falseFY0000927971These amounts are either supported by insured mortgages or issued by U.S. agencies and government-sponsored enterprises. NHA refers to the National Housing Act, MBS refers to mortgage-backed securities and CMO refers to collateralized mortgage obligations.Includes deposits with the Bank of Canada, the U.S. Federal Reserve and other central banks.Includes interest income on securities measured at fair value through other comprehensive income (FVOCI) and amortized cost, calculated using the effective interest rate method, of $6,027 million for the year ended October 31, 2023 ($1,945 million in 2022).The carrying values of securities that are part of fair value hedging relationships are adjusted for related gains (losses) on hedge contracts.Relates to the defined benefit plan included in our acquisition of Bank of the West in fiscal 2023. Refer to Note 10 for further information. The low and high input values represent the lowest and highest actual level of inputs used to value a group of financial instruments in a particular product category. These value ranges do not reflect the level of input uncertainty but are affected by the specific underlying instruments within each product category. The value ranges will therefore vary from period to period based on the characteristics of the underlying instruments held at each balance sheet date. Range of input values represents price per security adjustment (Canadian $). Includes the tax impact of the interest rate swaps and securities we purchased to mitigate the impact of changes in interest rates on our acquisition of Bank of the West (refer to Note 10 for additional details) and the tax impact of the legal provision recorded in relation to the lawsuit described in Note 24.Includes on-balance sheet securities borrowed or purchased under resale agreements and off-balance sheet collateral received.Includes NHA MBS of $0 million, which are included in loans in our Consolidated Balance Sheet ($5,277 million as at October 31, 2022).Includes off-balance sheet securities borrowing and lending.Financial assets received/pledged as collateral are disclosed at fair value and are limited to the net balance sheet exposure (i.e. any over-collateralization is excluded from the table). Certain amounts of collateral are restricted from being sold or repledged except in the event of default or the occurrence of other predetermined events. Trending to 4.00% in 2041 and remaining at that level thereafter.Trending to 4.03% in 2040 and remaining at that level thereafter.FVTPL securities include $969 million of Federal Home Loan Bank and Federal Reserve Bank equity and $587 million of investments in Low Income Housing Tax Credit entities, acquired as a result of our acquisition of Bank of the West. Foreign exchange translation on assets and liabilities held by foreign operations is included in other comprehensive income, net foreign operations. Changes in unrealized gains (losses) on trading and FVTPL securities still held on October 31, 2023 and 2022 are included in earnings for the year. Not intended to represent our actual exposure to credit risk. Securities held that are issued by our Canadian and U.S. customer securitization vehicles are comprised of asset-backed commercial paper (ABCP) and are classified as either trading securities, FVTPL securities or FVOCI securities.Gold contracts are included in foreign exchange contracts.Replacement cost and credit risk equivalent are presented after the impact of master netting agreements and calculated using the Standardized Approach for Counterparty Credit Risk (SA-CCR) in accordance with the CAR Guideline issued by OSFI. The table therefore excludes loan commitment derivatives.Under the SA-CCR, excludes loan commitment derivatives.Includes the fair value of bond futures rounded down to $0 million as at October 31, 2023 ($nil million as at October 31, 2022).Represents the unrealized gains (losses) within derivative instruments in assets and liabilities, respectively, in the Consolidated Balance Sheet.Represents the carrying value in our Consolidated Balance Sheet and includes amortized cost, before ACL, plus fair value hedge adjustments, except for FVOCI securities that are carried at fair value.Includes impairment charges.Includes the fair value of bond futures in fair value hedges rounded down to $0 million as at October 31, 2023 ($nil million as at October 31, 2022).Tax balance related to cash flow hedges accumulated other comprehensive income was $2,029 million as at October 31, 2023 ($1,819 million as at October 31, 2022).Tax balance related to net investment hedges accumulated other comprehensive income was $555 million as at October 31, 2023 ($466 million as at October 31, 2022).Represents unrealized gains (losses) recorded as part of the derivative instruments in assets and liabilities, respectively, in