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03.12.2019 – 13:14

BMO Financial Group

BMO Financial Group Reports Fourth Quarter and Fiscal 2019 Results

Toronto (ots/PRNewswire)

Financial Results Highlights

Fourth Quarter 2019 Compared With Fourth Quarter 2018:

- Net income4,5 of $1,194 million, down 30%, reflecting a 
  restructuring charge in the current quarter and a benefit from the 
  remeasurement of an employee benefit liability in the prior year; 
  adjusted net income1 of $1,607 million, up 5% 
- EPS2 of $1.78, down 31%; adjusted EPS1 of $2.43, up 5% 
- Revenue, net of CCPB3,4, of $5,752 million, up 5%; revenue, net of 
  adjusted CCPB1, of $5,777 million, up 5% 
- Provision for credit losses (PCL) of $253 million compared with 
  $175 million in the prior year; includes PCL on performing loans of
  $22 million 
- ROE of 9.9%, compared with 16.1%; adjusted ROE1 of 13.5%, compared 
  with 14.5% 
- Common Equity Tier 1 Ratio of 11.4%  
- Dividend increased $0.03 to $1.06, up 6% from the prior year  

Fiscal 2019 Compared With Fiscal 2018:

- Net income4,5 of $5,758 million, up 6%; adjusted net income1 of 
  $6,249 million, up 4%  
- EPS2 of $8.66, up 6%; adjusted EPS1 of $9.43, up 5% 
- Revenue, net of CCPB3,4, of $22,774 million, up 6% 
- PCL of $872 million compared with $662 million in the prior year; 
  includes PCL on performing loans of $121 million 
- ROE of 12.6% compared with 13.3%; adjusted ROE1 of 13.7% compared 
  with 14.6% 

- For the fourth quarter ended October 31, 2019, BMO Financial Group (TSX:BMO) (NYSE:BMO) recorded net income of $1,194 million or $1.78 per share on a reported basis, and net income of $1,607 million or $2.43 per share on an adjusted basis.

"BMO finished the year with very strong performance, delivering $1.6 billion in adjusted earnings and adjusted earnings per share of $2.43 in the fourth quarter, up 5% year-over-year, with pre-provision pre-tax earnings growth of 11%, driven by positive operating leverage in all businesses and particularly strong operating performance in Personal and Commercial banking in both Canada and the U.S.," said Darryl White, Chief Executive Officer, BMO Financial Group.

"Our results for the year reflect the strength and quality of our diversified businesses. Adjusted earnings per share were $9.43, up 5% from last year. We continued to make significant progress on our strategic priorities and delivered annual earnings growth of 23% in our U.S. business. With a clear bank-wide focus on disciplined expense management, we continued to improve our overall efficiency ratio with 130 basis points of improvement in the past two years and good momentum throughout the year. We have a number of initiatives underway, including today's announcement of a restructuring charge, that will serve to accelerate our momentum and help us meet our efficiency objectives over the long-term. In addition, we gained market share in key areas, including commercial lending and retail deposits, in Canada and the U.S. Our credit performance remains good and we ended the year with a strong CET1 capital ratio of 11.4%."

"Looking ahead to 2020, we will continue to execute on our clearly articulated strategic priorities and objectives. We remain focused on building on the foundation of our integrated North American platform to grow our customer base and broaden our customer relationships. I am confident that we are well-positioned to deliver sustainable and resilient profitability through an evolving economic environment," concluded Mr. White.

Reported net income in the current quarter included a restructuring charge of $357 million after-tax ($484 million pre-tax), related to severance and a small amount of real estate-related costs, to continue to improve our efficiency, including accelerating delivery against key bank-wide initiatives focused on digitization, organizational redesign and simplification of the way we do business. Reported net income also included a $25 million pre-tax and after-tax reinsurance adjustment for the net impact of major reinsurance claims from Japanese typhoons that were incurred after our announced decision to wind down our reinsurance business.

Return on equity (ROE) was 9.9%, compared with 16.1% in the prior year and adjusted ROE was 13.5%, compared with 14.5% in the prior year. Return on tangible common equity (ROTCE) was 11.9%, compared with 19.5% in the prior year and adjusted ROTCE was 15.7%, compared with 17.3% in the prior year.

Concurrent with the release of results, BMO announced a first quarter 2020 dividend of $1.06 per common share, up $0.03 per share or 3% from the prior quarter and up $0.06 per share or 6%from the prior year. The quarterly dividend of $1.06 per common share is equivalent to an annual dividend of $4.24 per common share.

BMO's 2019 audited annual consolidated financial statements and accompanying Management Discussion and Analysis (MD&A) are available online at www.bmo.com/investorrelations and at www.sedar.com.

(1)        Results and   
           measures in   
           this document 
           are presented 
           on a GAAP     
           basis. They   
           are also      
           presented on  
           an adjusted   
           basis that    
           excludes the  
           impact of     
           certain items.
           Adjusted      
           results and   
           measures are  
           non-GAAP and  
           are detailed  
           for all       
           reported      
           periods in the
           Non-GAAP      
           Measures      
           section, where
           such non-GAAP 
           measures and  
           their closest 
           GAAP          
           counterparts  
           are disclosed.
(2)        All Earnings  
           per Share     
           (EPS) measures
           in this       
           document refer
           to diluted    
           EPS, unless   
           specified     
           otherwise. EPS
           is calculated 
           using net     
           income after  
           deducting     
           total         
           dividends on  
           preferred     
           shares and    
           distributions 
           on other      
           equity        
           instruments.  
(3)        On a basis    
           that nets     
           insurance     
           claims,       
           commissions   
           and changes in
           policy benefit
           liabilities   
           (CCPB) against
           insurance     
           revenue.      
(4)        Q4-2019       
           reported net  
           income        
           included a    
           $357 million  
           after-tax     
           ($484 million 
           pre-tax)      
           restructuring 
           charge,       
           related to    
           severance and 
           a small amount
           of real       
           estate-related
           costs, to     
           continue to   
           improve our   
           efficiency,   
           including     
           accelerating  
           delivery      
           against key   
           bank-wide     
           initiatives   
           focused on    
           digitization, 
           organizational
           redesign and  
           simplification
           of the way we 
           do business.  
           The current   
           quarter       
           reported net  
           income also   
           included a $25
           million       
           (pre-tax and  
           after-tax) net
           impact of     
           major         
           reinsurance   
           claims from   
           Japanese      
           typhoons that 
           were incurred 
           after our     
           announced     
           decision to   
           wind down our 
           reinsurance   
           business. The 
           restructuring 
           charge was    
           included in   
           non-interest  
           expense in    
           Corporate     
           Services and  
           the           
           reinsurance   
           adjustment was
           included in   
           CCPB in BMO   
           Wealth        
           Management.   
(5)        In fiscal     
           2018, we      
           recorded a    
           $425 million  
           (US$339       
           million)      
           charge related
           to the        
           revaluation of
           our U.S. net  
           deferred tax  
           asset as a    
           result of the 
           enactment of  
           the U.S. Tax  
           Cuts and Jobs 
           Act in the    
           first quarter;
           a $192 million
           after-tax     
           ($260 million 
           pre-tax)      
           restructuring 
           charge,       
           primarily     
           related to    
           severance, in 
           the second    
           quarter; and a
           benefit of    
           $203 million  
           after-tax     
           ($277 million 
           pre-tax) from 
           the           
           remeasurement 
           of an employee
           benefit       
           liability, as 
           a result of an
           amendment to  
           our other     
           employee      
           future        
           benefits plan 
           for certain   
           employees, in 
           the fourth    
           quarter. The  
           second quarter
           charge and    
           fourth quarter
           benefit were  
           included in   
           non-interest  
           expense in    
           Corporate     
           Services. For 
           more          
           information on
           the tax       
           charge, refer 
           to the        
           Critical      
           Accounting    
           Estimates -   
           Income Taxes  
           and Deferred  
           Tax Assets    
           section on    
           page 119 of   
           BMO's 2018    
           Annual Report.
Note: All 
ratios and
percentage
changes in
this      
document  
are based 
on        
unrounded 
numbers.   

Fourth Quarter Operating Segment Overview

Canadian P&C

Reported net income was $716 million, an increase of $42 million or 6% and adjusted net income was $716 million, an increase of $41 million or 6% from the prior year. Adjusted net income excludes the amortization of acquisition-related intangible assets. Results reflect strong revenue growth, partially offset by higher provisions for credit losses and higher expenses.

During the quarter, we launched a new digital lending solution, the first of its kind from a major Canadian financial institution. Customers are now able to apply for a personal line of credit by completing a short, user-friendly digital application and receive a decision on their loan application in minutes. We also became the first Canadian financial institution to offer retail credit card customers the option to report a lost or stolen card through online banking. These new digital services and innovations reflect BMO's commitment to creating digital solutions that better support our customers.

U.S. P&C

Reported net income was $393 million, an increase of $21 million or 6% and adjusted net income was $404 million, an increase of $21 million or 5% from the prior year. Adjusted net income excludes the amortization of acquisition-related intangible assets.

Reported net income was US$297 million, an increase of US$12 million or 4% and adjusted net income was US$305 million, an increase of US$11 million or 4%, primarily due to higher revenue and lower provisions for credit losses, partially offset by a favourable U.S. tax item in the prior year and higher expenses.

During the quarter, the Federal Deposit Insurance Corporation released its annual deposit market share report. We improved our market share ranking within our core footprint, which includes Illinois, Kansas, Wisconsin, Missouri, Indiana and Minnesota, from fourth to third place and maintained our strong ranking of second place in the Chicago and Milwaukee markets.

BMO Wealth Management

Reported net income was $267 million, an increase of $48 million or 22% and adjusted net income was $301 million, an increase of $72 million or 31% from the prior year. Adjusted net income in the current quarter excludes the net impact of major reinsurance claims and the amortization of acquisition-related intangible assets in both the current and prior year. Traditional Wealth reported net income was $237 million, an increase of $45 million or 24% and adjusted net income was $246 million, an increase of $44 million or 22%, due to the impact of a legal provision in the prior year, higher deposit and loan revenue and higher fee-based revenue. Insurance reported net income was $30 million, an increase of $3 million or 9%, and adjusted net income of $55 million increased $28 million, primarily due to benefits from changes in investments to improve asset liability management.

For the second consecutive year, BMO Global Asset Management was named the best manager in liability-driven investment by Financial News.

BMO Capital Markets

Reported net income was $269 million, compared with $298 million and adjusted net income was $280 million, compared with $309 million in the prior year. Adjusted net income excludes the amortization of acquisition-related intangible assets and acquisition integration costs. Higher revenue was more than offset by higher provisions for credit losses and higher expenses.

On September 25, 2019, BMO Capital Markets celebrated the 15th anniversary of the Equity Through Education Trading Day, a BMO Capital Markets initiative that donates all institutional equity trading commissions earned that day across North America and Europe to charities helping underprivileged students through scholarships, bursaries and other academic programs. This year, we raised $1.6 million, bringing the total amount raised since the introduction of the program in 2005 to more than $21 million, and helping over 5,000 students. This is one of the many initiatives that continue to highlight BMO's Purpose to Boldly Grow the Good in business and life.

Corporate Services

Reported net loss was $451 million, compared with a reported net income of $134 million in the prior year. Adjusted net loss was $94 million, compared with an adjusted net loss of $65 million in the prior year. Adjusted results in the current quarter exclude a restructuring charge of $357 million after-tax. Adjusted results in the prior year exclude a $203 million after-tax benefit from the remeasurement of an employee benefit liability and acquisition integration costs. Adjusted results decreased, primarily due to lower revenue excluding taxable equivalent basis (teb) adjustments, partially offset by lower expenses.

Adjusted results in this Fourth Quarter Operating Segment Overview section are non-GAAP amounts or non-GAAP measures. Please refer to the Non-GAAP Measures section.

Capital

BMO's Common Equity Tier 1 (CET1) Ratio was 11.4% as at October 31, 2019. The CET1 Ratio was unchanged from the prior quarter as retained earnings growth, which absorbed the restructuring charge, was offset by higher risk-weighted assets from business growth.

Provision for Credit Losses

Total provision for credit losses was $253 million, an increase of $78 million from the prior year. The provision for credit losses ratio was 23 basis points, compared with 18 basis points in the prior year. The provision for credit losses on impaired loans of $231 million increased $54 million from $177 million in the prior year, primarily due to higher provisions in BMO Capital Markets and our P&C businesses. The provision for credit losses on impaired loans ratio was 21 basis points, compared with 18 basis points in the prior year. There was a $22 million provision for credit losses on performing loans in the current quarter, compared with a $2 million recovery of credit losses on performing loans in the prior year. The year-over-year increase in the provision for credit losses on performing loans was as a result of negative migration in the current quarter, compared with positive migration in the prior year, and higher provisions in the current quarter from changes in scenario weights, partially offset by lower provisions in the current quarter from changes in the economic outlook.

Caution

The foregoing sections contain forward-looking statements. Please refer to the Caution Regarding Forward-Looking Statements.

Regulatory Filings

Our continuous disclosure materials, including our interim filings, annual Management's Discussion and Analysis and audited consolidated financial statements, Annual Information Form and Notice of Annual Meeting of Shareholders and Proxy Circular, are available on our website at www.bmo.com/investorrelations, on the Canadian Securities Administrators' website at www.sedar.com, and on the EDGAR section of the U.S. Securities and Exchange Commission's website at www.sec.gov.

Bank of       
Montreal uses 
a unified     
branding      
approach that 
links all of  
the           
organization's
member        
companies.    
Bank of       
Montreal,     
together with 
its           
subsidiaries, 
is known as   
BMO Financial 
Group. As     
such, in this 
document, the 
names BMO and 
BMO Financial 
Group mean    
Bank of       
Montreal,     
together with 
its           
subsidiaries.  

Financial Review

Management's Discussion and Analysis (MD&A) commentary is as at December 3, 2019. The material that precedes this section comprises part of this MD&A. The MD&A should be read in conjunction with the unaudited interim consolidated financial statements for the period ended October 31, 2019, included in this document, as well as the audited consolidated financial statements for the year ended October 31, 2019, and the MD&A for fiscal 2019, contained in our 2019 Annual Report.

BMO's 2019 Annual Report includes a comprehensive discussion of our businesses, strategies and objectives, and can be accessed on our website at www.bmo.com/investorrelations. Readers are also encouraged to visit the site to view other quarterly financial information.

Bank of Montreal's management, under the supervision of the CEO and CFO, has evaluated the effectiveness, as at October 31, 2019, of Bank of Montreal's disclosure controls and procedures (as defined in the rules of the U.S. Securities and Exchange Commission and the Canadian Securities Administrators) and has concluded that such disclosure controls and procedures are effective.

There were no changes in our internal control over financial reporting during the quarter ended October 31, 2019, which materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Because of inherent limitations, disclosure controls and procedures and internal control over financial reporting can provide only reasonable assurance and may not prevent or detect misstatements.

As in prior quarters, Bank of Montreal's Audit and Conduct Review Committee reviewed this document and Bank of Montreal's Board of Directors approved the document prior to its release.

