and Harris Bank branches, as well as through direct banking channels such as bmo.com, harrisbank.com and a network of more than 2,200 automated banking machines (ABMs). Our goal is to be the only financial services provider our cus- tomers ever need. We will earn this right by treating our customers as individuals and by providing personal attention and customized solutions consistently through all our channels. Personal and Commercial Client Group (P&C) is committed to providing more than eight million customers across Canada and the United States with a fully integrated approach to managing all aspects of their financial affairs. We offer a full range of products and services through our highly skilled financial  service providers in more than 1,100 BMO Bank of Montreal  Group Description and Strategy 2002 Group Objectives and Achievements  2003 Group Objectives Business Environment and Outlook  PERSONAL AND COMMERCIA L CLIENT GROUP  BMO FINANCIAL GROUP ANNUAL REPORT 2002 37 Heading into 2003, GDP growth is expected to remain strong in Canada and to pick up in the United States. The sustained recovery should lead central banks in both countries to increase interest rates in 2003. In the Canadian retail segment, growth in consumer loans and deposits is expected to be a moderate 5%. Demand for retail mortgages is expected to remain relatively strong with growth approximating 6%. Business investment is expected to improve in 2003, producing modest commercial loan growth in the range of 2% to 3%. During the last quarter of 2001 and in 2002, the economic outlook brightened as the United States emerged from its short recession of 2001. Economic growth in 2002 was moderate in the United States and relatively strong in Canada because of stronger  consumer demand and stronger production and employment growth. Both countries pursued stimulative monetary policies, and the United States pursued highly expansionary fiscal  policies. Low interest rates produced significant spread com- pression in retail deposits, but fuelled record home sales and high consumer demand for mortgages. Economic uncertainty and weak stock markets prompted safety-seeking investors to shift funds from mutual fund port- folios to interest-bearing deposit accounts, notwithstanding  the low interest rates available. b Grow market share in Chicagoland by expanding our distribution network through a combination of new branch openings and acquisitions. b Continue to target a US$1 billion increase in retail and small business loans in the United States. b Extend the services offered through our online banking channel.  b Leverage our position in Commercial and Small Business Banking to con- tinue to build momentum in balance sheet and market share growth. b Continue to improve our customer loyalty scores and close the shortfall relative to the competition, in both the personal and small business bank- ing segments. b Continue to drive improvements in productivity. b Drive revenue growth by improving customer retention and loyalty, expanding existing customer relationships and acquiring new customers. These objectives will be supported by sustaining continued improvements in our distribution capabilities. b Small business banking loyalty scores improved to 29.0%, an increase of 100 bps. However, the average loyalty score of the competition increased by 170 bps to 33%.  b Personal banking loyalty scores, as measured independently by a third party, increased to 27.6%. We closed the shortfall relative to the competi- tion by 340 bps to 370 bps. b Chicagoland BankingGLYPH<213>s retail and small business loans increased US$1.7 bil- lion or 26%. The acquisition of Joliet accounted for US$500 million or seven percentage points of the increase.  b Loans and acceptances increased $6 billion or 8%, after adding back the effects of securitizations. Our provisions were consistent with our expecta- tions and we continued to refine and improve our processes and internal controls related to lending decisions. b In a low-demand market we were able to achieve significant growth in commercial lending. b Continued to rank second in small business loans of up to $5 million and increased our market share 61 bps over 12 months to 19.48%, based on the latest available data.  b Total personal banking market share rose 40 basis points (bps) to 13.69%. Total personal banking includes personal loans (excluding credit cards), residential mortgages (including third-party mortgages), retail operating deposits, mutual funds and term investments. b More than 85% of our branches have been converted to Pathway Connect, our new sales and service technology platform. Continue replacement of our sales and marketing technology platform. Achieve asset growth while maintaining existing high asset quality standards through continuing development of technology, state-of- the-art risk management techniques and strict internal discipline. Increase our share of the full-service banking market for small business and commercial lending. In the United States:  Continue to target a US$1 billion annual increase in retail and small business loans for the next several years, and assess strategic merger and acquisition opportunities. Increase our customer loyalty scores in both the personal and small business banking segments. In addition to the above achievements, we improved our group  productivity ratio by 269 bps to 60.0%. In Canada: Increase our market share of full-service personal banking.