our Consolidated Balance Sheet.Represents life to date amounts.Includes fully depreciated assets written off and assets sold as part of divestitures during the year. Refer to Note 10.On closing our acquisition of Bank of the West on February 1, 2023, we settled the foreign exchange forward contracts entered to mitigate foreign exchange risk of the purchase price of Bank of the West and reclassified gain of $269 million to goodwill. Refer to Note 10 for further details.Includes derivatives entered into in relation to our acquisition of Bank of the West and its subsidiaries, which were settled upon close of the transaction. Refer to Note 10 for further details.Includes derivatives entered into in relation to our acquisition of Bank of the West and its subsidiaries, which were settled upon completion of the transaction. Refer to Note 10 for further details.Includes customers’ liability under acceptances.Amounts included in share-based payments are the fair values of awards granted in the year.Includes the fair value of bond futures rounded down to $nil million as at October 31, 2023 ($nil million as at October 31, 2022).Maximum exposure to loss represents securities held, undrawn liquidity facilities, any remaining unfunded committed amounts to the BMO funded vehicle, derivative assets and other assets.The fair values of hedging derivatives wholly or partially offset the changes in fair values of the related on-balance sheet financial instruments.Other assets include precious metals, segregated fund assets in our insurance business, carbon credits, certain receivables and other items measured at fair value. Includes the tax impact of deferred revenue and purchase accounting adjustments in connection with our acquisition of Bank of the West.Relates to the defined benefit plan included in the sale of our EMEA Asset Management business in fiscal 2022. Refer to Note 10 for further information. This represents certain embedded options related to structured deposits carried at amortized cost. Other liabilities include investment contract liabilities and segregated fund liabilities in our insurance business, certain payables and metals deposit that have been designated at FVTPL, as well as certain securitization and structured entities’ liabilities measured at FVTPL. This represents the structured note liabilities included in deposits that have been designated at FVTPL. The other employee future benefit plans current service cost was calculated using a separate discount rate of 5.5% and 3.6% for 2023 and 2022, respectively. The pension benefit current service cost was calculated using a separate discount rate of 5.4% and 3.7% for 2023 and 2022, respectively. Includes the tax impact of interest rate swaps and securities we purchased to mitigate the impact of changes in interest rates in our acquisition of Bank of the West (refer to Note 10 for additional details) and the tax impact of leasing assets. 0000927971 bmo:StageTwoMember bmo:CreditCardLoansMember ifrs-full:GrossCarryingAmountMember bmo:VeryLowProbabilityOfDefaultMember 2023-10-31 0000927971 ifrs-full:MarketRiskMember ifrs-full:TopOfRangeMember 2023-10-31 0000927971 bmo:WealthManagementMember 2021-10-31
U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form
40-F
[Check one]
☐ | Registration statement pursuant to Section 12 of the Securities Exchange Act of 1934 |
or
☒ | Annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 |
For the fiscal year ended October 31, 2023 | Commission File Number 001-13354 |
BANK OF MONTREAL
(Exact name of Registrant as specified in its charter)
Not Applicable
(Translation of Registrant’s name into English (if applicable))
Canada
(Province or other jurisdiction of incorporation or organization)
6029
(Primary Standard Industrial Classification Code Number (if applicable))
13-4941092
(I.R.S. Employer Identification Number (if applicable))
100 King Street West, 1 First Canadian Place, Toronto, Ontario, Canada M5X 1A1
(416-867-6785)
(Address and telephone number of Registrant’s principal executive offices)
Colleen Hennessy, Bank of Montreal, 115 S. LaSalle Street, Floor 18W, Chicago, Illinois
60603
(312-497-6153)
(Name, address (including zip code) and telephone number (including area code)
of agent for service in the United States)
Securities registered or to be registered pursuant to Section 12(b) of the Act:
Title Of Each Class | Trading Symbol | Name Of Each Exchange On Which Registered | ||
Common Shares | BMO | New York Stock Exchange |
Securities registered or to be registered pursuant to Section 12(g) of the Act:
Not Applicable
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
Not Applicable
For annual reports, indicate by check mark the information filed with this Form:
☒ Annual information form ☒ Audited annual financial statements
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.
