Personal & Investor Day Strategic Overview FRANK TECHAR President & CEO April 5 28 Forward Looking Statements 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 995 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 28 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 and market conditions in the countries in which we operate; interest rate and 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 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 27 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 behalf. The forward-looking information contained in this document is presented for the purpose of assisting our shareholders in understanding our financial position as at and for the periods ended on the dates presented and our strategic priorities and objectives, and may not be appropriate for other purposes. Assumptions about the performance of the Canadian and U.S. economies in 28 and how it will affect our businesses were material factors we considered when setting our strategic priorities and objectives, and when determining our financial targets, including provisions for credit losses. Key assumptions were that the Canadian economy will expand at a moderate pace in 28 while the U.S. economy expands modestly, and that inflation will remain low in North America. We also assumed that interest rates in 28 will decline slightly in and the United States, and that the Canadian dollar will trade at parity to the U.S. dollar at the end of 28. 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. We now anticipate weaker economic growth in and that the United States will slip into a mild recession in the first half of 28. We also expect lower interest rates and a somewhat weaker Canadian dollar than when we established our 28 financial targets. Tax laws in the countries in which we operate, primarily and the United States, are material factors we consider when determining our sustainable effective tax rate. Investor Day April 5 28
Personal & - Net Income After Tax ($MM) CAGR.4%,267 Largest contributor to total bank net income,6,76 Over 7 million customers 982 branches and,988 ABMs 824 872 23 24 25 26 27 Powerhouse commercial banking business Best everyday banking offer Largest MasterCard issuer in Lowest credit losses in the industry Industry leading loyalty program Largest Contributor to Bank NIAT (3 year average 25-7) PCG 5% CM 3% P&C 5% P&C US 5% Investor Day April 5 28 2 Organization Structure Personal & Commercial Banking US Private Client Group Personal & Commercial Banking BMO Capital Markets BC/Yukon Prairies Ontario Regional Greater Toronto Quebec Atlantic Provinces Corporate Finance Card & Retail Payment Services Insurance Auto Finance Direct Banking Personal Banking Product Management Investor Day April 5 28 3
Executing on a Clear Vision & Strategy VISION Every customer is a BMO advocate OUR STRATEGY We will win through the quality and consistency of our customer experience and through the most productive sales force and distribution network in the country. PATH TO DIFFERENTIATION. Excel at sales leadership and performance management 2. Leverage customer insights to drive offers and marketing results 3. Focus investments and allocate resources to capitalize on the highest value sales and distribution opportunities 4. Redesign core processes and leverage technology to improve customer experience, free up front line capacity, and reduce operating costs 5. Build best-in-class Human Resources capabilities and develop strong line leaders 6. Maintain superior credit risk management position Investor Day April 5 28 4 Building Balance & Share Growth Momentum in Personal Banking 2 5 5 Loans Q Q2 Q3 Q4 Q Q2 Q3 Q4 Q F6 F7 F8 Growth Market share.6.2.8.4. 6 4 2-2 -4 Q Deposits Q2 Q3 Q4 Q Q2 Q3 Q4 Q F6 F7 F8 Growth Market Share 3. 2.5 2..5. 2 5 5 Credit Cards 6 4 2 Q Q2 Q3 Q4 Q Q2 Q3 Q4 Q F6 F7 F8 Growth Market Share - Net Retail Sales 5 7 3 - Residential Mortgages 4 3 2 Q Q2 Q3 Q4 Q Q2 Q3 Q4 Q F6 F7 F8 Growth Market Share Investor Day April 5 28 5
