2023 Annual Report:
Message to Shareholders

By Darryl White
Chief Executive Officer, BMO Financial Group
Dec 1, 2023

Download the 2023 Annual Report: Message to Shareholders (PDF)

By Darryl White
Chief Executive Officer, BMO Financial Group
Dec 1, 2023

Download the 2023 Annual Report: Message to Shareholders (PDF)

2023 saw emerging challenges in the global economy, impacted by rising interest rates, weaker financial conditions and compounded by the escalation of geopolitical crises. While growth of inflation fell sharply from four-decade highs across North America, further progress towards normalizing could be impeded by ongoing cost pressures in the services sector. With persistently high inflation and weaker global demand due to higher costs of borrowing, the potential for an economic downturn remains elevated both in Canada and the U.S., with higher risks north of the border.

The clean energy transition, the accelerated at-scale availability of advanced technologies, artificial intelligence and otherwise, and rapidly reorganizing geopolitical relationships are three transversal trends impacting global economies and presenting new opportunities and risks to BMO and to our clients.

Within this macroeconomic context, BMO has been reinforcing and expanding the foundations of our bank to position us strongly for the future – and this year we’ve made tremendous progress on that agenda.

Our successful acquisition of Bank of the West is now complete, and BMO is the most integrated North-South bank on the continent. The completion of this natural next step in our North American growth strategy has significantly expanded our market access to high-growth regions of the United States and strengthened our competitive position as the eighth largest bank in North America by assets.

Serving our clients across a wider geographical footprint than ever before, we now have more opportunities to Boldly Grow the Good in business and life for all of our stakeholders. 

Alongside other notable acquisitions, including the AIR MILES Reward Program, we are building a high-performing, digitally enabled, future-ready bank with leading efficiency, profitability and loyalty. Our newest colleagues are united and energized by our industry-leading winning culture. Serving our clients across a wider geographical footprint than ever before, we now have more opportunities to Boldly Grow the Good in business and life for all of our stakeholders.

In a year with so much achieved by Team BMO, we’ve been proud to put our Purpose into action. It starts by helping our clients and communities make real financial progress – because when they succeed, we succeed.

For our customers, access to expert advice through a dynamic operating environment is key to achieving their financial goals – today and into the future. As a team of bankers aligned in our objective of meeting and exceeding our clients’ expectations, we are actively teaming up across our businesses to deliver industryleading customer experience. The results are clear: this year, we were ranked #1 in personal banking customer satisfaction among Canada’s “Big Five” banks in the J.D. Power 2023 Canada Retail Banking Satisfaction Study1.

This recognition reinforces the trust our customers place in us and builds on our leading reputation of customer satisfaction in retail banking advice, earned by the expert guidance we provide our clients as they navigate the evolving economy.

Digital First

We lead with a digital-first mindset to drive progress for our customers, unlock the power of our people and deliver loyalty, growth and efficiency. Digital is at the centre of how we operate, powering our teams to build solutions that free up more human capacity to do what we do best: give expert advice.

We have a strong track record of industry recognition for providing customer-centric experiences. Our leading digital money management tools and experiences received the highest score in the J.D. Power 2023 Canada Online Banking Satisfaction Study1. BMO also received Celent’s Retail Digital Banking Transformation Award in recognition of our leadership in digital transformation, and its Customer Financial Resilience Award for our commitment to enhancing the customer experience. Our commercial banking digital offerings received a Datos Insights Impact Award for our leading use of artificial intelligence and advanced analytics, while our capital markets team was recognized with a Breaking the Status Quo award from Fintech Open Source Foundation for our progress on open source readiness.

BMO was the only financial institution named among the top 30 companies on Fast Company’s fifth annual Best Workplaces for Innovators list, honouring organizations that demonstrate a commitment to encouraging and developing innovation enterprise-wide.

The scope of digital goes deeper, not only for the quality of customer interactions, but also to powering technological change across our teams resulting in advanced analytics, stronger insights and agile decision-making. This was clearly evident as we successfully converted nearly 2 million new customers to our systems, a critical step in our integration of Bank of the West. We are extremely proud that BMO was the only financial institution named among the top 30 companies on Fast Company’s fifth annual Best Workplaces for Innovators list, honouring organizations that demonstrate a commitment to encouraging and developing innovation enterprise-wide.

North American integration

Significant advancements in our U.S. franchise laid the groundwork for our successful integration of Bank of the West – the largest acquisition in Canadian banking history.