Common Shares | 720,982,672 | |||
Class B Preferred Shares Series 27 (Non-Viability Contingent Capital (NVCC)) | 20,000,000 | |||
Class B Preferred Shares Series 29 (Non-Viability Contingent Capital (NVCC)) | 16,000,000 | |||
Class B Preferred Shares Series 31 (Non-Viability Contingent Capital (NVCC)) | 12,000,000 | |||
Class B Preferred Shares Series 33 (Non-Viability Contingent Capital (NVCC)) | 8,000,000 | |||
Class B Preferred Shares Series 44 (Non-Viability Contingent Capital (NVCC)) | 16,000,000 | |||
Class B Preferred Shares Series 46 (Non-Viability Contingent Capital (NVCC)) | 14,000,000 | |||
Class B Preferred Shares Series 48 (Non-Viability Contingent Capital (NVCC)) | 1,250,000 | |||
Class B Preferred Shares Series 49 (Non-Viability Contingent Capital (NVCC)) | 750,000 | |||
Class B Preferred Shares Series 50 (Non-Viability Contingent Capital (NVCC)) | 500,000 | |||
Class B Preferred Shares Series 51 (Non-Viability Contingent Capital (NVCC)) | 1,000,000 | |||
Class B Preferred Shares Series 52 (Non-Viability Contingent Capital (NVCC)) 1 | 650,000 |
1
On January 31, 2023, the Bank issued Cdn$650 million of Non-Cumulative 5-Year Fixed Rate Reset Class B Preferred Shares Series 52 (Non-Viability Contingent Capital (NVCC)).Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.
Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of
Regulation S-T
(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).Yes ☒ No ☐
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule
12b-2
of the Exchange Act.Emerging growth company ☐
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐
† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
Yes ☒ No ☐
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Auditor Name: KPMG LLP
Auditor Location: Toronto, Ontario, Canada
Auditor PCAOB ID Number: 85
TABLE OF CONTENTS
DISCLOSURE CONTROLS AND PROCEDURES | ||
INTERNAL CONTROL OVER FINANCIAL REPORTING | ||
AUDIT AND CONDUCT REVIEW COMMITTEE FINANCIAL EXPERT | ||
CODE OF ETHICS | ||
PRINCIPAL ACCOUNTANT FEES AND SERVICES | ||
OFF-BALANCE SHEET ARRANGEMENTS | ||
CONTRACTUAL AND OTHER OBLIGATIONS | ||
IDENTIFICATION OF THE AUDIT AND CONDUCT REVIEW COMMITTEE | ||
SUMMARY OF SIGNIFICANT CORPORATE GOVERNANCE DIFFERENCES | ||
UNDERTAKING | ||
SIGNATURES | ||
EXHIBIT INDEX | ||
Bank of Montreal Clawback and Recoupment Policy | ||
Annual Information Form | ||
Management’s Discussion and Analysis for the Fiscal Year Ended October 31, 2023 | ||
Consolidated Financial Statements for the Fiscal Year Ended October 31, 2023 | ||
Consent of Independent Registered Public Accounting Firm dated December 1, 2023 | ||
Section 302 Certifications of Chief Executive Officer | ||
Section 302 Certifications of Chief Financial Officer | ||
Section 906 Certifications | ||
Code of Conduct | ||
Inline Interactive Data File | ||
Cover Page Interactive Data File |
1
DISCLOSURE CONTROLS AND PROCEDURES
The information provided under the heading “Management’s Annual Report on Disclosure Controls and Procedures and Internal Control over Financial Reporting — Disclosure Controls and Procedures” (page 125) contained in the Bank’s Management’s Discussion and Analysis for the fiscal year ended October 31, 2023 (“2023 MD&A”), filed as Exhibit 99.2 to this annual report on
Form 40-F,
is incorporated by reference herein.INTERNAL CONTROL OVER FINANCIAL REPORTING
a. Management’s annual report on internal control over financial reporting
The information provided under the heading “Management’s Annual Report on Disclosure Controls and Procedures and Internal Control over Financial Reporting — Internal Control over Financial Reporting” (page 125) contained in the 2023 MD&A, filed as Exhibit 99.2 to this annual report on
Form 40-F,
is incorporated by reference herein.b. Auditor’s attestation report on internal control over financial reporting
The Bank’s shareholders’ auditors, KPMG LLP, have issued an audit report on our internal control over financial reporting. This audit report appears on page 144 of the Bank’s Consolidated Financial Statements for the fiscal year ended October 31, 2023, filed as Exhibit 99.3 to this annual report on
Form 40-F
and is incorporated by reference herein.c. Changes in internal control over financial reporting
The information provided under the heading “Management’s Annual Report on Disclosure Controls and Procedures and Internal Control over Financial Reporting — Changes in Internal Control over Financial Reporting” (page 125) contained in the 2023 MD&A, filed as Exhibit 99.2 to this annual report on
Form 40-F,