More and Deeper Personal Relationships Net Promoter Score # of Active Chequing Customers (s) 33 MR: 32 34 3 MR: 3 3 33 2 MR: 28 27 32 24 MR: month rolling 2 3 F7 F8 F7 F8 2MR 3MR MR 93. 92.8 92.6 92.4 % of Households Retained 2.5 2.4 2.3 Product Categories per Household 8 6 4 2 Cards: Growth in Active Accounts (% Y/Y) F7 F8 F7 F8 F7 F8 Investor Day April 5 28 6 More and Deeper Commercial Relationships 24 2 8 5 2 Net Promoter Score 3 MR: 23 2 MR: 2 MR: month rolling 2 8 6 4 Loans Q Q2 Q3 Q4 Q Q2 Q3 Q4 Q 9.6 9.2 8.8 8.4 8. F7 2MR F8 3MR F6 F7 F8 Balance Growth Business Loans ($-5MM) - Market Share Business Loans ($-MM) - Market Share Product Categories per Customer.54.52.5.48.46 F7 F8 Investor Day April 5 28 7
Differentiating P&C Performance Management Customer Offers Distribution Risk Management Investor Day April 5 28 8 Personal & Investor Day Performance Management ALEXANDRA DOUSMANIS-CURTIS Senior Vice President Greater Toronto Area April 5 28
Report Month: Search Transit Report Menu : District: Area: Branch: Scorecard: Top Level Metrics Sept-7 Level Level 2 Level 3 Go to: Top level Personal revenue Team View : (U72)GREATER TORONTO DIVISION District: (U725) GTA CENTRAL DISTRICT Commercial revenue ROD, CWO, MCard Loyalty Mortgages & loans Area: (U724) TORONTO CENTRAL AREA Branch: (389) BLOOR&BAY TORONTO ONT Collaboration Investment Best Practices Customer & SOW Personal customers: Personal balances $: Line of Credit Commercial customers: Commercial balances $: Core revenue growth Total core revenue Monthly YOY core revenue growth % Percent of YTD revenue plan % This month $: 834,848 9.2 B/(W) than target:.2 97. B/(W) than target: (3.) Year to date $: 5,24,3 Peer Group Ranking: Ranking within District: 5 4% - Revenue 4% - Loyalty Collaboration Personal revenue Commercial revenue NPS 5% - PCG referrals PCG referral revenue This month $: 5,99 This month $: 333,939 Year to date $: 3,22,462 B/(W) than target: 2,8,64 This month $M: 52 Year to date $M: 323 YTD personal plan % YTD commercial plan % Personal Net Promoter Score (rolling 2-month) YTD PCG referral revenue plan % 93.. 25 8. B/(W) than target: (7.) B/W than target. B/(W) than target: () B/W than target 8. YTD personal revenue YTD commercial revenue Personal Net Promoter Score (rolling 2-month) 5% - Direct Banking referrals 4 5% 4 5% 4 DB opportunities booked 3.5 35 3 This month: 32 % 3 3 % Year to date: 55 2 2.5.5.5 N D J F M A M J J A S O Branch Target Monthly YOY growth 5% % 2 N D J F M A M J J A S O Branch Target Monthly YOY growth 5% % 25 2 5 5 N D J F M A M J J A S O Branch Target Monthly Direct Banking booking rate % 78. B/(W) than target: (2.) Team view Team/individual Best practice : (U72)GREATER TORONTO DIVISION Branch Scorecard - Latest Results District: (U725) GTA CENTRAL DISTRICT Paid FTEs: Peer group: 3 Area: (U724) TORONTO CENTRAL AREA Personal customers: Personal balances: Branch: (389) BLOOR&BAY TORONTO ONT Commercial customers: Commercial balances: Branch Revenue: Personal NPS: % YTD Revenue Plan Rolling 2 Month Average This Month 834,848 Target 35 93. 25 Year to date 5,24,3 NPS 3 Month 27 B/W than target () Better/Worse than Individual or Branch Target <-5% ±5% >5% Weekly view YTD view Revenue - 4% Loyalty Collaboration Monthly view Unit Sales Balance Sales ($M) 4% 2% Commercial Mortgage Insurance Mortgages and Investment sales Personal NPS PCG referral Received Chequing Accounts PRS Deposit MasterCard renewals and Sent referrals (unit penetration) loans and renewals balances referrals closed # # Accounts # refinance Rolling 2 mth. closed this week % $M $M $M this week # $M Avg. Role Susan Doe CSR 2 2 8 Bill Smith CSR 2 4 9 John Brown CSR 2 4 6 5 Emma White CSR 3 Bill Brown FSM- 4 4 8 2 6 25 2 John Smith FSM-2 2 6 6 3 62 5 8 Susan White FSM-2 4 5 4 4 54 2 22 6 5 3 4 James Doe FSM-3 3 2 3 69 89 78 9 5 6 John Doe FSM-4 3 4 4 3 56 2 28 2 25 5 5 Phillip Smith FSM-4 5 5 5 6 4 43 8 3 7 6 Mark White FSM-4 8 8 3 4 69 23 29 6 6 8 Total of Above 35 42 3 3 6,224,558 86 25 55 8 47 Branch target 37 52 4 22 7,2,8 84 35 5 7 4 B/(W) then Branch target (2) () (9) 8 (9) 4 (242) 2 () 5 7 Managing for Superior Performance Key objectives Tracking Planning Tracking Everyone understands, owns and expects to achieve their targets Aligned and easy to use Branch and Individual Scorecards Branch View Area View District View View National View Branch Scorecard Coaching Assessing Focus is on uncovering performance opportunities Rewarding performance relative to targets and peer benchmarks Team View Individual Scorecard (FSM) Individual Scorecard (CSR) Individual Scorecard Investor Day April 5 28 Performance Management Delivering Results Greater Toronto Sales per FTE New Personal Loan and Mortgage Sales Creditor Insurance Sales MasterCard Sales New Chequing Customers Commercial Borrowing Customers Average Products per HH* Feb F8 YTD vs. Prior YTD 27% 3% 37% 52% 23% 5% 8.4% * Feb F8 vs. Feb F7 Investor Day April 5 28