Financial Highlights

(Canadian $ in      Q4-2019 Q3-2019 Q4-2018 Fiscal  Fiscal 
millions, except as                         2019    2018   
noted)                                                     
Summary Income                                             
Statement                                                  
Net interest income 3,364   3,217   3,015   12,888  11,438 
(1)                                                        
Non-interest        2,723   3,449   2,878   12,595  11,467 
revenue (1)(2)                                             
Revenue (2)         6,087   6,666   5,893   25,483  22,905 
Insurance claims,   335     887     390     2,709   1,352  
commissions and                                            
changes in policy                                          
benefit liabilities                                        
(CCPB)                                                     
Revenue, net of     5,752   5,779   5,503   22,774  21,553 
CCPB                                                       
Provision for       231     243     177     751     700    
(recovery of)                                              
credit losses on                                           
impaired loans                                             
Provision for       22      63      (2)     121     (38)   
(recovery of)                                              
credit losses on                                           
performing loans                                           
Total provision for 253     306     175     872     662    
credit losses                                              
Non-interest        3,987   3,491   3,193   14,630  13,477 
expense (2)                                                
Provision for       318     425     438     1,514   1,961  
income taxes (3)                                           
Net income          1,194   1,557   1,697   5,758   5,453  
attributable to                                            
equity holders of                                          
the bank                                                   
Adjusted net income 1,607   1,582   1,531   6,249   5,982  
Common Share Data                                          
($, except as                                              
noted)                                                     
Earnings per share  1.78    2.34    2.58    8.66    8.17   
Adjusted earnings   2.43    2.38    2.32    9.43    8.99   
per share                                                  
Earnings per share  (30.7)  1.0     42.4    6.0     3.3    
growth (%)                                                 
Adjusted earnings   4.8     0.8     19.7    4.9     10.3   
per share growth                                           
(%)                                                        
Dividends declared  1.03    1.03    0.96    4.06    3.78   
per share                                                  
Book value per      71.54   70.88   64.73   71.54   64.73  
share                                                      
Closing share price 97.50   98.80   98.43   97.50   98.43  
Number of common                                           
shares outstanding                                         
(in millions)                                              
End of period       639.2   639.0   639.3   639.2   639.3  
Average diluted     640.4   640.4   641.8   640.4   644.9  
Total market value  62.3    63.1    62.9    62.3    62.9   
of common shares ($                                        
billions)                                                  
Dividend yield (%)  4.2     4.2     3.9     4.2     3.8    
Dividend payout     57.6    43.9    37.2    46.8    46.1   
ratio (%)                                                  
Adjusted dividend   42.3    43.2    41.3    43.0    41.9   
payout ratio (%)                                           
Financial Measures                                         
and Ratios (%)                                             
Return on equity    9.9     13.2    16.1    12.6    13.3   
Adjusted return on  13.5    13.5    14.5    13.7    14.6   
equity                                                     
Return on tangible  11.9    15.8    19.5    15.1    16.2   
common equity                                              
Adjusted return on  15.7    15.8    17.3    16.1    17.5   
tangible common                                            
equity                                                     
Net income growth   (29.6)  1.3     38.6    5.6     2.1    
Adjusted net income 5.0     1.1     17.1    4.5     8.8    
growth                                                     
Revenue growth      3.3     15.1    5.0     11.3    3.6    
Revenue growth, net 4.5     4.6     9.1     5.7     4.8    
of CCPB                                                    
Non-interest        24.9    3.9     (4.4)   8.6     2.2    
expense growth                                             
Adjusted            1.2     4.1     6.2     5.0     3.5    
non-interest                                               
expense growth                                             
Efficiency ratio,   69.3    60.4    58.0    64.2    62.5   
net of CCPB                                                
Adjusted efficiency 60.0    59.9    62.2    61.4    61.9   
ratio, net of CCPB                                         
Operating leverage, (20.4)  0.7     13.5    (2.9)   2.6    
net of CCPB                                                
Adjusted operating  3.8     0.5     2.9     0.8     1.3    
leverage, net of                                           
CCPB                                                       
Net interest margin 1.71    1.67    1.68    1.70    1.67   
on average earning                                         
assets                                                     
Effective tax rate  21.0    21.5    20.6    20.8    26.5   
(3)                                                        
Adjusted effective  22.0    21.5    19.7    21.1    20.7   
tax rate                                                   
Total               0.23    0.28    0.18    0.20    0.17   
PCL-to-average net                                         
loans and                                                  
acceptances                                                
(annualized)                                               
PCL on impaired     0.21    0.22    0.18    0.17    0.18   
loans-to-average                                           
net loans and                                              
acceptances                                                
(annualized)                                               
Balance Sheet (as                                          
at, $ millions,                                            
except as noted)                                           
Assets              852,195 839,180 773,293 852,195 773,293
Gross loans and     451,537 444,390 404,215 451,537 404,215
acceptances                                                
Net loans and       449,687 442,588 402,576 449,687 402,576
acceptances                                                
Deposits            568,143 553,383 520,928 568,143 520,928
Common              45,728  45,295  41,381  45,728  41,381 
shareholders'                                              
equity                                                     
Cash and            28.9    28.3    29.9    28.9    29.9   
securities-to-total                                        
assets ratio (%)                                           
Capital Ratios (%)                                         
CET1 Ratio          11.4    11.4    11.3    11.4    11.3   
Tier 1 Capital      13.0    13.0    12.9    13.0    12.9   
Ratio                                                      
Total Capital Ratio 15.2    15.3    15.2    15.2    15.2   
Leverage Ratio      4.3     4.3     4.2     4.3     4.2    
Foreign Exchange                                           
Rates ($)                                                  
As at Canadian/U.S. 1.3165  1.3198  1.3169  1.3165  1.3169 
dollar                                                     
Average             1.3240  1.3270  1.3047  1.3290  1.2878 
Canadian/U.S.                                              
dollar                                                      
(1)           Effective      
              Q1-2019,       
              certain        
              dividend income
              in our Global  
              Markets        
              business has   
              been           
              reclassified   
              from           
              non-interest   
              revenue to net 
              interest       
              income. Results
              for prior      
              periods and    
              related ratios 
              have been      
              reclassified to
              conform with   
              the current    
              period's       
              presentation.  
(2)           Effective      
              Q1-2019, the   
              bank adopted   
              IFRS 15,       
              Revenue from   
              Contracts with 
              Customers (IFRS
              15) and elected
              to             
              retrospectively
              present prior  
              periods as if  
              IFRS 15 had    
              always been    
              applied. As a  
              result, loyalty
              rewards and    
              cash promotion 
              costs on cards 
              previously     
              recorded in    
              non-interest   
              expense are    
              presented as a 
              reduction in   
              non-interest   
              revenue. In    
              addition,      
              certain        
              out-of-pocket  
              expenses       
              reimbursed to  
              BMO from       
              customers have 
              been           
              reclassified   
              from a         
              reduction in   
              non-interest   
              expense to     
              non-interest   
              revenue.       
(3)           Q1-2018        
              reported net   
              income included
              a $425 million 
              charge due to  
              the revaluation
              of our U.S. net
              deferred tax   
              asset as a     
              result of the  
              enactment of   
              the U.S. Tax   
              Cuts and Jobs  
              Act. For more  
              information,   
              refer to the   
              Critical       
              Accounting     
              Estimates -    
              Income Taxes   
              and Deferred   
              Tax Assets     
              section on page
              119 of BMO's   
              2018 Annual    
              Report.        
Certain      
comparative  
figures have 
been         
reclassified 
to conform   
with the     
current      
period's     
presentation.
Adjusted     
results are  
non-GAAP     
amounts or   
non-GAAP     
measures.    
Please refer 
to the       
Non-GAAP     
Measures     
section.      

Non-GAAP Measures

Results and measures in this document are presented on a GAAP basis. Unless otherwise indicated, all amounts are in Canadian dollars and have been derived from financial statements prepared in accordance with International Financial Reporting Standards (IFRS). References to GAAP mean IFRS. They are also presented on an adjusted basis that excludes the impact of certain items, as set out in the table below. Results and measures that exclude the impact of Canadian/U.S. dollar exchange rate movements on our U.S. segment are non-GAAP measures. Please refer to the Foreign Exchange section for a discussion of the effects of changes in exchange rates on our results. Management assesses performance on a reported basis and on an adjusted basis, and considers both to be useful in assessing underlying ongoing business performance. Presenting results on both bases provides readers with a better understanding of how management assesses results. It also permits readers to assess the impact of certain specified items on results for the periods presented, and to better assess results excluding those items that may not be reflective of ongoing results. As such, the presentation may facilitate readers' analysis of trends. Except as otherwise noted, management's discussion of changes in reported results in this document applies equally to changes in the corresponding adjusted results. Adjusted results and measures are non-GAAP and as such do not have standardized meanings under GAAP. They are unlikely to be comparable to similar measures presented by other companies and should not be viewed in isolation from, or as a substitute for, GAAP results.

Non-GAAP Measures

(Canadian $ in      Q4-2019 Q3-2019 Q4-2018 Fiscal   Fiscal  
millions, except as                         2019     2018    
noted)                                                       
Reported Results                                             
Revenue             6,087   6,666   5,893   25,483   22,905  
Insurance claims,   (335)   (887)   (390)   (2,709)  (1,352) 
commissions and                                              
changes in policy                                            
benefit liabilities                                          
(CCPB)                                                       
Revenue, net of     5,752   5,779   5,503   22,774   21,553  
CCPB                                                         
Total provision for (253)   (306)   (175)   (872)    (662)   
credit losses                                                
Non-interest        (3,987) (3,491) (3,193) (14,630) (13,477)
expense                                                      
Income before       1,512   1,982   2,135   7,272    7,414   
income taxes                                                 
Provision for       (318)   (425)   (438)   (1,514)  (1,961) 
income taxes                                                 
Net income          1,194   1,557   1,697   5,758    5,453   
EPS ($)             1.78    2.34    2.58    8.66     8.17    
Adjusting Items                                              
(Pre-tax) (1)                                                
Acquisition         (2)     (3)     (18)    (13)     (34)    
integration costs                                            
(2)                                                          
Amortization of     (38)    (29)    (31)    (128)    (116)   
acquisition-related                                          
intangible assets                                            
(3)                                                          
Restructuring costs (484)   -       -       (484)    (260)   
(4)                                                          
Reinsurance         (25)    -       -       (25)     -       
adjustment (5)                                               
Benefit from the    -       -       277     -        277     
remeasurement of an                                          
employee benefit                                             
liability (6)                                                
Adjusting items     (549)   (32)    228     (650)    (133)   
included in                                                  
reported pre-tax                                             
income                                                       
Adjusting Items                                              
(After tax)(1)                                               
Acquisition         (2)     (2)     (13)    (10)     (25)    
integration costs                                            
(2)                                                          
Amortization of     (29)    (23)    (24)    (99)     (90)    
acquisition-related                                          
intangible assets                                            
(3)                                                          
Restructuring costs (357)   -       -       (357)    (192)   
(4)                                                          
Reinsurance         (25)    -       -       (25)     -       
adjustment (5)                                               
Benefit from the    -       -       203     -        203     
remeasurement of an                                          
employee benefit                                             
liability (6)                                                
U.S. net deferred   -       -       -       -        (425)   
tax asset                                                    
revaluation (7)                                              
Adjusting items     (413)   (25)    166     (491)    (529)   
included in                                                  
reported net income                                          
after tax                                                    
Impact on EPS ($)   (0.65)  (0.04)  0.26    (0.77)   (0.82)  
Adjusted Results                                             
Revenue             6,087   6,666   5,893   25,483   22,905  
Insurance claims,   (310)   (887)   (390)   (2,684)  (1,352) 
commissions and                                              
changes in policy                                            
benefit liabilities                                          
(CCPB)                                                       
Revenue, net of     5,777   5,779   5,503   22,799   21,553  
CCPB                                                         
Total provision for (253)   (306)   (175)   (872)    (662)   
credit losses                                                
Non-interest        (3,463) (3,459) (3,421) (14,005) (13,344)
expense                                                      
Income before       2,061   2,014   1,907   7,922    7,547   
income taxes                                                 
Provision for       (454)   (432)   (376)   (1,673)  (1,565) 
income taxes                                                 
Net income          1,607   1,582   1,531   6,249    5,982   
EPS ($)             2.43    2.38    2.32    9.43     8.99     
(1)           Adjusting items are
              generally included 
              in Corporate       
              Services, with the 
              exception of the   
              amortization of    
              acquisition-related
              intangible assets  
              and certain        
              acquisition        
              integration costs, 
              which are charged  
              to the operating   
              groups, and the    
              reinsurance        
              adjustment, which  
              is included in BMO 
              Wealth Management. 
(2)           Acquisition        
              integration costs  
              related to the     
              acquired BMO       
              Transportation     
              Finance business   
              are charged to     
              Corporate Services,
              since the          
              acquisition impacts
              both Canadian and  
              U.S. P&C           
              businesses.        
              KGS-Alpha          
              acquisition        
              integration costs  
              are reported in BMO
              Capital Markets.   
              Acquisition        
              integration costs  
              are recorded in    
              non-interest       
              expense.           
(3)           These amounts were 
              charged to the     
              non-interest       
              expense of the     
              operating groups.  
              Before-tax and     
              after-tax amounts  
              for each operating 
              group are provided 
              in the Review of   
              Operating Group's  
              Performance        
              section.           
(4)           Q4-2019 reported   
              net income included
              a restructuring    
              charge of $357     
              million after-tax  
              ($484 million      
              pre-tax), related  
              to severance and a 
              small amount of    
              real estate-related
              costs, to continue 
              to improve our     
              efficiency,        
              including          
              accelerating       
              delivery against   
              key bank-wide      
              initiatives focused
              on digitization,   
              organizational     
              redesign and       
              simplification of  
              the way we do      
              business. The      
              restructuring      
              charge in 2018 was 
              also a result of a 
              similar bank-wide  
              program.           
              Restructuring costs
              are included in    
              non-interest       
              expense in         
              Corporate Services.
(5)           Q4-2019 reported   
              net income included
              a reinsurance      
              adjustment of $25  
              million (pre-tax   
              and after-tax) in  
              claims, commissions
              and changes in     
              policy benefit     
              liabilities for the
              net impact of major
              reinsurance claims 
              from Japanese      
              typhoons that were 
              incurred after our 
              announced decision 
              to wind down our   
              reinsurance        
              business. This     
              reinsurance        
              adjustment is      
              included in BMO    
              Wealth Management. 
(6)           Q4-2018 reported   
              net income included
              a benefit of $203  
              million after-tax  
              ($277 million      
              pre-tax) from the  
              remeasurement of an
              employee benefit   
              liability, as a    
              result of an       
              amendment to our   
              other employee     
              future benefits    
              plan for certain   
              employees. This    
              amount was included
              in non-interest    
              expense in         
              Corporate Services.
(7)           Q1-2018 reported   
              net income included
              a $425 million     
              (US$339 million)   
              charge related to  
              the revaluation of 
              our U.S. net       
              deferred tax asset 
              as a result of the 
              enactment of the   
              U.S. Tax Cuts and  
              Jobs Act. For more 
              information, refer 
              to the Critical    
              Accounting         
              Estimates - Income 
              Taxes and Deferred 
              Tax Assets section 
              on page 119 of     
              BMO's 2018 Annual  
              Report.            
Certain      
comparative  
figures have 
been         
reclassified 
to conform   
with the     
current      
period's     
presentation.
Adjusted     
results and  
measures in  
this table   
are non-GAAP 
amounts or   
non-GAAP     
measures.     

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 in this document may include, but are not limited to, statements with respect to our objectives and priorities for fiscal 2020 and beyond, our strategies or future actions, our targets, expectations for our financial condition or share price, the regulatory environment in which we operate and the results of or outlook for our operations or for the Canadian, U.S. and international economies, and include statements of our management. Forward-looking statements are typically identified by words such as "will", "would", "should", "believe", "expect", "anticipate", "project", "intend", "estimate", "plan", "goal", "target", "may" and "could".

By their nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties, both general and specific in nature. 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 - many of which are beyond our control and the effects of which can be difficult to predict - 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; the Canadian housing market; weak, volatile or illiquid capital and/or credit markets; interest rate and currency value fluctuations; changes in monetary, fiscal, or economic policy and tax legislation and interpretation; the level of competition in the geographic and business areas in which we operate; changes in laws or in supervisory expectations or requirements, including capital, interest rate and liquidity requirements and guidance, and the effect of such changes on funding costs; judicial or regulatory proceedings; the accuracy and completeness of the information we obtain with respect to our customers and counterparties; failure of third parties to comply with their obligations to us; our ability to execute our strategic plans and to complete and integrate acquisitions, including obtaining regulatory approvals; critical accounting estimates and the effect of changes to accounting standards, rules and interpretations on these estimates; operational and infrastructure risks, including with respect to reliance on third parties; changes to our credit ratings; political conditions, including changes relating to or affecting economic or trade matters; global capital markets activities; the possible effects on our business of war or terrorist activities; outbreaks of disease or illness that affect local, national or international economies; natural disasters and disruptions to public infrastructure, such as transportation, communications, power or water supply; technological changes; information, privacy and cyber security, including the threat of data breaches, hacking, identity theft and corporate espionage, as well as the possibility of denial of service resulting from efforts targeted at causing system failure and service disruption; and our ability to anticipate and effectively manage risks arising from all of the foregoing factors.

