Friday, January 20, 2006

BMO Appoints Downe as COO

  
The Globe and Mail, Sinclair Stewart, 20 January 2006

Bill Downe may have been unveiled as the heir apparent to Bank of Montreal chief executive officer Tony Comper, but that doesn't mean he has to move back to Canada. Well, at least not for another year.

The long-time BMO executive was promoted to chief operating officer of the bank yesterday, and handed responsibility for all of its main business lines, including retail banking, wealth management, the U.S. Harris Bank subsidiary, and investment banking arm BMO Nesbitt Burns Inc.

Mr. Downe, an Ontario native who now makes his home in Chicago, will also become the only second-in-command at a Big Five Canadian bank who does not live in the country.

"Where people physically reside is less important than it was 30 years ago," Mr. Comper said. "Bill spends four days a week here."

That could soon change, if Mr. Comper steps down as expected in the spring of 2007, when he turns 62. According to the Bank Act, bank CEOs must be Canadian residents, meaning Mr. Downe will have to move home if he gets the top job.

"I tend to be very close to the front lines," he said in an interview yesterday.

"I spend a lot of time in Canada. I think it will be necessary to split my time."

Mr. Downe, a corporate banker for many years before ascending to head of BMO Nesbitt Burns in 2001, said he will focus particularly on getting out "in the field" with the bank's domestic retail operations. He has been in charge of BMO's U.S. banking operation, including its retail branch network, since 2002.

BMO's board has been working increasingly on succession over the past 18 months, and much of the next year will be devoted to easing the transition. People familiar with the bank don't expect any sudden shifts in its low-risk strategy if Mr. Downe eventually takes the reins.

"Why would you change when you have a functioning corporate culture that has no problems?" one industry analyst asked.

Certainly, Mr. Comper and his likely successor share similar styles. Both favour a patient growth strategy, and both have a low tolerance for risk in corporate lending. Neither is particularly flashy, either. Mr. Downe, for example, drives a 15-year-old Mercedes-Benz -- not for the cachet, as one person explained, but because it still runs.

With the business groups reporting to someone else, Mr. Comper said he will devote more time to acquisition possibilities, particularly around BMO's Harris franchise.

"I put a lot of my energy into looking at expansion in the United States and I'm going to put much more of my time into that [now]," he said. If the Conservative Party unseats the ruling Liberals in next week's federal election, as is widely expected, Mr. Comper may also have time to dust off the bank's abandoned merger plans with Bank of Nova Scotia and reconsider his options. As one of the smallest of Canada's banks, and the one with the most established U.S. foothold, BMO would be the most sought-after target in any potential merger scenario.

As part of the executive shuffle at BMO yesterday, Yvan Bourdeau was promoted to CEO and head of investment banking at BMO Nesbitt Burns, where he was formerly president. Tom Milroy and Eric Tripp were named co-presidents of the unit. Chief financial officer Karen Maidment, meanwhile, will continue to report directly to Mr. Comper, and has added chief administrative officer to her title.
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