An anonymous director reports

BMO FINANCIAL GROUP RELEASES SUPPLEMENTARY FINANCIAL INFORMATION REFLECTING CHANGES IN PRESENTATION

BMO Financial Group has released an abridged supplementary financial information package containing certain quarterly and annual financial information for fiscal 2023 and 2022 that reflect changes in presentation that were adopted as of Nov. 1, 2023, including those related to changes in International Financial Reporting Standard 17, Insurance Contracts (IFRS 17) which replaces existing IFRS 4, Insurance Contracts (IFRS 4).

As disclosed in BMO's 2023 consolidated financial statements, upon transition to IFRS 17, BMO Financial applied the full retrospective approach to its creditor business and the fair value approach to all other products written prior to Nov. 1, 2022. In addition, it voluntarily changed its accounting policy for the measurement of investment properties under IAS 40 Investment Property, recorded in insurance-related assets in other assets in its consolidated balance sheet, from cost to fair value and applied the change retrospectively. Fiscal 2023 periods and opening retained earnings as at Nov. 1, 2022, have been restated for these changes. The expected impact of these combined changes is a reduction in opening retained earnings as at Nov. 1, 2022, of $974-million after-tax. Fiscal 2023 restated results may not be fully representative of the future earnings profile, as BMO Financial was not managing its insurance portfolios under the new standards.

In addition, it has reflected the following reclassifications, which do not impact the bank's fiscal 2022 and 2023 reported and adjusted net income:

Effective the first quarter of 2024, BMO Financial voluntarily changed its accounting policy for securities transactions from settlement date to trade date. This change was applied retrospectively, as if it always recorded securities transactions on trade date. As a result, certain prior period balances and ratios have been reclassified to conform with the current period's methodology.

Certain changes related to the realignment of business units and changes in group allocations effective the first quarter of 2024 have also been reflected. BMO Financial has included the reclassification of balances and the associated revenue, expenses and provision for credit losses related to its Canadian and U.S. indirect retail auto financing business, previously reported in personal and commercial banking, to corporate services, reflecting the exit and wind-down of this business unit. BMO Financial has also reflected the allocation of certain items from corporate services to the operating groups. Prior period results and ratios have been reclassified to conform with the current period's presentation.

The prequarter-end release of this abridged package has been provided to help readers of the bank's financial information better understand how these changes will be reported. The supplementary financial information package for the first quarter of 2024 may reflect further refinements.

BMO Financial Group reports first quarter earnings on Feb. 27, 2024.

About BMO Financial Group

BMO Financial Group is the eighth-largest bank in North America by assets, with total assets of $1.3-trillion as of Oct. 31, 2023. Serving customers for 200 years and counting, BMO is a diverse team of highly engaged employees providing a broad range of personal and commercial banking, wealth management, global markets and investment banking products and services to over 13 million customers across Canada, the United States and in select markets globally. Driven by a single purpose, to boldly grow the good in business and life, BMO is committed to driving positive change in the world, and making progress for a thriving economy, sustainable future and inclusive society.

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