We caution that the foregoing list is not exhaustive of all possible factors. Other factors and risks could adversely affect our results. For more information, please refer to the discussion in the Risks That May Affect Future Results section, and the sections related to credit and counterparty, market, insurance, liquidity and funding, operational, legal and regulatory, business, strategic, environmental and social, and reputation risk, in the Enterprise-Wide Risk Management section that begins on page 68 of BMO's 2019 Annual Report, all of which outline certain key factors and risks that may affect our future results. Investors and others should carefully consider these factors and risks, as well as other uncertainties and potential events, and the inherent uncertainty of forward-looking statements. We do not undertake to update any forward-looking statements, whether written or oral, that may be made from time to time by the organization or on its behalf, except as required by law. 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, as well as our strategic priorities and objectives, and may not be appropriate for other purposes.

Material economic assumptions underlying the forward-looking statements contained in this document are set out in the Economic Developments and Outlook section on page 18 of BMO's 2019 Annual Report. Assumptions about the performance of the Canadian and U.S. economies, as well as overall market conditions and their combined effect on our business, are material factors we consider when determining our strategic priorities, objectives and expectations for our business. In determining our expectations for economic growth, both broadly and in the financial services sector, we primarily consider historical economic data provided by governments, historical relationships between economic and financial variables, and the risks to the domestic and global economy.

Foreign Exchange

The Canadian dollar equivalents of BMO's U.S. results that are denominated in U.S. dollars decreased relative to the third quarter of 2019 and increased relative to the fourth quarter of 2018 due to changes in the U.S. dollar. The table below indicates the relevant average Canadian/U.S. dollar exchange rates and the impact of changes in those rates on our U.S. segment results. References in this document to the impact of the U.S. dollar do not include U.S. dollar-denominated amounts recorded outside BMO's U.S. segment.

Changes in exchange rates will affect future results measured in Canadian dollars, and the impact on those results is a function of the periods in which revenue, expenses and provisions for (recoveries of) credit losses arise.

Economically, our U.S. dollar income stream was unhedged to changes in foreign exchange rates during the current and prior year. We regularly determine whether to enter into hedging transactions in order to mitigate the impact of foreign exchange rate movements on net income.

Refer to the Enterprise-Wide Capital Management section on page 59 of the 2019 Annual Report for a discussion of the impact that changes in foreign exchange rates can have on our capital position. Changes in foreign exchange rates will also affect accumulated other comprehensive income, primarily as a result of the translation of our investment in foreign operations.

This Foreign Exchange section contains forward-looking statements. Please refer to the Caution Regarding Forward-Looking Statements.

Effects of Changes in Exchange Rates on BMO's U.S. Segment Reported and Adjusted Results

              Q4-2019
(Canadian $   vs.     vs.    
in millions,  Q4-2018 Q3-2019
except as                    
noted)                       
Canadian/U.S.                
dollar                       
exchange rate                
(average)                    
Current       1.3240  1.3240 
period                       
Prior period  1.3047  1.3270 
Effects on                   
U.S. segment                 
reported                     
results                      
Increased     17      (3)    
(decreased)                  
net interest                 
income                       
Increased     11      (2)    
(decreased)                  
non-interest                 
revenue                      
Increased     28      (5)    
(decreased)                  
revenues                     
Decreased     (1)     -      
(increased)                  
provision for                
credit losses                
Decreased     (20)    3      
(increased)                  
expenses                     
Decreased     (1)     1      
(increased)                  
income taxes                 
Increased     6       (1)    
(decreased)                  
reported net                 
income                       
Impact on     0.01    -      
earnings per                 
share ($)                    
Effects on                   
U.S. segment                 
adjusted                     
results                      
Increased     17      (3)    
(decreased)                  
net interest                 
income                       
Increased     11      (2)    
(decreased)                  
non-interest                 
revenue                      
Increased     28      (5)    
(decreased)                  
revenues                     
Decreased     (1)     -      
(increased)                  
provision for                
credit losses                
Decreased     (20)    3      
(increased)                  
expenses                     
Decreased     (1)     1      
(increased)                  
income taxes                 
Increased     6       (1)    
(decreased)                  
adjusted net                 
income                       
Impact on     0.01    -      
adjusted                     
earnings per                 
share ($)                     
Adjusted 
results  
in this  
section  
are      
non-GAAP 
amounts  
or       
non-GAAP 
measures.
Please   
refer to 
the      
Non-GAAP 
Measures 
section.  

Net Income

Q4 2019 vs. Q4 2018

Reported net income was $1,194 million, compared with $1,697 million in the prior year, and adjusted net income was $1,607 million, an increase of $76 million or 5% from the prior year. Adjusted net income excludes a $357 million restructuring charge, related to severance and a small amount of real estate-related costs, to continue to improve our efficiency, including accelerating delivery against key bank-wide initiatives focused on digitization, organizational redesign and simplification of the way we do business, as well as a $25 million reinsurance adjustment for the net impact of major reinsurance claims from Japanese typhoons that were incurred after our announced decision to wind down our reinsurance business in the current quarter, the amortization of acquisition-related intangible assets and acquisition integration costs in both periods, and a $203 million benefit from the remeasurement of an employee benefit liability in the prior year. Reported EPS of $1.78 decreased $0.80 or 31% and adjusted EPS of $2.43 increased $0.11 or 5% from the prior year.

Results reflect good performance in our P&C businesses and higher net income in BMO Wealth Management, partially offset by a decrease in BMO Capital Markets and a higher net loss in Corporate Services. Prior year results included a favourable tax item in our U.S. segment.

Q4 2019 vs. Q3 2019

Reported net income decreased $363 million or 23% from the prior quarter and adjusted net income increased $25 million or 2%. Adjusted net income excludes the restructuring charge and reinsurance adjustment in the current quarter, and the amortization of acquisition-related intangible assets and acquisition integration costs in both the current and prior quarter. Reported EPS decreased $0.56 or 24% and adjusted EPS increased $0.05 or 2% from the prior quarter.

Results reflect higher net income in our P&C businesses, with particularly strong performance in Canadian P&C, and in BMO Wealth Management, partially offset by a higher net loss in Corporate Services and a decrease in BMO Capital Markets.

Adjusted results in this Net Income section are non-GAAP amounts or non-GAAP measures. Please refer to the Non-GAAP Measures Section.

Revenue (1)(2)

Q4 2019 vs. Q4 2018

Revenue was $6,087 million, an increase of $194 million or 3% from the prior year and revenue, net of insurance claims, commissions and changes in policy benefit liabilities (CCPB), was $5,752 million, an increase of $249 million or 5%.

Results reflect good performance in our P&C businesses and increases in BMO Wealth Management and BMO Capital Markets, partially offset by a decrease in Corporate Services.

Net interest income was $3,364 million, an increase of $349 million or 12%, or 11% excluding the impact of the stronger U.S. dollar. On an excluding trading basis, net interest income was $2,979 million, an increase of $210 million or 8%, or 7% excluding the impact of the stronger U.S. dollar, largely due to higher loan and deposit balances across all operating groups, partially offset by lower loan margins.

Average earning assets were $778.4 billion, an increase of $66.7 billion or 9%, or $62.7 billion or 9% excluding the impact of the stronger U.S. dollar, due to loan growth, higher securities and higher securities borrowed or purchased under resale agreements. BMO's overall net interest margin increased 3 basis points, primarily due to higher net interest income from trading activities and a higher margin in Canadian P&C, partially offset by a higher volume of assets in BMO Capital Markets and Corporate Services, which have a lower spread than the bank, as well as a lower margin in U.S. P&C. On an excluding trading basis, net interest margin decreased 5 basis points, primarily due to a higher volume of assets in BMO Capital Markets and Corporate Services, which have a lower spread than the bank, and a lower margin in U.S. P&C, partially offset by a higher margin in Canadian P&C.

Non-interest revenue, net of CCPB, was $2,388 million, a decrease of $100 million or 4%, and also 4% excluding the impact of the stronger U.S. dollar, due to lower trading non-interest revenue, partially offset by higher lending and deposit revenue. Non-interest revenue, net of adjusted CCPB, was $2,413 million, a decrease of $75 million or 3%, and also 3% excluding the impact of the stronger U.S. dollar. On an excluding trading basis, net of adjusted CCPB, non-interest revenue was $2,434 million, an increase of $77 million or 3%, and also 3% excluding the impact of the stronger U.S. dollar.

Gross insurance revenue decreased $50 million from the prior year, due to lower annuity sales, offset by relatively unchanged long-term interest rates in the current quarter, compared with increases in long-term interest rates that decreased the fair value of investments in the prior year and stronger equity markets in the current quarter. These changes relate to annuity sales and fair value investments, which are largely offset by changes in policy benefit liabilities, which is reflected in CCPB, as discussed in the Insurance Claims, Commissions and Changes in Policy Benefit Liabilities. We generally focus on analyzing revenue, net of CCPB, given the extent to which insurance revenue can vary and that this variability is largely offset in CCPB.

Q4 2019 vs. Q3 2019

Revenue decreased $579 million or 9% from the prior quarter. Revenue net of CCPB was relatively unchanged from the prior quarter.

Higher revenue in Canadian P&C and BMO Wealth Management were offset by lower revenue in BMO Capital Markets, while U.S. P&C revenue was relatively unchanged and Corporate Services revenue decreased from the prior quarter.

Net interest income increased $147 million or 5% from the prior quarter. On an excluding trading basis, net interest income of $2,979 million was relatively unchanged from the prior quarter, with higher deposit and loan volumes across all operating groups, offset by lower deposit spreads in U.S. P&C, due to rate decreases by the Federal Reserve, and lower net interest income in Corporate Services.

Average earning assets were $778.4 billion, an increase of $15.1 billion or 2%, primarily due to loan growth and increased cash resources. BMO's overall net interest margin increased 4 basis points, primarily due to a higher net interest income from trading activities and a higher margin in Canadian P&C, partially offset by higher assets in Corporate Services, which have a lower spread than the bank, and a lower margin in U.S. P&C. On an excluding trading basis, net interest margin decreased 6 basis points, primarily due to a higher volume of assets in Corporate Services and BMO Capital Markets, which have a lower spread than the bank, and a lower margin in U.S. P&C, partially offset by a higher margin in Canadian P&C.

Non-interest revenue, net of CCPB, decreased $174 million or 7%, primarily due to lower trading non-interest revenue and underwriting and advisory fee revenue. Non-interest revenue, net of adjusted CCPB, decreased $149 million or 6%. On an excluding trading basis, net of adjusted CCPB, non-interest revenue decreased $13 million or 1%.

Gross insurance revenue decreased $554 million from the prior quarter, primarily due to relatively unchanged long-term interest rates in the current quarter, compared with decreases in long-term interest rates that increased the fair value of investments in the prior quarter and lower annuity sales. The decrease in insurance revenue was largely offset by lower CCPB, as discussed in the Insurance Claims, Commissions and Changes in Policy Benefit Liabilities.

Net interest income and non-interest revenue are detailed in the unaudited interim consolidated financial statements.

Adjusted results in this Revenue section are non-GAAP amounts or non-GAAP measures. Please refer to the Non-GAAP Measures Section.

(1) Effective      
    Q1-2019,       
    certain        
    dividend income
    in our Global  
    Markets        
    business has   
    been           
    reclassified   
    from           
    non-interest   
    revenue to net 
    interest       
    income. Results
    for prior      
    periods and    
    related ratios 
    have been      
    reclassified to
    conform to the 
    current        
    period's       
    presentation.  
(2) Effective      
    Q1-2019, the   
    bank adopted   
    IFRS 15,       
    Revenue from   
    Contracts with 
    Customers (IFRS
    15) and elected
    to             
    retrospectively
    present prior  
    periods as if  
    IFRS 15 had    
    always been    
    applied. As a  
    result, loyalty
    rewards and    
    cash promotion 
    costs on cards 
    previously     
    recorded in    
    non-interest   
    expense are    
    presented as a 
    reduction in   
    non-interest   
    revenue. In    
    addition,      
    certain        
    out-of-pocket  
    expenses       
    reimbursed to  
    BMO from       
    customers have 
    been           
    reclassified   
    from a         
    reduction in   
    non-interest   
    expense to     
    non-interest   
    revenue.        

Provision for Credit Losses

Q4 2019 vs. Q4 2018

Total provision for credit losses was $253 million, an increase of $78 million from the prior year. The provision for credit losses ratio was 23 basis points, compared with 18 basis points in the prior year. The provision for credit losses on impaired loans of $231 million increased $54 million from $177 million in the prior year, primarily due to higher provisions in BMO Capital Markets and our P&C businesses. The provision for credit losses on impaired loans ratio was 21 basis points, compared with 18 basis points in the prior year. There was a $22 million provision for credit losses on performing loans in the current quarter, compared with a $2 million recovery of credit losses on performing loans in the prior year. The $22 million provision for credit losses on performing loans in the current quarter was due to portfolio growth, negative migration and scenario weight change, partially offset by changes in economic outlook. The year-over-year increase in the provision for credit losses on performing loans was as a result of negative migration in the current quarter, compared with positive migration in the prior year, and higher provisions in the current quarter from changes in scenario weights, partially offset by lower provisions in the current quarter from changes in the economic outlook.

Q4 2019 vs. Q3 2019

Total provision for credit losses decreased $53 million from the prior quarter. The provision for credit losses ratio was 23 basis points, compared with 28 basis points in the prior quarter. The provision for credit losses on impaired loans decreased $12 million to $231 million, due to lower impaired loan provisions in Canadian P&C, partially offset by higher loan losses in BMO Capital Markets and U.S. P&C. The provision for credit losses on impaired loans ratio was 21 basis points, compared with 22 basis points in the prior quarter. There was a $22 million provision for credit losses on performing loans in the current quarter, compared with a $63 million provision for credit losses on performing loans in the prior quarter. The majority of the quarter-over-quarter decrease was due to a more favourable impact on credit losses on performing loans in the current quarter, resulting from changes in economic outlook, as well as a smaller impact from both balance growth and negative migration.

Provision for Credit Losses by Operating Group

                               BMO Wealth BMO     Corporate      
                                          Capital                
(Canadian  Canadian U.S. Total Management Markets Services  Total
$ in       P&C      P&C  P&C                                Bank 
millions)                                                        
Q4-2019                                                          
Provision  134      66   200   1          32      (2)       231  
for                                                              
(recovery                                                        
of) credit                                                       
losses on                                                        
impaired                                                         
loans                                                            
Provision  11       4    15    (1)        8       -         22   
for                                                              
(recovery                                                        
of) credit                                                       
losses on                                                        
performing                                                       
loans                                                            
Total      145      70   215   -          40      (2)       253  
provision                                                        
for                                                              
(recovery                                                        
of) credit                                                       
losses                                                           
Q3-2019                                                          
Provision  174      61   235   -          7       1         243  
for                                                              
(recovery                                                        
of) credit                                                       
losses on                                                        
impaired                                                         
loans                                                            
Provision  30       37   67    (2)        3       (5)       63   
for                                                              
(recovery                                                        
of) credit                                                       
losses on                                                        
performing                                                       
loans                                                            
Total      204      98   302   (2)        10      (4)       306  
provision                                                        
for                                                              
(recovery                                                        
of) credit                                                       
losses                                                           
Q4-2018                                                          
Provision  118      61   179   2          (3)     (1)       177  
for                                                              
(recovery                                                        
of) credit                                                       
losses on                                                        
impaired                                                         
loans                                                            
Provision  (15)     18   3     1          (4)     (2)       (2)  
for                                                              
(recovery                                                        
of) credit                                                       
losses on                                                        
performing                                                       
loans                                                            
Total      103      79   182   3          (7)     (3)       175  
provision                                                        
for                                                              
(recovery                                                        
of) credit                                                       
losses                                                           
Fiscal                                                           
2019                                                             
Provision  544      160  704   2          52      (7)       751  
for                                                              
(recovery                                                        
of) credit                                                       
losses on                                                        
impaired                                                         
loans                                                            
Provision  63       37   100   (2)        28      (5)       121  
for                                                              
(recovery                                                        
of) credit                                                       
losses on                                                        
performing                                                       
loans                                                            
Total      607      197  804   -          80      (12)      872  
provision                                                        
for                                                              
(recovery                                                        
of) credit                                                       
losses                                                           
Fiscal                                                           
2018                                                             
Provision  466      258  724   6          (17)    (13)      700  
for                                                              
(recovery                                                        
of) credit                                                       
losses on                                                        
impaired                                                         
loans                                                            
Provision  3        (38) (35)  -          (1)     (2)       (38) 
for                                                              
(recovery                                                        
of) credit                                                       
losses on                                                        
performing                                                       
loans                                                            
Total      469      220  689   6          (18)    (15)      662  
provision                                                        
for                                                              
(recovery                                                        
of) credit                                                       
losses                                                            

Provision for Credit Losses Performance Ratios

                 Q4-2019 Q3-2019 Q4-2018 Fiscal Fiscal
                                         2019   2018  
Total            0.23    0.28    0.18    0.20   0.17  
PCL-to-average                                        
net loans and                                         
acceptances                                           
(annualized) (%)                                      
PCL on impaired  0.21    0.22    0.18    0.17   0.18  
loans-to-average                                      
net loans and                                         
acceptances                                           
(annualized) (%)                                       

Impaired Loans

Total gross impaired loans (GIL) were $2,629 million at the end of the current quarter, up from $1,936 million in the prior year, with the largest increase in impaired loans in oil and gas. GIL increased $197 million from $2,432 million in the prior quarter.