is incorporated by reference herein.AUDIT AND CONDUCT REVIEW COMMITTEE FINANCIAL EXPERT
The information provided under the heading “Audit and Conduct Review Committee Information — Composition of the Audit and Conduct Review Committee” (page 17) identifying the Bank’s Audit and Conduct Review Committee Financial Experts, and confirming the independence of the Audit and Conduct Review Committee Financial Experts, as set forth in the Bank’s Annual Information Form (dated December 1, 2023), filed as Exhibit 99.1 to this annual report on
Form 40-F,
is incorporated by reference herein.CODE OF ETHICS
The Bank’s Code of Conduct (“Code”) is its code of business conduct and ethics, which is applicable to every director and employee of the Bank. The Code is available on the Bank’s website
www.bmo.com/main/about-bmo
under “Learn more about us” and is available in print without charge to any shareholder upon request. Unless and to the extent specifically referred to herein, the information on the Bank’s website shall not be deemed to be incorporated by reference in this annual report on Form 40-F.PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information provided under the heading “Shareholders’ Auditors’ Services and Fees — Shareholders’ Auditors’ Fees” and “—
Pre-Approval
Policies and Procedures” (page 124) contained in the 2023 MD&A, filed as Exhibit 99.2 to this annual report onForm 40-F,
is incorporated by reference herein.OFF-BALANCE
SHEET ARRANGEMENTSThe information provided under the heading “Financial Condition Review –
Off-Balance
Sheet Arrangements” (pages 76 and 77) contained in the 2023 MD&A, filed as Exhibit 99.2 to this annual report onForm 40-F,
is incorporated by reference herein.2
CONTRACTUAL AND OTHER OBLIGATIONS
The information provided under the heading “Enterprise-Wide Risk Management – Liquidity and Funding Risk – Contractual Maturities of Assets and Liabilities and
Off-Balance
Sheet Commitments” (pages 107 and 108) contained in the 2023 MD&A, filed as Exhibit 99.2 to this annual report onForm 40-F,
is incorporated by reference herein.IDENTIFICATION OF THE AUDIT AND CONDUCT REVIEW COMMITTEE
The information provided under the heading “Audit and Conduct Review Committee Information — Composition of the Audit and Conduct Review Committee” (page 17) identifying the Bank’s Audit and Conduct Review Committee and confirming the independence of the Audit and Conduct Review Committee as set forth in the Bank’s Annual Information Form (dated December 1, 2023), filed as Exhibit 99.1 to this annual report on
Form 40-F,
is incorporated by reference herein.SUMMARY OF SIGNIFICANT CORPORATE GOVERNANCE DIFFERENCES
A summary of significant ways corporate governance practices followed by the Bank differ from corporate governance practices required to be followed by U.S. domestic companies under The New York Stock Exchange’s listing standards (disclosure required by Section 303A.11 of the NYSE Listed Company Manual) is available on the Bank’s website at
www.bmo.com
.UNDERTAKING
Registrant undertakes to make available, in person or by telephone, representatives to respond to inquiries made by the Commission staff, and to furnish promptly, when requested to do so by the Commission staff, information relating to the securities in relation to which the obligation to file an annual report on
Form 40-F
arises or transactions in said securities.3
SIGNATURES
Pursuant to the requirements of the Exchange Act, the Registrant certifies that it meets all of the requirements for filing on
Form 40-F
and has duly caused this annual report to be signed on its behalf by the undersigned, thereto duly authorized.Registrant: BANK OF MONTREAL
By: | /s/ Tayfun Tuzun | |
Tayfun Tuzun | ||
Chief Financial Officer | ||
Date: December 1, 2023 |
4
EXHIBIT INDEX
Exhibits | Description | |
97.1 | Bank of Montreal Clawback and Recoupment Policy | |
99.1 | Annual Information Form | |
99.2 | Management’s Discussion and Analysis for the Fiscal Year Ended October 31, 2023 | |
99.3 | Consolidated Financial Statements for the Fiscal Year Ended October 31, 2023 | |
99.4 | Consent of Independent Registered Public Accounting Firm dated December 1, 2023 | |
99.5 | Certifications of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
99.6 | Certifications of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
99.7 | Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
99.8 | Code of Conduct (incorporated by reference to the Bank’s Current Report on Form 6-K furnished to the Commission on June 13, 2022) | |
101 | Inline Interactive Data File | |
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
5