Our strategic focus on North American growth, supported by a global presence that provides our clients access to the world, sets BMO apart from our competitors. While we’ve operated in the U.S. since 1818, our acquisition of Harris Bank in 1984 established a meaningful presence that was advanced with our 2011 acquisition of Marshall & Ilsley Corporation (M&I) and expanded in 2023 with Bank of the West. BMO is now a top 10 U.S. bank2, with over US$435 billion in assets and physical presence in 32 states. Combined with our global operations, our $1 trillion+ balance sheet positions us strongly for future growth.

Our three operating groups are integrated across robust North-South infrastructure, with commercial banking and capital markets operations approximately the same size on both sides of the border and our commercial bank now ranked among the top 5 in North America. Our personal banking business is growing strongly with peer-leading revenue growth in Canada as we gain market share in the communities we serve, and our wealth management group is primed for acceleration with continued net new asset growth, reflecting the trusted relationship we have built with our clients.

Well-positioned for continued growth

Our performance continues to reflect the fundamental strength and diversified portfolio of businesses that make up BMO – our powerful platform for growth and resilience in a challenging economic environment. To adjust to near-term industry headwinds and return to our well-established record of positive operating leverage in fiscal 2024 – a key objective for our bank – we’re dynamically managing our businesses and taking action to align our resources to our dual objectives of growing our revenues and controlling expenses.

Our superior risk management capabilities and ethical culture have guided the relentless execution of our strategy to strengthen and grow our bank. We expect that disciplined expense management and targeted investments, combined with revenue and expense synergies from our recent acquisition, will continue to improve our efficiency ratio over time.

North America’s potential

North America’s fundamental advantages position the region for considerable growth in the years ahead, and BMO is well-positioned to serve more clients between the Canadian and American economies.

The clean energy transition will benefit both Canada and the U.S. as reliable and trusted suppliers of sought-after resources and sustainability expertise. BMO’s Climate Ambition, to be our clients’ lead partner in the transition to a net zero world, is backed by a $300 billion pledge to mobilize capital to clients’ sustainable outcomes by 2025 – and we’re on track to exceed that goal this year. With support for sustainable bond underwriting, equity and debt financing, ESG advisory services, and loans for sustainable projects, our Energy Transition and Sustainable Finance Groups are helping clients pursue opportunities in the global economy’s shift in the production and consumption of energy.

U.S. productivity is growing twice as fast as the G7 average and is among the world’s strongest. The U.S. also has the largest middle-class consumer market globally. Next door, Canada’s rapidly growing population – the fastest among G7 nations – and its position as the only G7 economy with comprehensive free trade access to the entire G7 and European Union, offers significant global economic advantage.

Canada and the U.S. share one of the largest bilateral trade relationships in the world, and BMO is serving our clients at the heart of each economy, helping to build a thriving economy, sustainable future and inclusive society across the region as a purpose-driven organization.

BMO’s clear North American positioning is now well established to serve the impressive potential of the North American region in a shifting global landscape.

Our Purpose commitments

Our performance enables us to put our Purpose into action and Boldly Grow the Good in business and life. When we enter a new market, we commit to making progress for our clients and communities there. That’s why we are delivering on our plan to support the communities we serve across our U.S. footprint. Our BMO EMpower 2.0 plan will deliver more than $40 billion in lending to minority-owned small businesses, community reinvestment in real estate, affordable housing and neighbourhood revitalization, and philanthropic giving to support under-represented communities and organizations.

With input from more than 85 community groups, this five-year plan reinforces BMO’s focus on increasing home ownership and supporting the growth of small business in low- to moderateincome neighbourhoods and underserved communities.

We’re also committed to empowering our employees. Our exceptionally engaged team has made significant strides in activating a winning culture in just a few short years, making substantial progress across every business and group to rank among the world’s strongest financial institutions. Every member of Team BMO is committed to building world-class loyalty and deepening client relationships by bringing the whole bank to our clients.

Looking ahead

With the size, strength and stability of our bank, BMO is well positioned for growth and consistent performance through economic cycles. With the longest-running dividend payout record of any company in Canada at 195 years, we have a leading track record of delivering value for our shareholders.

Following a year of successful acquisitions, we’re moving into the future with the full strength of our North American footprint and global presence – making our growth ambitions a reality, realizing opportunities in new markets, and driving progress for our clients, our communities and the planet.

Darryl White (signature)
Darryl White

1 For more information, refer to www.jdpower.com/business.

2 Ranking by assets as at September 30, 2023 and internal analysis. Source: SNL Financial. Top 10 U.S. JP Morgan, Bank of America, Citibank, Wells Fargo, U.S. Bank, PNC Bank, Truist Bank, TD Bank, Capital One, BMO.

Download the 2023 Annual Report: Message to Shareholders (PDF)