Factors contributing to the change in GIL are outlined in the table below. Loans classified as impaired during the quarter totalled $799 million, up from $443 million in the prior year, and up from $679 million in the prior quarter.

Changes in Gross Impaired Loans (GIL) (1) and Acceptances

(Canadian $ Q4-2019 Q3-2019 Q4-2018 Fiscal Fiscal 
in                                  2019   2018   
millions,                                         
except as                                         
noted)                                            
GIL,        2,432   2,335   2,076   1,936  2,220  
beginning                                         
of period                                         
Classified  799     679     443     2,686  2,078  
as impaired                                       
during the                                        
period                                            
Transferred (220)   (132)   (188)   (604)  (708)  
to not                                            
impaired                                          
during the                                        
period                                            
Net         (219)   (232)   (214)   (800)  (1,051)
repayments                                        
Amounts     (159)   (138)   (194)   (528)  (618)  
written-off                                       
Recoveries  -       -       -       -      -      
of loans                                          
and                                               
advances                                          
previously                                        
written-off                                       
Disposals   -       (57)    (5)     (57)   (11)   
of loans                                          
Foreign     (4)     (23)    18      (4)    26     
exchange                                          
and other                                         
movements                                         
GIL, end of 2,629   2,432   1,936   2,629  1,936  
period                                            
GIL to      0.58    0.55    0.48    0.58   0.48   
gross loans                                       
and                                               
acceptances                                       
(%)                                                
(1) GIL excludes purchased credit impaired loans. 

Insurance Claims, Commissions and Changes in Policy Benefit Liabilities

Reported insurance claims, commissions and changes in policy benefit liabilities (CCPB) were $335 million in the current quarter, a decrease of $55 million from $390 million in the prior year, and adjusted CCPB, which excludes a $25 million net impact of major reinsurance claims from Japanese typhoons that were incurred after our announced decision to wind down our reinsurance business, was $310 million, a decrease of $80 million from the prior year.

Adjusted CCPB decreased, due to the impact of lower annuity sales, offset by relatively unchanged long-term interest rates in the current year, compared with increases in long-term interest rates that decreased the fair value of policy benefit liabilities in the prior year and the impact of stronger equity markets in the current year. CCPB decreased $552 million from $887 million in the prior quarter, and adjusted CCPB decreased $577 million from the prior quarter, due to relatively unchanged long-term interest rates in the current quarter, compared with decreases in long-term interest rates that increased the fair value of policy benefit liabilities in the prior quarter, and the impact of lower annuity sales. The changes related to the fair value of policy benefit liabilities and annuity sales were largely offset in revenue.

Adjusted results in this CCPB section are non-GAAP amounts or non-GAAP measures. Please refer to the Non-GAAP Measures Section.

Non-Interest Expense

Reported non-interest expense of $3,987 million increased $794 million or 25% from the prior year. Adjusted non-interest expense of $3,463 million increased $42 million or 1%, and also 1%, excluding the impact of the stronger U.S. dollar, from the prior year. Adjusted non-interest expense excludes the restructuring charge in the current quarter, the amortization of acquisition-related intangible assets and acquisition integration costs in both periods, as well as the benefit from the remeasurement of an employee benefit liability in the prior year. The increase largely reflected higher technology and employee-related costs, including the impact of the acquisition of KGS-Alpha, partially offset by lower premises costs.

Reported non-interest expense increased $496 million from the prior quarter and adjusted non-interest expense, which excludes the restructuring charge in the current quarter, the amortization of acquisition-related intangible assets and acquisition integration costs in both periods, was relatively unchanged.

Reported operating leverage on a net revenue basis was negative 20.4%, compared with positive 13.5% in the prior year. Adjusted operating leverage on a net revenue basis was positive 3.8%, compared with positive 2.9% in the prior year.

The reported efficiency ratio was 65.5%, compared with 54.2% in the prior year and was 69.3% on a net revenue basis, compared with 58.0% in the prior year. The adjusted efficiency ratio was 56.9%, compared with 58.1% in the prior year and 60.0% on a net revenue basis, compared with 62.2% in the prior year.

Non-interest expense is detailed in the condensed consolidated financial statements.

Adjusted results in this Non-Interest Expense section are non-GAAP amounts or non-GAAP measures. Please refer to the Non-GAAP Measures Section.

Income Taxes

The provision for income taxes was $318 million, a decrease of $120 million from the fourth quarter of 2018 and a decrease of $107 million from the third quarter of 2019. The effective tax rate for the current quarter was 21.0%, compared with 20.6% in the fourth quarter of 2018, and 21.5% in the third quarter of 2019.

The adjusted provision for income taxes was $454 million, an increase of $78 million from the fourth quarter of 2018, and an increase of $22 million from the third quarter of 2019. The adjusted effective tax rate was 22.0% in the current quarter, compared with 19.7% in the fourth quarter of 2018 and 21.5% in the third quarter of 2019. The higher reported and adjusted effective tax rate in the current quarter relative to the fourth quarter of 2018 was primarily due to a favourable U.S. tax item in the prior year.

Adjusted results in this Income Taxes section are non-GAAP amounts or non-GAAP measures. Please refer to the Non-GAAP Measures section.

Capital Management

BMO manages its capital within the capital management framework described in the Enterprise-Wide Capital Management section of BMO's 2019 Annual Report.

Fourth Quarter 2019 Regulatory Capital Review

BMO's Common Equity Tier 1 (CET1) Ratio was 11.4% as at October 31, 2019.

The CET1 Ratio was consistent with the prior quarter as retained earnings growth, which absorbed the restructuring charge, was offset by higher Risk-Weighted Assets (RWA).

CET1 Capital was $36.1 billion as at October 31, 2019, an increase from $35.7 billion as at July 31, 2019, driven by retained earnings growth and a lower deduction for deferred tax assets, partially offset by the net impact from higher pension and other post-employment benefit obligations due to lower discount rates. CET1 capital increased from $32.7 billion as at October 31, 2018, due to retained earnings growth, and to a lesser degree, a lower deduction for deferred tax assets and higher unrealized gains from securities fair valued through accumulated other comprehensive income, partially offset by an increase in the deduction for shortfall of provisions to expected losses and the net impact from higher pension and other post-employment benefit obligations due to lower discount rates.

RWA was $317.0 billion as at October 31, 2019, up from $313.0 billion as at July 31, 2019 and $289.2 billion as at October 31, 2018, mostly from business growth.

The Tier 1 Capital Ratio was 13.0% as at October 31, 2019, compared with 13.0% as at July 31, 2019, and 12.9% as at October 31, 2018. The Total Capital Ratio was 15.2% as at October 31, 2019, compared with 15.3% as at July 31, 2019, and 15.2% as at October 31, 2018. The Tier 1 and Total Capital ratios were relatively unchanged from prior periods, as higher capital, primarily from retained earnings growth, was offset by higher RWA.

The impact of foreign exchange movements on capital ratios was largely offset. BMO's investments in foreign operations are primarily denominated in U.S. dollars, and the foreign exchange impact of U.S.-dollar-denominated RWA and capital deductions may result in variability in the bank's capital ratios. BMO may manage the impact of foreign exchange movements on its capital ratios and did so during the fourth quarter. Any such activities could also impact our book value and return on equity.

BMO's Leverage Ratio was 4.3% as at October 31, 2019, compared with 4.3% as at July 31, 2019, and 4.2% as at October 31, 2018, as higher Tier 1 Capital, mainly from retained earnings growth, was generally offset by higher leverage exposures from business growth.

Regulatory Capital

Regulatory capital requirements for BMO are determined in accordance with guidelines issued by the Office of the Superintendent Financial Institutions Canada (OSFI), which is based on the capital standards developed by the Basel Committee on Banking Supervision (BCBS). For more information, refer to the Enterprise-Wide Capital Management section of BMO's 2019 Annual Report.

OSFI's capital requirements are summarized in the following table.

(% of         Minimum             Total    Domestic        OSFI capital BMO     
risk-weighted capitalrequirements Pillar   StabilityBuffer requirements Capital 
assets)                           1Capital (2)             including    and     
                                  Buffer                   capital      Leverage
                                  (1)                      buffers      Ratios  
                                                                        as at   
                                                                        October 
                                                                        31, 2019
Common Equity 4.5%                3.5%     2.0%            10.0%        11.4%   
Tier 1 Ratio                                                                    
Tier 1        6.0%                3.5%     2.0%            11.5%        13.0%   
Capital Ratio                                                                   
Total Capital 8.0%                3.5%     2.0%            13.5%        15.2%   
Ratio                                                                           
Leverage      3.0%                na       na              3.0%         4.3%    
Ratio (3)                                                                        
(1)        The minimum     
           risk-based      
           capital ratios  
           set out in      
           OSFI's Capital  
           Adequacy        
           Requirements    
           (CAR) Guideline 
           are augmented by
           3.5% in Pillar 1
           Capital Buffers,
           which can absorb
           losses during   
           periods of      
           stress. The     
           Pillar 1 Capital
           Buffers include 
           a 2.5% Capital  
           Conservation    
           Buffer, a 1.0%  
           Common Equity   
           Tier 1 Surcharge
           for domestic    
           systematically  
           important banks 
           (D-SIBs) and a  
           Countercyclical 
           Buffer as       
           prescribed by   
           OSFI (immaterial
           for the fourth  
           quarter of      
           2019). If a     
           bank's capital  
           ratios fall     
           within the range
           of this combined
           buffer,         
           restrictions on 
           discretionary   
           distributions of
           earnings (such  
           as dividends,   
           share           
           repurchases and 
           discretionary   
           compensation)   
           would ensue,    
           with the degree 
           of such         
           restrictions    
           varying         
           according to the
           position of the 
           bank's ratios   
           within the      
           buffer range.   
(2)        OSFI requires   
           all D-SIBs to   
           maintain a      
           Domestic        
           Stability Buffer
           (DSB) against   
           Pillar 2 risks  
           associated with 
           systemic        
           vulnerabilities.
           The DSB can     
           range from 0% to
           2.5% of total   
           RWA and is set  
           at 2.0%         
           effective       
           October 31,     
           2019. Breaches  
           of the DSB will 
           not result in a 
           bank being      
           subject to      
           automatic       
           constraints on  
           capital         
           distributions.  
(3)        Minimum leverage
           ratio           
           requirement as  
           set out in      
           OSFI's Leverage 
           Requirements    
           Guideline.      
na - not  
applicable 

Regulatory Capital Position

(Canadian $   Q4-2019 Q3-2019 Q4-2018
in millions,                         
except as                            
noted)                               
Gross common  45,728  45,295  41,387 
equity (1)                           
Regulatory    (9,657) (9,632) (8,666)
adjustments                          
applied to                           
common equity                        
Common Equity 36,071  35,663  32,721 
Tier 1                               
Capital                              
(CET1)                               
Additional    5,348   5,348   4,790  
Tier 1                               
eligible                             
capital (2)                          
Regulatory    (218)   (217)   (291)  
adjustments                          
applied to                           
Tier 1                               
Additional    5,130   5,131   4,499  
Tier 1                               
Capital (AT1)                        
Tier 1        41,201  40,794  37,220 
Capital (T1 =                        
CET1 + AT1)                          
Tier 2        7,189   7,070   7,017  
eligible                             
capital (3)                          
Regulatory    (50)    (75)    (121)  
adjustments                          
applied to                           
Tier 2                               
Tier 2        7,139   6,995   6,896  
Capital (T2)                         
Total Capital 48,340  47,789  44,116 
(TC = T1 +                           
T2)                                  
Risk-Weighted                        
Assets and                           
Leverage                             
Ratio                                
Exposures                            
(4)(5)                               
CET1 Capital  317,029 313,003 289,237
Risk-Weighted                        
Assets                               
Tier 1        317,029 313,003 289,420
Capital                              
Risk-Weighted                        
Assets                               
Total Capital 317,029 313,003 289,604
Risk-Weighted                        
Assets                               
Leverage      956,493 943,275 876,106
Ratio                                
Exposures                            
Capital                              
Ratios (%)                           
CET1 Ratio    11.4    11.4    11.3   
Tier 1        13.0    13.0    12.9   
Capital Ratio                        
Total Capital 15.2    15.3    15.2   
Ratio                                
Leverage      4.3     4.3     4.2    
Ratio                                 
(1) Gross common 
    equity       
    includes     
    issued       
    qualifying   
    common       
    shares,      
    retained     
    earnings,    
    accumulated  
    other        
    comprehensive
    income and   
    eligible     
    common share 
    capital      
    issued by    
    subsidiaries.
(2) Additional   
    Tier 1       
    eligible     
    capital      
    includes     
    directly and 
    indirectly   
    issued       
    qualifying   
    Additional   
    Tier 1       
    instruments. 
(3) Tier 2       
    eligible     
    capital      
    includes     
    subordinated 
    debentures   
    and may      
    include      
    certain loan 
    loss         
    allowances.  
(4) For          
    institutions 
    using        
    advanced     
    approaches   
    for credit   
    risk or      
    operational  
    risk, there  
    is a capital 
    floor as     
    prescribed in
    OSFI's CAR   
    Guideline.   
(5) The Credit   
    Valuation    
    Adjustment   
    (CVA) was    
    fully phased 
    in starting  
    Q1-2019. The 
    applicable   
    scalars for  
    CET1, Tier 1 
    Capital and  
    Total Capital
    were 80%, 83%
    and 86%,     
    respectively,
    in fiscal    
    2018.         

Capital Developments

We expect a combined impact of approximately 15 to 20 basis points on our CET1 Ratio in the first quarter of fiscal 2020, from the adoption of IFRS 16, Leases, and the expiry of transitional arrangements for standardized approach for counterparty credit risk and the revised securitization framework. For information on these and other regulatory developments, refer to the Enterprise-Wide Capital Management section of BMO's 2019 Annual Report.

During the quarter, 196,539 common shares were issued through the exercise of stock options.

On November 14, 2019, we announced the conversion results of our Non-Cumulative 5-Year Rate Reset Class B Preferred Shares, Series 31 (Preferred Shares Series 31). During the conversion period, which ran from October 28, 2019 to November 12, 2019, 69,570 Preferred Shares Series 31 were tendered for conversion into Non-Cumulative 5-Year Rate Reset Class B Preferred Shares, Series 32 (Preferred Shares Series 32), which is less than the minimum 1,000,000 required to give effect to the conversion, as described in the Preferred Shares Series 31 prospectus supplement dated July 23, 2014. As a result, no Preferred Shares Series 32 shares were issued and holders of Preferred Shares Series 31 retained their shares. The dividend rate for the Preferred Shares Series 31 is 3.851% for the five-year period commencing on November 25, 2019, and ending on November 24, 2024.

On September 19, 2019, we redeemed all of our outstanding $1,000 million subordinate debentures, Series H Medium-Term Notes First Tranche at a redemption price of 100 percent of the principal amount plus unpaid accrued interest to, but excluding, the redemption date.

On September 16, 2019, we issued $1,000 million subordinated notes, Series J Medium-Term Notes First Tranche through our Canadian Medium-Term Note Program.

