter. "Excluding the impact of the commodities losses, these are
exceptional results," said Mr. Downe. Adjusted for those losses, earnings grew
45% from a year ago to $293 million.

    BMO's U.S. personal and commercial arm Chicago-based Harris Bank has, for
the past three quarters, averaging acquisition integration expenses of between
$4 million and $6 million, but without those expenses, Q1, Q2, and Q3 of this
year generated consecutive growth in earnings -- up 19% from Q4, 2006.
Mr. Downe noted, "We have a very strong franchise here with an enviable
network of high quality locations, strong customer satisfaction and loyalty
scores, and a breadth of service beyond the reach of smaller competitors. We
see real opportunity in business banking. We can gain real leverage as we add
more branches to our network."

    Mr. Downe's presentation and the question and answer period will be
archived for one year following the conference date at

    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
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
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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
    Assumptions about the future performance of the Canadian and U.S.
economies and how that will affect our businesses were material factors we
considered when setting our strategic priorities and objectives and in
determining our financial targets, including provisions for credit losses. Key
assumptions included that the Canadian and U.S. economies would expand at a
moderate pace in 2007 and that inflation would remain low. We also assumed
that interest rates in 2007 would remain little changed in Canada but decline
in the United States and that the Canadian dollar would hold onto its value
relative to the U.S. dollar. The Canadian dollar has strengthened relative to
the U.S. dollar and interest rates have increased in the United States, but we
believe that our other assumptions remain valid. We have continued to rely
upon those assumptions and the views outlined in the following Economic
Outlook in considering our ability to achieve our 2007 targets. 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

For further information:

For further information: Media Relations: Ralph Marranca, Toronto,, (416) 867-3996; Ronald Monet, Montreal,, (514) 877-1101; Investor Relations: Viki Lazaris,
Toronto,, (416) 867-6656; Steven Bonin, Toronto,, (416) 867-5452; Krista White, Toronto,, (416) 867-7019; Internet:

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