Personal & Investor Day Customer Offers SANDRA HANINGTON Executive Vice President Customer Strategies & Marketing April 5 28 Best Everyday Banking Offer AIR MILES on Debit Exclusive partnership with AIR MILES 2/3 of all Canadian households are active AIR MILES collectors Delivering profitable revenue growth Results New Customers 25% Doubled Cross-sell Targets Improved Retention. June 27-Feb 28 Investor Day April 5 28 3
Meeting a Need Not Selling a Product Homeowner Readiline Marketing focussed on customer needs, not product features Homeowner Readiline gives customers Flexibility Security Control Investor Day April 5 28 4 Unparalleled Rewards for BMO Mosaik Customers New Shell Mosaik MasterCard A loyalty program unmatched in the industry Provides visibility at 6 Shell stations Newly Revamped Mosaik Gold AIR MILES MasterCard With BMO you fly faster Globe and Mail: With new credit card, BMO shows it s not just playing defence Investor Day April 5 28 5
Personal & Investor Day Distribution MAURICE HUDON Senior Executive Vice President April 5 28 Building a Leading Multi-Channel Distribution Capability Keeping pace in branch distribution Increased level of investment in 27 Maintain investment in 28 and 29 Investment in specialized sales forces to drive incremental sales Mortgage Specialists and Financial Planners Continually improving direct banking capabilities Investor Day April 5 28 7
Mortgages: Leading to Deeper Customer Relationships and Improved Profitability 5 Mortgage Balance 25 Mortgage Spread (bps) - New Originations 5-5 -5 75 5-25 25 JAN JAN F7 F8 F7 F8 Broker Channels Proprietary Channels All Channels 2.5 2..5 Products Per New Customer to the Bank Mortgage Life New Granted Penetration (%) 6 58 56 54 52 5 FEB MAY AUG NOV FEB AUG SEPT OCT NOV DEC JAN FEB F7 F8 F7 F8 Branch Mortgage Specialists Investor Day April 5 28 8 Personal & Investor Day Risk Management WENDY MILLAR Executive Vice President and Senior Risk Officer April 5 28
Leaders in Credit Risk Management Portfolio Quality Differentiators We expect to maintain top tier risk performance despite uncertainty in Canadian economic conditions Canadian portfolio remains well diversified by both geography and industry Overall portfolio remains within acceptable risk parameters and better than peer averages Best in class credit training Decentralized credit decision making Independence of credit function Advanced modelling capabilities utilized to optimize risk/return Early identification/action on deteriorating accounts Provides customers with access to financing solutions consistently throughout the cycle... Investor Day April 5 28 2 and Best in Class Performance 24 25 Loan Losses 26 27 Q 28 Delinquency Rates (9+Days) Q 28 Instalment Loans P&C.33%.25%.29%.3%.3%.34% Rank Lines of Credit P&C.6%.2%.2%.3%.5%.3% Rank Mortgages P&C.%.%.%.2%.%.29% Rank Cards P&C 2.%.94%.87% 2.9% 2.9%.76% Rank Investor Day April 5 28 2
Building Momentum in Our Business 33 3 27 24 2 24 2 8 5 2 Customer Loyalty Net Promoter Score - Personal F7 F8 2MR 3MR MR Net Promoter Score - Commercial MR: month rolling F7 MR: month rolling 2MR F8 3MR MR: 32 3 MR: 3 2 MR: 28 3 MR: 23 2 MR: 2 2 5 5 2 8 6 4 Growth Loans Q Q2 Q3 Q4 Q Q2 Q3 Q4 Q F6 F7 F8 Growth Market share Loans Q Q2 Q3 Q4 Q Q2 Q3 Q4 Q F6 F7 F8 Balance Growth Business Loans ($-5MM) - Market Share Business Loans ($-MM) - Market Share Investor Day April 5 28.6.2.8.4. 9.6 9.2 8.8 8.4 8. 22 Personal & Investor Day Q&A
Investor Relations Contact Information www.bmo.com/investorrelations E-mail: investor.relations@bmo.com Fax: 46.867.3367 VIKI LAZARIS Senior Vice President 46.867.6656 viki.lazaris@bmo.com STEVEN BONIN Director 46.867.5452 steven.bonin@bmo.com KRISTA WHITE Senior Manager 46.867.79 krista.white@bmo.com