On August 14, 2019, we announced the conversion results of our Non-Cumulative 5-Year Rate Reset Class B Preferred Shares, Series 29 (Preferred Shares Series 29). During the conversion period, which ran from July 26, 2019 to August 12, 2019, 223,098 Preferred Shares Series 29 were tendered for conversion into Non-Cumulative 5-Year Rate Reset Class B Preferred Shares Series 30 (Preferred Shares Series 30), which is less than the minimum 1,000,000 required to give effect to the conversion, as described in the Preferred Shares Series 29 prospectus supplement dated May 30, 2014. As a result, no Preferred Shares Series 30 shares were issued and holders of Preferred Shares Series 29 retained their shares. The dividend rate for the Preferred Shares Series 29 is 3.624% for the five-year period commencing on August 25, 2019, and ending on August 24, 2024.

Dividends

On December 3, 2019, BMO announced that the Board of Directors had declared a quarterly dividend on common shares of $1.06 per share, up $0.03 per share or 3% from the prior quarter and up $0.06 per share or 6% from the prior year. The dividend is payable on February 26, 2020, to shareholders of record on February 3, 2020. Common shareholders may elect to have their cash dividends reinvested in common shares of BMO, in accordance with the Shareholder Dividend Reinvestment and Share Purchase Plan.

For the purposes of the Income Tax Act (Canada) and any similar provincial and territorial legislation, BMO designates all dividends paid or deemed to be paid on both its common and preferred shares as "eligible dividends", unless indicated otherwise.

Caution

This Capital Management section contains forward-looking statements. Please refer to the Caution Regarding Forward-Looking Statements.

Review of Operating Groups' Performance

How BMO Reports Operating Group Results

The following sections review the financial results of each of our operating groups and operating segments for the fourth quarter of 2019.

Periodically, certain business lines and units within the business lines are transferred between client and corporate support groups to more closely align BMO's organizational structure with its strategic priorities. In addition, allocations of revenue, provisions for credit losses and expenses are updated to better align with current experience. Results for prior periods are reclassified to conform with the current period's presentation.

Effective the first quarter of 2019, certain dividend income in our Global Markets business has been reclassified from non-interest revenue to net interest income. Results for prior periods and related ratios have been reclassified to conform with the current period's presentation.

The bank adopted IFRS 15, Revenue from Contracts with Customers (IFRS 15), effective the first quarter of 2019, and we elected to retrospectively present prior periods as if IFRS 15 had always been applied. As a result, loyalty rewards and cash promotion costs on cards previously recorded in non-interest expense are presented as a reduction in non-interest revenue. In addition, when customers reimburse us for certain out-of-pocket expenses incurred on their behalf, we record the reimbursement in revenue. Previously, these reimbursements were recorded as a reduction in the related expense.

BMO analyzes revenue at the consolidated level based on GAAP revenue as reported in the consolidated financial statements rather than on a taxable equivalent basis (teb), which is consistent with our Canadian peer group. Like many banks, we analyze revenue on a teb basis at the operating group level. Revenue and the provision for income taxes are increased on tax-exempt securities to an equivalent before-tax basis to facilitate comparisons of income between taxable and tax-exempt sources. The offset to the group teb adjustments is reflected in Corporate Services revenue and provision for income taxes.

Personal and Commercial Banking (P&C)

(Canadian $ in      Q4-2019 Q3-2019 Q4-2018 Fiscal  Fiscal 
millions, except as                         2019    2018   
noted)                                                     
Net interest income 2,597   2,565   2,431   10,096  9,384  
(teb)                                                      
Non-interest        847     848     801     3,290   3,165  
revenue (1)                                                
Total revenue (teb) 3,444   3,413   3,232   13,386  12,549 
(1)                                                        
Provision for       200     235     179     704     724    
(recovery of)                                              
credit losses on                                           
impaired loans                                             
Provision for       15      67      3       100     (35)   
(recovery of)                                              
credit losses on                                           
performing loans                                           
Total provision for 215     302     182     804     689    
credit losses                                              
Non-interest        1,763   1,774   1,707   6,993   6,678  
expense (1)                                                
Income before       1,466   1,337   1,343   5,589   5,182  
income taxes                                               
Provision for       357     321     297     1,352   1,239  
income taxes (teb)                                         
Reported net income 1,109   1,016   1,046   4,237   3,943  
Amortization of     11      12      12      45      47     
acquisition-related                                        
intangible assets                                          
(2)                                                        
Adjusted net income 1,120   1,028   1,058   4,282   3,990  
Net income growth   6.0     1.1     17.6    7.5     12.1   
(%)                                                        
Adjusted net income 5.9     1.1     17.3    7.3     11.9   
growth (%)                                                 
Revenue growth (%)  6.5     6.4     7.5     6.7     5.5    
Non-interest        3.3     4.1     6.2     4.7     3.9    
expense growth (%)                                         
Adjusted            3.4     4.2     6.3     4.8     4.0    
non-interest                                               
expense growth (%)                                         
Return on equity    17.8    16.4    19.0    17.5    18.5   
(%)                                                        
Adjusted return on  18.0    16.6    19.2    17.7    18.8   
equity (%)                                                 
Operating leverage  3.2     2.3     1.3     2.0     1.6    
(teb) (%)                                                  
Adjusted operating  3.1     2.2     1.2     1.9     1.5    
leverage (teb) (%)                                         
Efficiency ratio    51.2    52.0    52.8    52.2    53.2   
(teb) (%)                                                  
Adjusted efficiency 50.8    51.5    52.3    51.8    52.7   
ratio (teb) (%)                                            
Net interest margin 2.92    2.94    2.98    2.95    2.97   
on average earning                                         
assets (teb) (%)                                           
Average earning     352,731 346,301 324,014 342,153 316,359
assets                                                     
Average gross loans 362,865 355,478 330,502 350,762 321,537
and acceptances                                            
Average net loans   361,186 353,873 328,923 349,157 320,019
and acceptances                                            
Average deposits    293,977 283,924 258,602 281,858 250,221 
(1)       Effective      
          Q1-2019, the   
          bank adopted   
          IFRS 15,       
          Revenue from   
          Contracts with 
          Customers (IFRS
          15) and elected
          to             
          retrospectively
          present prior  
          periods as if  
          IFRS 15 had    
          always been    
          applied. As a  
          result, loyalty
          rewards and    
          cash promotion 
          costs on cards 
          previously     
          recorded in    
          non-interest   
          expense are    
          presented as a 
          reduction in   
          non-interest   
          revenue.       
(2)       Total P&C      
          before tax     
          amounts of $15 
          million in both
          Q4-2019 and    
          Q3-2019, $16   
          million in     
          Q4-2018; $59   
          million for    
          fiscal 2019 and
          $61 million for
          fiscal 2018 are
          included in    
          non-interest   
          expense.       
Adjusted 
results  
in this  
table are
non-GAAP 
amounts  
or       
non-GAAP 
measures.
Please   
refer to 
the      
Non-GAAP 
Measures 
section.  

The Personal and Commercial Banking (P&C) operating group represents the sum of our two retail and commercial operating segments, Canadian Personal and Commercial Banking (Canadian P&C) and U.S. Personal and Commercial Banking (U.S. P&C). The P&C banking business reported net income of $1,109 million and adjusted net income of $1,120 million both increased 6% from the prior year, or 5% excluding the impact of the stronger U.S. dollar. Adjusted net income excludes the amortization of acquisition-related intangible assets. These operating segments are reviewed separately in the sections that follow.

Adjusted results in this P&C section are non-GAAP amounts or non-GAAP measures. Please refer to the Non-GAAP Measures section.

Canadian Personal and Commercial Banking (Canadian P&C)

(Canadian $ in      Q4-2019 Q3-2019 Q4-2018 Fiscal  Fiscal 
millions, except as                         2019    2018   
noted)                                                     
Net interest income 1,540   1,498   1,421   5,878   5,541  
Non-interest        543     550     522     2,128   2,069  
revenue (1)                                                
Total revenue (1)   2,083   2,048   1,943   8,006   7,610  
Provision for       134     174     118     544     466    
(recovery of)                                              
credit losses on                                           
impaired loans                                             
Provision for       11      30      (15)    63      3      
(recovery of)                                              
credit losses on                                           
performing loans                                           
Total provision for 145     204     103     607     469    
credit losses                                              
Non-interest        971     970     931     3,854   3,710  
expense (1)                                                
Income before       967     874     909     3,545   3,431  
income taxes                                               
Provision for       251     226     235     919     882    
income taxes                                               
Reported net income 716     648     674     2,626   2,549  
Amortization of     -       1       1       2       2      
acquisition-related                                        
intangible assets                                          
(2)                                                        
Adjusted net income 716     649     675     2,628   2,551  
Personal revenue    1,294   1,273   1,244   4,998   4,921  
Commercial revenue  789     775     699     3,008   2,689  
Net income growth   6.3     1.1     8.9     3.0     2.0    
(%)                                                        
Revenue growth (%)  7.1     5.9     4.8     5.2     3.7    
Non-interest        4.4     4.0     4.1     3.9     5.0    
expense growth (%)                                         
Adjusted            4.4     4.0     4.1     3.9     5.0    
non-interest                                               
expense growth (%)                                         
Return on equity    28.6    26.3    31.2    27.3    30.5   
(%)                                                        
Adjusted return on  28.6    26.3    31.2    27.3    30.6   
equity (%)                                                 
Operating leverage  2.7     1.9     0.7     1.3     (1.3)  
(%)                                                        
Adjusted operating  2.7     1.9     0.7     1.3     (1.3)  
leverage (%)                                               
Efficiency ratio    46.7    47.3    47.9    48.1    48.7   
(%)                                                        
Net interest margin 2.69    2.65    2.62    2.64    2.60   
on average earning                                         
assets (%)                                                 
Average earning     227,377 224,073 215,290 222,513 212,965
assets                                                     
Average gross loans 243,648 239,310 226,953 237,142 223,536
and acceptances                                            
Average net loans   242,710 238,434 226,070 236,253 222,673
and acceptances                                            
Average deposits    183,975 177,093 162,480 175,125 159,483 
(1)       Effective      
          Q1-2019, the   
          bank adopted   
          IFRS 15,       
          Revenue from   
          Contracts with 
          Customers (IFRS
          15) and elected
          to             
          retrospectively
          present prior  
          periods as if  
          IFRS 15 had    
          always been    
          applied. As a  
          result, loyalty
          rewards and    
          cash promotion 
          costs on cards 
          previously     
          recorded in    
          non-interest   
          expense are    
          presented as a 
          reduction in   
          non-interest   
          revenue.       
(2)       Before tax     
          amounts of $nil
          in Q4-2019, $1 
          million in both
          Q3-2019 and    
          Q4-2018; $2    
          million in both
          fiscal 2019 and
          fiscal 2018 are
          included in    
          non-interest   
          expense.       
Adjusted 
results  
in this  
table are
non-GAAP 
amounts  
or       
non-GAAP 
measures.
Please   
refer to 
the      
Non-GAAP 
Measures 
section.  

Q4 2019 vs. Q4 2018

Canadian P&C reported net income was $716 million, an increase of $42 million and adjusted net income was $716 million, an increase of $41 million or 6% from the prior year. Adjusted net income excludes the amortization of acquisition-related intangible assets. Results reflect strong revenue growth, partially offset by higher provisions for credit losses and higher expenses.

Revenue was $2,083 million, an increase of $140 million or 7% from the prior year, due to higher balances across all products, higher margins and increased non-interest revenue. Net interest margin of 2.69% increased 7 basis points due to higher long-term rates, a favourable product mix and the benefit of a widening Prime rate to the Banker's Acceptances (BA) rate.

Personal revenue increased $50 million or 4%, due to higher balances across all products and higher margins, partially offset by lower non-interest revenue. Commercial revenue increased $90 million or 13%, due to higher balances across products, higher non-interest revenue and higher margins.

Total provision for credit losses was $145 million, an increase of $42 million from the prior year. The provision for credit losses on impaired loans increased $16 million, due to higher consumer and commercial provisions. There was an $11 million provision for credit losses on performing loans in the current quarter compared with a $15 million recovery of credit losses on performing loans in the prior year.

Non-interest expense was $971 million, an increase of $40 million or 4%, primarily due to investment in the business, including technology and sales force investments.

Average gross loans and acceptances of $243.6 billion increased $16.7 billion or 7% from the prior year. Total personal lending balances (excluding retail cards) increased 3%, including 5% growth in proprietary mortgages and amortizing home equity line of credit loans. Commercial loan balances (excluding corporate cards) increased 16%. Average deposits of $184.0 billion increased $21.5 billion or 13%. Personal deposit balances increased 14% and commercial deposit balances increased 12%.

Q4 2019 vs. Q3 2019

Reported net income increased $68 million and adjusted net income increased $67 million or 10% from the prior quarter.

Revenue increased $35 million or 2%, due to higher balances across all products and higher margins, partially offset by lower non-interest revenue. Net interest margin of 2.69% increased 4 basis points, due to a favourable product mix and the benefit of higher long-term rates.

Personal revenue increased $21 million or 2%, due to higher balances across all products, higher margins and increased non-interest revenue. Commercial revenue increased $14 million or 2%, due to higher margins and higher balances across all products, partially offset by lower non-interest revenue.

Total provision for credit losses decreased $59 million. The provision for credit losses on impaired loans decreased $40 million with lower consumer and commercial provisions in the current quarter. There was a $11 million provision for credit losses on performing loans in the current quarter, compared with a $30 million provision for credit losses on performing loans in the prior quarter.

Non-interest expense increased $1 million.

Average gross loans and acceptances increased $4.3 billion or 2% and average deposits increased $6.9 billion or 4%.

Adjusted results in this Canadian P&C section are non-GAAP amounts or non-GAAP measures. Please refer to the Non-GAAP Measures section.

U.S. Personal and Commercial Banking (U.S. P&C)

(US$ in millions,   Q4-2019 Q3-2019 Q4-2018 Fiscal  Fiscal 
except as noted)                            2019    2018   
Net interest income 798     804     774     3,174   2,983  
(teb)                                                      
Non-interest        230     225     214     875     851    
revenue (1)                                                
Total revenue (teb) 1,028   1,029   988     4,049   3,834  
(1)                                                        
Provision for       51      45      46      121     201    
(recovery of)                                              
credit losses on                                           
impaired loans                                             
Provision for       3       28      14      28      (31)   
(recovery of)                                              
credit losses on                                           
performing loans                                           
Total provision for 54      73      60      149     170    
credit losses                                              
Non-interest        598     606     594     2,362   2,303  
expense (1)                                                
Income before       376     350     334     1,538   1,361  
income taxes                                               
Provision for       79      73      49      326     279    
income taxes (teb)                                         
Reported net income 297     277     285     1,212   1,082  
Amortization of     8       8       9       32      35     
acquisition-related                                        
intangible assets                                          
(2)                                                        
Adjusted net income 305     285     294     1,244   1,117  
Personal revenue    337     348     327     1,362   1,257  
Commercial revenue  691     681     661     2,687   2,577  
Net income growth   4.1     (0.6)   32.9    12.0    38.7   
(%)                                                        
Adjusted net income 3.8     (0.8)   31.5    11.4    36.9   
growth (%)                                                 
Revenue growth (%)  4.1     5.3     8.1     5.6     9.9    
Non-interest        0.6     2.3     5.4     2.6     4.1    
expense growth (%)                                         
Adjusted            0.7     2.5     5.6     2.7     4.3    
non-interest                                               
expense growth (%)                                         
Return on equity    10.5    9.8     11.1    11.0    10.8   
(%)                                                        
Adjusted return on  10.8    10.1    11.5    11.3    11.1   
equity (%)                                                 
Operating leverage  3.5     3.0     2.7     3.0     5.8    
(teb) (%)                                                  
Adjusted operating  3.4     2.8     2.5     2.9     5.6    
leverage (teb) (%)                                         
Efficiency ratio    58.1    59.0    60.2    58.3    60.1   
(teb) (%)                                                  
Adjusted efficiency 57.1    57.9    59.0    57.3    58.9   
ratio (teb) (%)                                            
Net interest margin 3.35    3.46    3.69    3.53    3.72   
on average earning                                         
assets (teb) (%)                                           
Average earning     94,682  92,116  83,336  90,035  80,255 
assets                                                     
Average gross loans 90,047  87,549  79,369  85,505  76,067 
and acceptances                                            
Average net loans   89,488  87,000  78,835  84,966  75,558 
and acceptances                                            
Average deposits    83,085  80,520  73,668  80,316  70,431 
(Canadian $                                                
equivalent in                                              
millions)                                                  
Net interest income 1,057   1,067   1,010   4,218   3,843  
(teb)                                                      
Non-interest        304     298     279     1,162   1,096  
revenue (1)                                                
Total revenue (teb) 1,361   1,365   1,289   5,380   4,939  
(1)                                                        
Provision for       66      61      61      160     258    
credit losses on                                           
impaired loans                                             
Provision for       4       37      18      37      (38)   
(recovery of)                                              
credit losses on                                           
performing loans                                           
Total provision for 70      98      79      197     220    
credit losses                                              
Non-interest        792     804     776     3,139   2,968  
expense (1)                                                
Income before       499     463     434     2,044   1,751  
income taxes                                               
Provision for       106     95      62      433     357    
income taxes (teb)                                         
Reported net income 393     368     372     1,611   1,394  
Adjusted net income 404     379     383     1,654   1,439  
Net income growth   5.6     1.2     37.4    15.6    36.9   
(%)                                                        
Adjusted net income 5.2     1.0     35.9    15.0    35.1   
growth (%)                                                 
Revenue growth (%)  5.6     7.2     11.8    8.9     8.4    
Non-interest        2.1     4.2     9.0     5.8     2.7    
expense growth (%)                                         
Adjusted            2.2     4.3     9.2     5.9     2.9    
non-interest                                               
expense growth (%)                                         
Average earning     125,354 122,228 108,724 119,640 103,394
assets                                                     
Average gross loans 119,217 116,168 103,549 113,620 98,001 
and acceptances                                            
Average net loans   118,476 115,439 102,853 112,904 97,346 
and acceptances                                            
Average deposits    110,002 106,831 96,122  106,733 90,738  
(1)       Effective      
          Q1-2019, the   
          bank adopted   
          IFRS 15,       
          Revenue from   
          Contracts with 
          Customers (IFRS
          15) and elected
          to             
          retrospectively
          present prior  
          periods as if  
          IFRS 15 had    
          always been    
          applied. As a  
          result, loyalty
          rewards and    
          cash promotion 
          costs on cards 
          previously     
          recorded in    
          non-interest   
          expense are    
          presented as a 
          reduction in   
          non-interest   
          revenue.       
(2)       Before tax     
          amounts of     
          US$11 million  
          in each of     
          Q4-2019,       
          Q3-2019 and    
          Q4-2018; US$43 
          million for    
          fiscal 2019 and
          US$45 million  
          for fiscal 2018
          are included in
          non-interest   
          expense.       
Adjusted 
results  
in this  
table are
non-GAAP 
amounts  
or       
non-GAAP 
measures.
Please   
refer to 
the      
Non-GAAP 
Measures 
section.  

