Merchant Banking 2003 Focus Securitization Description and Strategy Overview of Line Performance International Description and Strategy 2003 Focus Overview of Line Performance 2003 Focus BMO FINANCIAL GROUP ANNUAL REPORT 2002 47 The Merchant Banking line of business operates through BMO Equity Partners and BMO Halyard Partners. It sources, structures and finances private equity investments, primarily in North America. Our strategy is to capitalize on proprietary information flows to build and manage a portfolio of private equity invest- ments in mid-market companies that produce superior returns over time. Weakening economic conditions created a climate of uncertainty in financial markets and affected overall commitment levels and performance. Despite this, we strengthened our merchant bank- ing business by continuing to successfully align our institutional priorities with the other IBG lines of business. The International line of business provides financial institutions and select multinational corporations with best-in-class client service and innovative financial and operational solutions. These services include trade finance, correspondent banking, financing and other bank services, which are enhanced through the use  of technology. We continue to pursue a strategy of prudently supporting our North American clients in the key international markets where they do business. The year 2002 proved a challenging one as slowing and uncertain economic conditions reduced export and import transactions, resulting in lower trade finance volumes and fees and moderate results in the international banking sector. We have made solid progress on our strategy to provide fully integrated solutions to clients. This has resulted in enhanced service for our clients and improved fees across Investment Banking Group. b Maintain our leadership in trade finance and grow our busi- ness in those markets where we have distinctive product and risk assessment capabilities.  b Continue to promote our unique Canadian and U.S. correspon- dent banking capabilities internationally. b Continuetoselectivelypursueinvestmentsthatwillachievesupe- rior returns, as demand for private equity investing increases. b Grow assets under management by US$3.6 billion with a focus on high-grade asset structures and fiduciary high-yield assets. b Continue to increase fee-based revenue. CIM b Maintain leadership position in Canada and remain a rec- ognized niche player in the United States by focusing on innovative structuring solutions in new and existing market segments.