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Business
Winnipeg Free Press - PRINT EDITION
Bright future here: BMO CEO
By: Martin Cash
23/03/2010 1:00 AM |
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BMO CEO Bill Downe believes the bank can grow its market share by being more attentive to its customers' needs. (PHIL.HOSSACK@FREEPRESS.MB.CA )
THE current rebalancing of the global economy is an opportunity for Canadian businesses to take a larger share of North American and world markets.
And Bill Downe, CEO of the Bank of Montreal, said that in this post-recession era, Canadian banks are well positioned to make positive moves -- for themselves and their customers.
Downe, along with the bank's board of directors and senior management team, is in Winnipeg this week for BMO's annual general meeting Tuesday at the Fairmont Winnipeg.
With Canadian banks emerging from the economic crisis in better shape than many other global financial institutions -- BMO recently posted first-quarter earnings that were almost triple last year's results -- Downe said he believes the current dynamic allows BMO to grow its market share.
He said the global credit crisis arose because consumption was overly dependent on debt and the world "got a little bit in front of its skies." What that is going to require is a "fundamental change" in the way time and energy are spent growing Canadian businesses and BMO's own business.
"(In Canada) we need to reinvest in our business systems and our factories, in our sales and distribution models and use the capital strengths we have in the country to gain a bigger share of the North American market," he said. "The next couple of decades presents a terrific opportunity for us to grow (as a country) and for us to grow as a bank."
BMO, the fourth-largest -- and the oldest -- bank in the country, is in the midst of its own rejuvenation after some failed merger attempts early this decade and its share of debt-related writedowns.
Downe has put his stamp on BMO's current institutional theme -- "making money makes sense."
Downe said he and the bank's senior management believe the way BMO can grow its market share is by being more attentive to its customers' needs. But there are no stated competitive goals or benchmarks to achieve with that kind of marketing emphasis -- and for good reasons.
He said he recently read about some Toyota officials reflecting on their current setback and some related it back to a period between 2002 and 2004 when the emphasis at the company went from making better cars and serving their customers better to passing General Motors to become the world's largest car manufacturer.
"One had intrinsic value," he said. "The other had ego value."
That attitude may explain why Downe seemed more keen to talk about a new five-year mortgage offering at a fixed rate of 3.75 per cent than to crow about the bank's recent earnings results.
In 2009, BMO made about $2.7-billion worth of capital available to about 5,000 business customers in Manitoba.
"When I think about our aspirations, our growth will break down to our ability to serve 5,000, then 6,000 businesses in Manitoba," he said. "I can trace our growth in net earnings back to the focus on serving our customers."
martin.cash@freepress.mb.ca
BMO and Manitoba
-- The Bank of Montreal set up its first branch in Manitoba in 1877. It now has 22 branches and 400 employees. Its most recent Special Report on Manitoba says it's bullish about the provincial economy:
-- Non-residential construction -- With the floodway and some other construction projects winding down, the double-digit growth of the last four years is expected to become a 1.5 per cent decline in 2010.
-- Agriculture -- Excellent long-term growth potential.
-- Mining -- Not that large relative to the country as a whole, but has strong long-term growth prospects.
-- Population growth -- Running ahead of the national rate for the first time since the early '80s.
-- Bottom line -- Manitoba may not have attracted the attention of the other western provinces, but its well-diversified economy and solid growth prospects deserve attention in a challenging environment.
Republished from the Winnipeg Free Press print edition March 23, 2010 B5