Q4 2019 vs. Q4 2018

U.S. P&C reported net income was $393 million, an increase of $21 million or 6% and adjusted net income was $404 million, an increase of $21 million or 5% from the prior year. Adjusted net income excludes the amortization of acquisition-related intangible assets. All amounts in the remainder of this section are on a U.S. dollar basis.

Reported net income was $297 million, an increase of $12 million or 4% and adjusted net income was $305 million, an increase of $11 million or 4%, primarily due to higher revenue and lower provisions for credit losses, partially offset by a favourable U.S. tax item in the prior year and higher expenses.

Revenue was $1,028 million, an increase of $40 million or 4% from the prior year, with higher loan and deposit balances, partially offset by a lower net interest margin. Net interest margin of 3.35% decreased 34 basis points, due to loan margin compression, changes in deposit product mix, lower deposit product margins, the impact of loans growing faster than deposits and lower interest recoveries.

Personal revenue increased $10 million or 3%, due to higher loan revenue. Commercial revenue increased $30 million or 5%, primarily due to higher loan balances and deposit revenue, partially offset by loan margin compression.

Total provision for credit losses was $54 million, a decrease of $6 million from the prior year. The provision for credit losses on impaired loans increased $5 million, due to higher consumer provisions. There was a $3 million provision for credit losses on performing loans in the current quarter, compared with a $14 million provision for credit losses on performing loans in the prior year.

Non-interest expense was $598 million and adjusted non-interest expense was $587 million, both reflecting an increase of $4 million or 1% from the prior year, as higher technology and employee-related costs, were largely offset by lower premises costs.

Average gross loans and acceptances of $90.0 billion increased $10.7 billion or 13% from the prior year, driven by growth in commercial loans of 15% and personal loans of 6%. Average deposits of $83.1 billion increased $9.4 billion or 13%, with 18% growth in commercial deposit balances and 9% growth in personal deposit balances.

Q4 2019 vs. Q3 2019

Reported net income and adjusted net income both increased $25 million or 7% from the prior quarter. All amounts in the remainder of this section are on a U.S. dollar basis.

Reported net income and adjusted net income both increased $20 million or 7%, reflecting lower provisions for credit losses and lower expenses.

Revenue was unchanged from the prior quarter, as the impact of lower interest rates offset higher loan and deposit balances and fee income. Net interest margin of 3.35% decreased 11 basis points, due to lower deposit margins.

Personal revenue decreased $11 million or 3%, due to lower deposit revenue. Commercial revenue increased $10 million or 2%, due to higher loan and fee income.

Total provision for credit losses decreased $19 million. The provision for credit losses on impaired loans increased $6 million, due to higher consumer provisions, partially offset by lower commercial provisions. There was a $3 million provision for credit losses on performing loans in the current quarter, compared with a $28 million provision for credit losses on performing loans in the prior quarter.

Non-interest expense and adjusted non-interest expense decreased $8 million or 1%, as higher technology investment and other costs were more than offset by lower premises costs and good expense management discipline.

Average gross loans and acceptances increased $2.5 billion or 3%, with growth in both commercial and personal loans. Average deposits increased $2.6 billion or 3%, with growth in both commercial and personal deposit balances.

Adjusted results in this U.S. P&C section are non-GAAP amounts or non-GAAP measures. Please refer to the Non-GAAP Measures section.

BMO Wealth Management

(Canadian $ in      Q4-2019 Q3-2019 Q4-2018 Fiscal  Fiscal 
millions, except as                         2019    2018   
noted)                                                     
Net interest income 236     237     210     935     826    
Non-interest        1,331   1,876   1,361   6,727   5,475  
revenue (1)                                                
Total revenue (1)   1,567   2,113   1,571   7,662   6,301  
Insurance claims,   335     887     390     2,709   1,352  
commissions and                                            
changes in policy                                          
benefit liabilities                                        
(CCPB)                                                     
Revenue, net of     1,232   1,226   1,181   4,953   4,949  
CCPB                                                       
Provision for       1       -       2       2       6      
(recovery of)                                              
credit losses on                                           
impaired loans                                             
Provision for       (1)     (2)     1       (2)     -      
(recovery of)                                              
credit losses on                                           
performing loans                                           
Total provision for -       (2)     3       -       6      
(recovery of)                                              
credit losses                                              
Non-interest        860     885     882     3,522   3,515  
expense (1)                                                
Income before       372     343     296     1,431   1,428  
income taxes                                               
Provision for       105     94      77      371     356    
income taxes                                               
Reported net income 267     249     219     1,060   1,072  
Amortization of     9       8       10      37      41     
acquisition-related                                        
intangible assets                                          
(2)                                                        
Reinsurance         25      -       -       25      -      
adjustment (3)                                             
Adjusted net income 301     257     229     1,122   1,113  
Traditional Wealth  237     225     192     862     805    
businesses reported                                        
net income                                                 
Traditional Wealth  246     233     202     899     846    
businesses adjusted                                        
net income                                                 
Insurance reported  30      24      27      198     267    
net income                                                 
Insurance adjusted  55      24      27      223     267    
net income                                                 
Net income growth   22.0    (14.3)  25.3    (1.1)   11.0   
(%)                                                        
Adjusted net income 31.3    (14.4)  21.2    0.8     8.0    
growth (%)                                                 
Revenue growth (%)  (0.2)   37.2    (6.8)   21.6    1.3    
Revenue growth, net 4.4     (3.6)   6.1     0.1     5.7    
of CCPB (%)                                                
Adjusted CCPB       310     887     390     2,684   1,352  
Revenue growth, net 6.5     (3.6)   6.1     0.6     5.7    
of adjusted CCPB                                           
(%)                                                        
Non-interest        (2.6)   1.0     4.9     0.2     4.8    
expense growth (%)                                         
Adjusted            (2.4)   1.2     5.6     0.3     5.8    
non-interest                                               
expense growth (%)                                         
Return on equity    16.6    15.3    14.1    16.7    17.8   
(%)                                                        
Adjusted return on  18.7    15.9    14.7    17.7    18.5   
equity (%)                                                 
Operating leverage, 7.0     (4.6)   1.2     (0.1)   0.9    
net of CCPB (%)                                            
Adjusted operating  8.9     (4.8)   0.5     0.3     (0.1)  
leverage, net of                                           
CCPB (%)                                                   
Reported efficiency 54.9    41.9    56.2    46.0    55.8   
ratio (%)                                                  
Reported efficiency 69.8    72.2    74.8    71.1    71.0   
ratio, net of CCPB                                         
(%)                                                        
Adjusted efficiency 54.1    41.3    55.4    45.3    55.0   
ratio (%)                                                  
Adjusted efficiency 67.5    71.2    73.7    69.8    70.0   
ratio, net of CCPB                                         
(%)                                                        
Assets under        471,160 464,711 438,274 471,160 438,274
management                                                 
Assets under        393,576 391,622 382,839 393,576 382,839
administration (4)                                         
Average assets      42,750  41,891  37,510  40,951  35,913 
Average gross loans 24,660  24,068  21,559  23,519  20,290 
and acceptances                                            
Average net loans   24,628  24,036  21,531  23,487  20,260 
and acceptances                                            
Average deposits    38,123  36,190  33,968  36,419  34,251  
(1)       Effective      
          Q1-2019, the   
          bank adopted   
          IFRS 15,       
          Revenue from   
          Contracts with 
          Customers (IFRS
          15) and elected
          to             
          retrospectively
          present prior  
          periods as if  
          IFRS 15 had    
          always been    
          applied. As a  
          result, certain
          out-of-pocket  
          expenses       
          reimbursed to  
          BMO from       
          customers have 
          been           
          reclassified   
          from a         
          reduction in   
          non-interest   
          expense to     
          non-interest   
          revenue.       
(2)       Before tax     
          amounts of $11 
          million in both
          Q4-2019 and    
          Q3-2019, $13   
          million in     
          Q4-2018; $47   
          million in     
          fiscal 2019 and
          $52 million in 
          fiscal 2018 are
          included in    
          non-interest   
          expense.       
(3)       Q4-2019        
          reported net   
          income included
          a reinsurance  
          adjustment of  
          $25 million    
          (pre-tax and   
          after-tax) in  
          CCPB for the   
          net impact of  
          major          
          reinsurance    
          claims from    
          Japanese       
          typhoons that  
          were incurred  
          after our      
          announced      
          decision to    
          wind down our  
          reinsurance    
          business. This 
          reinsurance    
          adjustment is  
          included in    
          CCPB.          
(4)       We have certain
          assets under   
          management that
          are also       
          administered by
          us and are     
          included in    
          assets under   
          administration.
Adjusted 
results  
in this  
table are
non-GAAP 
amounts  
or       
non-GAAP 
measures.
Please   
refer to 
the      
Non-GAAP 
Measures 
section.  

Q4 2019 vs. Q4 2018

BMO Wealth Management reported net income was $267 million, an increase of $48 million or 22% and adjusted net income was $301 million, an increase of $72 million or 31% from the prior year. Adjusted net income in the current quarter excludes the net impact of major reinsurance claims from Japanese typhoons that were incurred after our announced decision to wind down our reinsurance business and the amortization of acquisition-related intangible assets in both the current and prior year. Traditional Wealth reported net income was $237 million, an increase of $45 million or 24% and adjusted net income was $246 million, an increase of $44 million or 22%, due to the impact of a legal provision in the prior yearand higher deposit and loan revenue and higher fee-based revenue. Insurance reported net income was $30 million, an increase of $3 million or 9% and adjusted net income was $55 million, an increase of $28 million, primarily due to benefits from changes in investments to improve asset liability management.

Revenue of $1,567 million was relatively unchanged, compared with the prior year. Revenue, net of reported CCPB, was $1,232 million, an increase of $51 million or 4%. Revenue in Traditional Wealth was $1,155 million, an increase of $53 million or 5%, due to the impact of a legal provision in the prior year, higher deposit and loan, and fee-based revenue. Insurance revenue, net of reported CCPB, was relatively unchanged compared with the prior year and Insurance revenue, net of adjusted CCPB, increased $24 million, due to benefits from changes in investments to improve asset-liability management.

Reported non-interest expense was $860 million, a decrease of $22 million or 3%, and adjusted non-interest expense was $849 million, a decrease of $20 million or 2%, primarily due to below trend expenses in the current quarter and the impact of the legal provision in the prior year.

Assets under management of $471.2 billion increased $32.9 billion or 8% from the prior year, primarily driven by stronger equity markets. Assets under administration of $393.6 billion increased $10.7 billion or 3% from the prior year, primarily driven by stronger equity markets and underlying growth. Average gross loans and average deposits increased 14% and 12%, respectively, as we continue to diversify our product mix.

Q4 2019 vs. Q3 2019

Reported net income increased $18 million or 7%, and adjusted net income increased $44 million or 17% from the prior quarter. Traditional Wealth reported net income increased $12 million or 5%, and adjusted net income increased $13 million or 5% from the prior quarter, primarily due to lower expenses. Insurance reported net income increased $6 million or 27%, and adjusted net income increased $31 million, primarily due to benefits from changes in investments to improve asset-liability management.

Revenue was $1,567 million, compared with $2,113 million in the prior quarter. Revenue, net of CCPB, increased $6 million or 1%. Revenue, net of adjusted CCPB, increased $31 million or 3%. Revenue in Traditional Wealth was relatively unchanged. Insurance revenue, net of CCPB, increased $4 million and Insurance revenue, net of adjusted CCPB, increased $29 million, due to benefits from changes in investments to improve asset-liability management.

Reported and adjusted non-interest expense both decreased $25 million or 3%, primarily due to the benefit of below trend expenses in the current quarter and continued good expense management discipline.

Assets under management increased $6.4 billion or 1% and assets under administration increased $2.0 billion, relatively unchanged from the prior quarter, primarily driven by stronger equity markets. Average gross loans increased 2% and average deposits increased 5% from the prior quarter.

Adjusted results in this BMO Wealth Management section are non-GAAP amounts or non-GAAP measures. Please refer to the Non-GAAP Measures section.

