BMO chairman talks strategy New York conference

Comper appeared today at the Schroder Salomon Smith Barney International Banking Conference in New York with BMO’s new chief financial officer, Karen Maidment. Comper gave a presentation that went through BMO’s strategy, which aims to put the bank into the top quartile of its North American peer group.

The bank’s goal is to increase return on equity by between 1% to 1.5% a year to the 19% to 20% range by 2002. BMO also plans to increase its earnings per share by a minimum of 10% a year.

Comper emphasized that the bank is focusing on high-growth, high-return businesses, allocating priority resources to business customers, personal customers and e-business. “Our focus is on businesses where we have proven capability, where the market is growing, emerging or under-served, and where price-to-earnings multiples are attractive. This is enabling us to fund most strategic investments through divestiture of low-potential and high-capital-consuming businesses.”

Some have interpreted this strategy to mean that BMO is looking to sell Nesbitt Burns, as investment banking is becoming increasingly capital hungry while delivering low returns for Canadian banks. Morgan Stanley is tipped as a possible Nesbitt suitor. However, today Comper said, “Another key component of our growth strategy is to build on our strong leadership position in investment banking.”

He emphasized that the bank is looking at areas where it is already a leader or sees the potential to become a leader. BMO is getting out of corporate lending, while aggressively building fee-based businesses, including North American cash management and credit portfolio management and asset securitization in Canada. The bank is also targeting clients throughout North America in agribusiness, energy and communications.

Comper says BMO is also investing in the Private Client Group. “We believe our holistic approach to helping clients organize their financial affairs to meet their personal goals will set us apart from the competition.”

He noted that the investment sales force in the domestic branch system has added 416 specialists so far this year and that it has spent $250 million on U.S. acquisitions to build its retail business there, “with more to come”.

“We had already made clear our intention to market integrated money management services in two affluent, old-economy strongholds of wealth, the Midwest and the Sunbelt. We now have the perfect platform for our larger ambition to target new-economy wealth in selected high-growth markets.”