BMO Capital Markets

(Canadian $ in      Q4-2019 Q3-2019 Q4-2018 Fiscal  Fiscal 
millions, except as                         2019    2018   
noted)                                                     
Net interest income 696     538     493     2,394   1,784  
(teb) (1)                                                  
Non-interest        477     662     639     2,340   2,579  
revenue (1)(2)                                             
Total revenue (teb) 1,173   1,200   1,132   4,734   4,363  
(1)(2)                                                     
Provision for       32      7       (3)     52      (17)   
(recovery of)                                              
credit losses on                                           
impaired loans                                             
Provision for       8       3       (4)     28      (1)    
(recovery of)                                              
credit losses on                                           
performing loans                                           
Total provision for 40      10      (7)     80      (18)   
(recovery of)                                              
credit losses                                              
Non-interest        788     794     765     3,261   2,859  
expense (2)                                                
Income before       345     396     374     1,393   1,522  
income taxes                                               
Provision for       76      83      76      307     366    
income taxes (teb)                                         
Reported net income 269     313     298     1,086   1,156  
Acquisition         2       2       9       10      11     
integration costs                                          
(3)                                                        
Amortization of     9       3       2       17      2      
acquisition-related                                        
intangible assets                                          
(4)                                                        
Adjusted net income 280     318     309     1,113   1,169  
Global Markets      688     665     630     2,704   2,541  
revenue (5)                                                
Investment and      485     535     502     2,030   1,822  
Corporate Banking                                          
revenue                                                    
Net income growth   (9.6)   4.0     (5.6)   (6.0)   (9.4)  
(%)                                                        
Adjusted net income (9.4)   5.0     (2.3)   (4.8)   (8.5)  
growth (%)                                                 
Revenue growth (%)  3.6     8.6     1.5     8.5     (4.7)  
Non-interest        3.0     13.3    12.4    14.1    2.6    
expense growth (%)                                         
Adjusted            3.1     12.8    10.5    13.5    2.1    
non-interest                                               
expense growth (%)                                         
Return on equity    9.7     11.3    12.2    9.8     12.8   
(%)                                                        
Adjusted return on  10.1    11.5    12.6    10.1    13.0   
equity (%)                                                 
Operating leverage  0.6     (4.7)   (10.9)  (5.6)   (7.3)  
(teb) (%)                                                  
Adjusted operating  0.5     (4.2)   (9.0)   (5.0)   (6.8)  
leverage (teb) (%)                                         
Efficiency ratio    67.2    66.1    67.6    68.9    65.5   
(teb) (%)                                                  
Adjusted efficiency 66.0    65.6    66.4    68.2    65.1   
ratio (teb) (%)                                            
Average assets      341,745 343,009 317,655 342,347 307,087
Average gross loans 62,752  60,870  47,972  60,034  46,724 
and acceptances                                            
Average net loans   62,642  60,771  47,909  59,946  46,658 
and acceptances                                             
(1)       Effective      
          Q1-2019,       
          certain        
          dividend income
          in our Global  
          Markets        
          business has   
          been           
          reclassified   
          from           
          non-interest   
          revenue to net 
          interest       
          income. Results
          for prior      
          periods and    
          related ratios 
          have been      
          reclassified to
          conform with   
          the current    
          period's       
          presentation.  
(2)       Effective      
          Q1-2019, the   
          bank adopted   
          IFRS 15,       
          Revenue from   
          Contracts with 
          Customers (IFRS
          15) and elected
          to             
          retrospectively
          present prior  
          periods as if  
          IFRS 15 had    
          always been    
          applied. As a  
          result, certain
          out-of-pocket  
          expenses       
          reimbursed to  
          BMO from       
          customers have 
          been           
          reclassified   
          from a         
          reduction in   
          non-interest   
          expense to     
          non-interest   
          revenue.       
(3)       KGS-Alpha      
          acquisition    
          integration    
          costs before   
          tax amounts of 
          $2 million in  
          Q4-2019, $3    
          million in     
          Q3-2019 and $12
          million in     
          Q4-2018; $13   
          million in     
          fiscal 2019 and
          $14 million in 
          fiscal 2018 are
          included in    
          non-interest   
          expense.       
(4)       Before tax     
          amounts of $12 
          million in     
          Q4-2019, $3    
          million in     
          Q3-2019 and $2 
          million in     
          Q4-2018; $22   
          million for    
          fiscal 2019 and
          $3 million for 
          fiscal 2018 are
          included in    
          non-interest   
          expense.       
(5)       Global Markets 
          was previously 
          known as       
          Trading        
          Products.      
Adjusted 
results  
in this  
table are
non-GAAP 
amounts  
or       
non-GAAP 
measures.
Please   
refer to 
the      
Non-GAAP 
Measures 
section.  

Q4 2019 vs. Q4 2018

BMO Capital Markets reported net income was $269 million, compared with $298 million in the prior year, and adjusted net income was $280 million, compared with $309 million in the prior year. Adjusted net income excludes the amortization of acquisition-related intangible assets and acquisition integration costs. Higher revenue was more than offset by higher provisions for credit losses and higher expenses.

Revenue was $1,173 million, an increase of $41 million or 4%. Global Markets revenue increased, driven by higher interest rate trading revenue, primarily due to the impact of the acquisition of KGS-Alpha, higher commodities and foreign exchange trading, partially offset by lower equities trading. Investment and Corporate Banking revenue decreased slightly from the prior year, driven by lower underwriting and advisory revenue, partially offset by higher corporate banking-related revenue.

Total provision for credit losses was $40 million, an increase of $47 million from a $7 million recovery of credit losses in the prior year. The provision for credit losses on impaired loans was $32 million in the current quarter, compared with a $3 million recovery of credit losses on impaired loans in the prior year. There was a $8 million provision for credit losses on performing loans in the current quarter, compared with a $4 million recovery of credit losses on performing loans in the prior year.

Non-interest expense was $788 million, an increase of $23 million or 3% and adjusted non-interest expense was $774 million, an increase of $23 million or 3%, or 2% excluding the impact of the stronger U.S. dollar. The increase was due to higher other operating expenses and the impact of the acquisition of KGS-Alpha, partially offset by lower other employee-related costs.

Q4 2019 vs. Q3 2019

Reported net income was $269 million, compared with $313 million in the prior quarter, and adjusted net income was $280 million, compared with $318 million in the prior quarter.

Revenue decreased $27 million or 2%. Global Markets revenue increased, primarily due to higher interest rate and commodities trading revenue, partially offset by lower equities trading revenue. Investment and Corporate Banking revenue decreased from the prior quarter, primarily due to lower debt underwriting and advisory revenue.

Total provision for credit losses increased $30 million. The provision for credit losses on impaired loans increased $25 million in the current quarter. There was a $8 million provision for credit losses on performing loans in the current quarter, compared with a $3 million provision for credit losses on performing loans in the prior quarter.

Non-interest expense decreased $6 million or 1% and adjusted non-interest expense decreased $14 million or 2%, primarily due to lower employee-related expenses.

Adjusted results in this BMO Capital Markets section are non-GAAP amounts or non-GAAP measures. Please refer to the Non-GAAP Measures section.

Corporate Services

(Canadian $   Q4-2019 Q3-2019 Q4-2018 Fiscal  Fiscal
in millions,                          2019    2018  
except as                                           
noted)                                              
Net interest  (88)    (49)    (52)    (241)   (243) 
income before                                       
group teb                                           
offset                                              
Group teb     (77)    (74)    (67)    (296)   (313) 
offset                                              
Net interest  (165)   (123)   (119)   (537)   (556) 
income (teb)                                        
Non-interest  68      63      77      238     248   
revenue                                             
Total revenue (97)    (60)    (42)    (299)   (308) 
(teb)                                               
Provision for (2)     1       (1)     (7)     (13)  
(recovery of)                                       
credit losses                                       
on impaired                                         
loans                                               
Provision for -       (5)     (2)     (5)     (2)   
(recovery of)                                       
credit losses                                       
on performing                                       
loans                                               
Total         (2)     (4)     (3)     (12)    (15)  
provision for                                       
(recovery of)                                       
credit losses                                       
Non-interest  576     38      (161)   854     425   
expense (1)                                         
Income (loss) (671)   (94)    122     (1,141) (718) 
before income                                       
taxes                                               
Provision for (220)   (73)    (12)    (516)   -     
(recovery of)                                       
income taxes                                        
(teb)                                               
Reported net  (451)   (21)    134     (625)   (718) 
income (loss)                                       
Acquisition   -       -       4       -       14    
integration                                         
costs (1)                                           
Restructuring 357     -       -       357     192   
costs (2)                                           
U.S. net      -       -       -       -       425   
deferred tax                                        
asset                                               
revaluation                                         
(3)                                                 
Benefit from  -       -       (203)   -       (203) 
the                                                 
remeasurement                                       
of an                                               
employee                                            
benefit                                             
liability (4)                                       
Adjusted net  (94)    (21)    (65)    (268)   (290) 
loss                                                
Adjusted      92      38      110     370     422   
non-interest                                        
expense                                              
(1)       Acquisition   
          integration   
          costs related 
          to the        
          acquired BMO  
          Transportation
          Finance       
          business are  
          included in   
          non-interest  
          expense.      
(2)       Q4-2019       
          reported net  
          income        
          included a    
          $357 million  
          after-tax     
          ($484 million 
          pre-tax)      
          restructuring 
          charge,       
          related to    
          severance and 
          a small amount
          of real       
          estate-related
          costs, to     
          continue to   
          improve our   
          efficiency,   
          including     
          accelerating  
          delivery      
          against key   
          bank-wide     
          initiatives   
          focused on    
          digitization, 
          organizational
          redesign and  
          simplification
          of the way we 
          do business,  
          and Q2-2018   
          included a    
          $192 million  
          after-tax     
          ($260 million 
          pre-tax)      
          restructuring 
          charge.       
          Restructuring 
          charges are   
          included in   
          non-interest  
          expense.      
(3)       Q1-2018 net   
          income        
          included a    
          $425 million  
          (US$339       
          million)      
          charge related
          to the        
          revaluation of
          our U.S. net  
          deferred tax  
          asset as a    
          result of the 
          enactment of  
          the U.S. Tax  
          Cuts and Jobs 
          Act. For more 
          information,  
          refer to the  
          Critical      
          Accounting    
          Estimates -   
          Income Taxes  
          and Deferred  
          Tax Assets    
          section on    
          page 119 of   
          BMO's 2018    
          Annual Report.
(4)       Q4-2018 net   
          income        
          included a    
          benefit of    
          $203 million  
          after-tax     
          ($277 million 
          pre-tax) from 
          the           
          remeasurement 
          of an employee
          benefit       
          liability, as 
          a result of an
          amendment to  
          our employee  
          future        
          benefits plan 
          for certain   
          employees.    
          This amount   
          was included  
          in Corporate  
          Services in   
          non-interest  
          expense.      
Adjusted 
results  
in this  
table are
non-GAAP 
amounts  
or       
non-GAAP 
measures.
Please   
refer to 
the      
Non-GAAP 
Measures 
section.  

Corporate Services consists of Corporate Units and Technology and Operations (T&O). Corporate Units provide enterprise-wide expertise, governance and support in a variety of areas, including strategic planning, risk management, finance, legal and regulatory compliance, human resources, communications, marketing, real estate, procurement, data and analytics, and innovation. T&O develops, monitors, manages and maintains governance of information technology, and also provides cyber security and operations services.

The costs of these Corporate Units and T&O services are largely transferred to the three operating groups (Personal and Commercial Banking, BMO Wealth Management and BMO Capital Markets), with any remaining amounts retained in Corporate Services results. As such, Corporate Services results largely reflect the impact of residual treasury-related activities, the elimination of taxable equivalent adjustments, and residual unallocated expenses. Reported results in the current quarter include a restructuring charge and the prior year included a benefit from the remeasurement of an employee benefit liability, as well as certain acquisition integration costs.

Q4 2019 vs. Q4 2018

Corporate Services reported net loss was $451 million, compared with a reported net income of $134 million in the prior year. Adjusted net loss was $94 million, compared with an adjusted net loss of $65 million in the prior year. Adjusted results in the current quarter exclude the restructuring charge. Adjusted results in the prior year exclude the benefit from the remeasurement of an employee benefit liability and acquisition integration costs. Adjusted results decreased, primarily due to below trend revenue excluding taxable equivalent basis (teb) adjustments, partially offset by lower expenses.

Q4 2019 vs. Q3 2019

Reported net loss for the quarter was $451 million, compared with a reported net loss of $21 million in the prior quarter. Adjusted net loss was $94 million compared with $21 million in the prior quarter. Adjusted results exclude the restructuring charge in the current quarter and decreased, primarily due to an increase in expenses from a below trend level recorded in the prior quarter, which included the impact of a gain on the sale of an office building, and below trend revenue excluding teb adjustments.

Adjusted results in this Corporate Services section are non-GAAP amounts or non-GAAP measures. Please refer to the Non-GAAP Measures section.

Risk Management

Our risk management policies and processes to measure, monitor and control credit and counterparty, market, insurance, liquidity and funding, operational, legal and regulatory, business, strategic, environmental and social and reputation risk are outlined in the Enterprise-Wide Risk Management section on pages 68 to 106 of BMO's 2019 Annual Report.

Condensed Consolidated Financial Statements

Consolidated Statement of Income

(Unaudited)      For the   For   
(Canadian $ in   three     the   
millions,        months    twelve
except as        ended     months
noted)                     ended 
                 October   July     October   October   October
                 31,       31,      31,       31,       31,    
                 2019      2019     2018      2019      2018   
Interest,                                                      
Dividend and                                                   
Fee Income                                                     
Loans          $ 5,072   $ 5,120  $ 4,486   $ 19,824  $ 16,275 
Securities       1,415     1,407    1,186     5,541     4,119  
Deposits with    195       187      206       787       641    
banks                                                          
                 6,682     6,714    5,878     26,152    21,035 
Interest                                                       
Expense                                                        
Deposits         2,203     2,224    1,881     8,616     6,080  
Subordinated     71        69       61        279       226    
debt                                                           
Other            1,044     1,204    921       4,369     3,291  
liabilities                                                    
                 3,318     3,497    2,863     13,264    9,597  
Net Interest     3,364     3,217    3,015     12,888    11,438 
Income                                                         
Non-Interest                                                   
Revenue                                                        
Securities       262       259      256       1,023     1,025  
commissions                                                    
and fees                                                       
Deposit and      314       309      290       1,204     1,134  
payment                                                        
service                                                        
charges                                                        
Trading          (21)      115      131       298       705    
revenues                                                       
Lending fees     313       314      266       1,181     997    
Card fees        107       109      111       437       428    
Investment       449       444      441       1,747     1,749  
management and                                                 
custodial fees                                                 
Mutual fund      359       357      359       1,419     1,473  
revenues                                                       
Underwriting     221       260      244       986       943    
and advisory                                                   
fees                                                           
Securities       68        90       83        249       239    
gains, other                                                   
than trading                                                   
Foreign          29        48       42        166       182    
exchange                                                       
gains, other                                                   
than trading                                                   
Insurance        435       989      485       3,183     1,879  
revenue                                                        
Investments in   39        31       38        151       167    
associates and                                                 
joint ventures                                                 
Other            148       124      132       551       546    
                 2,723     3,449    2,878     12,595    11,467 
Total Revenue    6,087     6,666    5,893     25,483    22,905 
Provision for    253       306      175       872       662    
Credit Losses                                                  
Insurance        335       887      390       2,709     1,352  
Claims,                                                        
Commissions                                                    
and Changes in                                                 
Policy Benefit                                                 
Liabilities                                                    
Non-Interest                                                   
Expense                                                        
Employee         2,381     1,960    1,613     8,423     7,461  
compensation                                                   
Premises and     759       734      745       2,988     2,753  
equipment                                                      
Amortization     148       135      125       554       503    
of intangible                                                  
assets                                                         
Travel and       134       142      150       545       519    
business                                                       
development                                                    
Communications   72        72       70        296       282    
Professional     165       141      160       568       572    
fees                                                           
Other            328       307      330       1,256     1,387  
                 3,987     3,491    3,193     14,630    13,477 
Income Before    1,512     1,982    2,135     7,272     7,414  
Provision for                                                  
Income Taxes                                                   
Provision for    318       425      438       1,514     1,961  
income taxes                                                   
Net Income     $ 1,194   $ 1,557  $ 1,697   $ 5,758   $ 5,453  
attributable                                                   
to Equity                                                      
Holders of the                                                 
Bank                                                           
Earnings Per                                                   
Share                                                          
(Canadian $)                                                   
Basic          $ 1.79    $ 2.34   $ 2.58    $ 8.68    $ 8.19   
Diluted          1.78      2.34     2.58      8.66      8.17   
Dividends per    1.03      1.03     0.96      4.06      3.78   
common share                                                    
Certain     
comparative 
figures have
been        
reclassified
to conform  
with the    
current     
period's    
presentation
and for     
changes in  
accounting  
policy.      

Condensed Consolidated Financial Statements

Consolidated Statement of Comprehensive Income

(Unaudited)        For the   For   
(Canadian $ in     three     the   
millions)          months    twelve
                   ended     months
                             ended 
                   October   July     October   October   October
                   31,       31,      31,       31,       31,    
                   2019      2019     2018      2019      2018   
Net Income       $ 1,194   $ 1,557  $ 1,697   $ 5,758   $ 5,453  
Other                                                            
Comprehensive                                                    
Income (Loss),                                                   
net of taxes                                                     
Items that may                                                   
subsequently be                                                  
reclassified to                                                  
net income                                                       
Net change in                                            
unrealized gains                                         
(losses) on fair                                         
value through                                            
OCI securities                                           
Unrealized gains                                                 
(losses) on fair                                                 
value through                                                    
OCI debt                                                         
securities                                                       
arising                                                          
during the         67        112      (49)      412       (251)  
period (1)                                                       
Reclassification   (29)      (14)     (22)      (72)      (65)   
to earnings of                                                   
(gains) in the                                                   
period (2)                                                       
                   38        98       (71)      340       (316)  
Net change in                                                    
unrealized gains                                                 
(losses) on cash                                                 
flow hedges                                                      
Gains (losses)     (36)      290      (309)     1,444     (1,228)
on derivatives                                                   
designated as                                                    
cash flow hedges                                                 
arising during                                                   
the period (3)                                                   
Reclassification                                                 
to earnings of                                                   
losses on                                                        
derivatives                                                      
designated as                                                    
cash flow hedges   21        36       120       143       336    
in the period                                                    
(4)                                                              
                   (15)      326      (189)     1,587     (892)  
Net gains                                                        
(losses) on                                                      
translation of                                                   
net foreign                                                      
operations                                                       
Unrealized gains   35        (577)    303       (11)      417    
(losses) on                                                      
translation of                                                   
net foreign                                                      
operations                                                       
Unrealized gains   (17)      94       (62)      (13)      (155)  
(losses) on                                                      
hedges of net                                                    
foreign                                                          
operations (5)                                                   
                   18        (483)    241       (24)      262    
Items that will                                                  
not be                                                           
reclassified to                                                  
net income                                                       
Gains (losses)                                                   
on remeasurement                                                 
of pension and                                                   
other employee                                                   
future benefit     (169)     (233)    (42)      (552)     261    
plans (6)                                                        
Gains (losses)                                                   
on remeasurement                                                 
of own credit                                                    
risk on                                                          
financial                                                        
liabilities        63        31       (18)      75        (24)   
designed at fair                                                 
value (7)                                                        
Unrealized gains                                                 
on fair value                                                    
through OCI                                                      
equity                                                           
securities                                                       
during the         1         -        -         1         -      
period (8)                                                       
                   (105)     (202)    (60)      (476)     237    
Other              (64)      (261)    (79)      1,427     (709)  
Comprehensive                                                    
Income (Loss),                                                   
net of taxes                                                     
Total            $ 1,130   $ 1,296  $ 1,618   $ 7,185   $ 4,744  
Comprehensive                                                    
Income                                                           
attributable to                                                  
Equity Holders                                                   
of the Bank                                                       
(1)          Net of income
             tax          
             (provision)  
             recovery of  
             $(23)        
             million,     
             $(39)        
             million, $22 
             million for  
             the three    
             months ended,
             and $(140)   
             million, $69 
             million for  
             the twelve   
             months ended,
             respectively.
(2)          Net of income
             tax provision
             of $11       
             million, $5  
             million, $8  
             million for  
             the three    
             months ended,
             and $26      
             million, $23 
             million for  
             the twelve   
             months ended,
             respectively.
(3)          Net of income
             tax          
             (provision)  
             recovery of  
             $15 million, 
             $(106)       
             million, $114
             million for  
             the three    
             months ended,
             and $(521)   
             million, $432
             million for  
             the twelve   
             months ended,
             respectively.
(4)          Net of income
             tax          
             (recovery) of
             $(7) million,
             $(13)        
             million,     
             $(43) million
             for the three
             months ended,
             and $(51)    
             million,     
             $(121)       
             million for  
             the twelve   
             months ended,
             respectively.
(5)          Net of income
             tax          
             (provision)  
             recovery of  
             $6 million,  
             $(35)        
             million, $22 
             million for  
             the three    
             months ended,
             and $4       
             million, $56 
             million for  
             the twelve   
             months ended,
             respectively.
(6)          Net of income
             tax          
             (provision)  
             recovery of  
             $58 million, 
             $83 million, 
             $23 million  
             for the three
             months ended,
             and $196     
             million,     
             $(111)       
             million for  
             the twelve   
             months ended,
             respectively.
(7)          Net of income
             tax          
             (provision)  
             recovery of  
             $(23)        
             million,     
             $(11)        
             million, $7  
             million for  
             the three    
             months ended,
             and $(27)    
             million, $6  
             million for  
             the twelve   
             months ended,
             respectively.
(8)          Net of income
             tax          
             (provision)  
             of $(1)      
             million, $nil
             and $nil for 
             the three    
             months ended,
             and $(1)     
             million, $nil
             for the      
             twelve months
             ended,       
             respectively.
Certain     
comparative 
figures have
been        
reclassified
to conform  
with the    
current     
period's    
presentation
and for     
changes in  
accounting  
policy.      

Condensed Consolidated Financial Statements

Consolidated Balance Sheet

(Unaudited)                As at            
(Canadian $ in                              
millions)                                   
                 October   July      October
                 31,       31,       31,    
                 2019      2019      2018   
Assets                                      
Cash and Cash  $ 48,803  $ 38,938  $ 42,142 
Equivalents                                 
Interest         7,987     6,899     8,305  
Bearing                                     
Deposits with                               
Banks                                       
Securities                                  
Trading          85,903    94,906    99,697 
Fair value       13,704    13,548    11,611 
through profit                              
or loss                                     
Fair value       64,515    67,434    62,440 
through other                               
comprehensive                               
income                                      
Debt             24,472    15,024    6,485  
securities at                               
amortized cost                              
Other            844       813       702    
                 189,438   191,725   180,935
Securities       104,004   106,612   85,051 
Borrowed or                                 
Purchased                                   
Under Resale                                
Agreements                                  
Loans                                       
Residential      123,740   122,054   119,620
mortgages                                   
Consumer         67,736    65,989    63,225 
instalment and                              
other personal                              
Credit cards     8,859     8,749     8,329  
Business and     227,609   222,857   194,456
government                                  
                 427,944   419,649   385,630
Allowance for    (1,850)   (1,802)   (1,639)
credit losses                               
                 426,094   417,847   383,991
Other Assets                                
Derivative       22,144    22,200    25,422 
instruments                                 
Customers?       23,593    24,741    18,585 
liability                                   
under                                       
acceptances                                 
Premises and     2,055     1,989     1,986  
equipment                                   
Goodwill         6,340     6,329     6,373  
Intangible       2,424     2,319     2,272  
assets                                      
Current tax      1,165     1,257     1,515  
assets                                      
Deferred tax     1,568     1,662     2,039  
assets                                      
Other            16,580    16,662    14,677 
                 75,869    77,159    72,869 
Total Assets   $ 852,195 $ 839,180 $ 773,293
Liabilities                                 
and Equity                                  
Deposits       $ 568,143 $ 553,383 $ 520,928
Other                                       
Liabilities                                 
Derivative       23,598    23,613    23,629 
instruments                                 
Acceptances      23,593    24,741    18,585 
Securities       26,253    27,375    28,804 
sold but not                                
yet purchased                               
Securities       86,656    89,829    66,684 
lent or sold                                
under                                       
repurchase                                  
agreements                                  
Securitization   27,159    25,544    25,051 
and structured                              
entities'                                   
liabilities                                 
Current tax      55        32        50     
liabilities                                 
Deferred tax     60        74        74     
liabilities                                 
Other            38,607    37,070    36,985 
                 225,981   228,278   199,862
Subordinated     6,995     6,876     6,782  
Debt                                        
Equity                                      
Preferred        5,348     5,348     4,340  
shares and                                  
other equity                                
instruments                                 
Common shares    12,971    12,958    12,929 
Contributed      303       303       300    
surplus                                     
Retained         28,725    28,241    25,850 
earnings                                    
Accumulated      3,729     3,793     2,302  
other                                       
comprehensive                               
income                                      
Total Equity     51,076    50,643    45,721 
Total          $ 852,195 $ 839,180 $ 773,293
Liabilities                                 
and Equity                                   
Certain     
comparative 
figures have
been        
reclassified
to conform  
with the    
current     
period's    
presentation
and for     
changes in  
accounting  
policy.      

Condensed Consolidated Financial Statements

Consolidated Statement of Changes in Equity

(Unaudited)         For the      For the
(Canadian $ in      three        twelve 
millions)           months       months 
                    ended        ended  
                    October      October    October      October
                    31,          31,        31,          31,    
                    2019         2018       2019         2018   
Preferred Shares                                                
and Other Equity                                                
Instruments                                                     
Balance at       $  5,348   $    4,240   $  4,340   $    4,240  
beginning of                                                    
period                                                          
Issued during       -            400        1,008        400    
the period                                                      
Redeemed during     -            (300)      -            (300)  
the period                                                      
Balance at End      5,348        4,340      5,348        4,340  
of Period                                                       
Common Shares                                                   
Balance at          12,958       12,924     12,929       13,032 
beginning of                                                    
period                                                          
Issued under the    13           26         62           99     
Stock Option                                                    
Plan                                                            
Repurchased for     -            (21)       (20)         (202)  
cancellation                                                    
Balance at End      12,971       12,929     12,971       12,929 
of Period                                                       
Contributed                                                     
Surplus                                                         
Balance at          303          302        300          307    
beginning of                                                    
period                                                          
Stock option        (1)          (2)        -            (12)   
expense, net of                                                 
options                                                         
exercised                                                       
Other               1            -          3            5      
Balance at End      303          300        303          300    
of Period                                                       
Retained                                                        
Earnings                                                        
Balance at          28,241       24,901     25,850       23,700 
beginning of                                                    
period                                                          
Impact from         -            -          -            99     
adopting IFRS 9                                                 
Net income          1,194        1,697      5,758        5,453  
attributable to                                                 
equity holders                                                  
of the bank                                                     
Dividends   -       (52)         (43)       (211)        (184)  
Preferred shares                                                
- Common            (658)        (614)      (2,594)      (2,424)
shares                                                          
Equity issue        -            (5)        (8)          (5)    
expense                                                         
Common shares       -            (86)       (70)         (789)  
repurchased for                                                 
cancellation                                                    
Balance at End      28,725       25,850     28,725       25,850 
of Period                                                       
Accumulated                                             
Other                                                   
Comprehensive                                           
Income (Loss) on                                        
Fair Value                                              
through OCI                                             
Securities, net                                         
of taxes                                                
Balance at          (13)         (244)      (315)        56     
beginning of                                                    
period                                                          
Impact from         -            -          -            (55)   
adopting IFRS 9                                                 
Unrealized gains    67           (49)       412          (251)  
(losses) on fair                                                
value through                                                   
OCI debt                                                        
securities                                                      
arising during                                                  
the period                                                      
Unrealized gains    1            -          1            -      
on fair value                                                   
through OCI                                                     
equity                                                          
securities                                                      
arising during                                                  
the period                                                      
Reclassification    (29)         (22)       (72)         (65)   
to earnings of                                                  
(gains) on fair                                                 
value through                                                   
OCI debt                                                        
securities                                                      
during the                                                      
period                                                          
Balance at End      26           (315)      26           (315)  
of Period                                                       
Accumulated                                                     
Other                                                           
Comprehensive                                                   
Income (Loss) on                                                
Cash Flow                                                       
Hedges, net of                                                  
taxes                                                           
Balance at          528          (885)      (1,074)      (182)  
beginning of                                                    
period                                                          
Gains (losses)      (36)         (309)      1,444        (1,228)
on derivatives                                                  
designated as                                                   
cash flow hedges                                                
arising during                                                  
the period                                                      
Reclassification    21           120        143          336    
to earnings of                                                  
losses on                                                       
derivatives                                                     
designated as                                                   
cash flow hedges                                                
in the period                                                   
Balance at End      513          (1,074)    513          (1,074)
of Period                                                       
Accumulated                                                     
Other                                                           
Comprehensive                                                   
Income on                                                       
Translation                                                     
of Net Foreign                                                  
Operations, net                                                 
of taxes                                                        
Balance at          3,685        3,486      3,727        3,465  
beginning of                                                    
period                                                          
Unrealized gains    35           303        (11)         417    
(losses) on                                                     
translation of                                                  
net foreign                                                     
operations                                                      
Unrealized          (17)         (62)       (13)         (155)  
(losses) on                                                     
hedges of net                                                   
foreign                                                         
operations                                                      
Balance at End      3,703        3,727      3,703        3,727  
of Period                                                       
Accumulated                                                     
Other                                                           
Comprehensive                                                   
Income (Loss) on                                                
Pension and                                                     
Other Employee                                                  
Future Benefit                                                  
Plans, net of                                                   
taxes                                                           
Balance at          (214)        211        169          (92)   
beginning of                                                    
period                                                          
Gains (losses)      (169)        (42)       (552)        261    
on remeasurement                                                
of pension and                                                  
other employee                                                  
future benefit                                                  
plans                                                           
Balance at End      (383)        169        (383)        169    
of Period                                                       
Accumulated                                                     
Other                                                           
Comprehensive                                                   
(Loss) on Own                                                   
Credit Risk on                                                  
Financial                                                       
Liabilities                                                     
Designated at                                                   
Fair Value, net                                                 
of taxes                                                        
Balance at          (193)        (187)      (205)        (181)  
beginning of                                                    
period                                                          
Gains (losses)   63         (18)         75         (24)
on remeasurement                                        
of own credit                                           
risk on                                                 
financial                                               
liabilities                                             
designated at                                           
fair value                                              
Balance at End      (130)        (205)      (130)        (205)  
of Period                                                       
Total               3,729        2,302      3,729        2,302  
Accumulated                                                     
Other                                                           
Comprehensive                                                   
Income                                                          
Total Equity     $  51,076  $    45,721  $  51,076  $    45,721  
Certain     
comparative 
figures have
been        
reclassified
to conform  
with the    
current     
period's    
presentation
and for     
changes in  
accounting  
policy.      

INVESTOR AND MEDIA PRESENTATION

Investor Presentation Materials

Interested parties are invited to visit our website at www.bmo.com/investorrelations to review our 2019 annual MD&A and audited annual consolidated financial statements, quarterly presentation materials and supplementary financial information package.

Quarterly Conference Call and Webcast Presentations

Interested parties are also invited to listen to our quarterly conference call on Tuesday, December 3, 2019, at 8:00 a.m. (ET). The call may be accessed by telephone at 416-641-2144 (from within Toronto) or 1-888-789-9572 (toll-free outside Toronto), entering Passcode: 7865067#. A replay of the conference call can be accessed until Monday, February 24, 2020, by calling 905-694-9451 (from within Toronto) or 1-800-408-3053 (toll-free outside Toronto) and entering Passcode: 2812262#.

A live webcast of the call can be accessed on our website at www.bmo.com/investorrelations. A replay can also be accessed on the site.

Shareholder Dividend      For other shareholder        
Reinvestment and Share    information, including the   
Purchase Plan (the Plan)  notice for our normal course 
Average market price as   issuer bid, please           
defined under the         contactBank of Montreal      
PlanAugust 2019:          Shareholder ServicesCorporate
$93.12September 2019:     Secretary's DepartmentOne    
$96.93October 2019:       First Canadian Place, 21st   
$98.58  For dividend      FloorToronto, Ontario M5X    
information, change in    1A1Telephone: (416)          
shareholder address or to 867-6785Fax: (416)           
advise of duplicate       867-6793E-mail:              
mailings, please contact  corp.secretary@bmo.com For   
Computershare Trust       further information on this  
Company of Canada100      document, please contactBank 
University Avenue, 8th    of MontrealInvestor Relations
FloorToronto, Ontario M5J DepartmentP.O. Box 1, One    
2Y1Telephone:             First Canadian Place, 10th   
1-800-340-5021 (Canada    FloorToronto, Ontario M5X 1A1
and the United            To review financial results  
States)Telephone: (514)   and regulatory filings and   
982-7800                  disclosures online, please   
(international)Fax:       visit our website at         
1-888-453-0330 (Canada    www.bmo.com/investorrelations
and the United            .                            
States)Fax: (416)                                      
263-9394                                               
(international)E-mail:                                 
service@computershare.com                            

Our 2019 Annual MD&A, audited annual consolidated financial statements and annual report on Form 40-F (filed with the U.S. Securities and Exchange Commission) are available online at www.bmo.com/investorrelations and at www.sedar.com. Printed copies of the bank's complete 2019 audited financial statements are available free of charge upon request at 416-867-6785 or corp.secretary@bmo.com.

Annual      
Meeting 2020
The next    
Annual      
Meeting of  
Shareholders
will be held
on Tuesday, 
March 31,   
2020, in    
Toronto,    
Ontario.     

® Registered trademark of Bank of Montreal

Media Relations Contacts: Paul Gammal, Toronto, paul.gammal@bmo.com, 416-867-6543; Investor Relations Contacts: Jill Homenuk, Head, Investor Relations, jill.homenuk@bmo.com, 416-867-4770; Tom Little, Director, Investor Relations, tom.little@bmo.com, 416-867-7834

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