WATERLOO

Since he has been pushing retail employees to get to know their customers better, Bank of Montreal chief executive officer Bill Downe was happy to be recognized when he visited the Bank of Montreal's downtown Waterloo branch yesterday.

But he pointed out that branch staff knew him from his picture, not from the account he held there -- 40 years ago, when he was saving the few hundred dollars he made shelving books at the library and caddying at Westmount Country Club.

Downe was in his hometown yesterday to celebrate the formal opening of BMO's new regional headquarters in the Marsland Centre office tower.

It was a pleasant outing for Downe, whose term as chief executive has been tempestuous.

Downe became BMO's top boss in March 2007, when the company was in the midst of a 1,100-position job reduction and a commodities trading mishap that forced it to take an $850-million charge.

Then the global credit crunch hit and, to date, BMO has taken about $800 million in related writedowns.

The banking industry as a whole will see another couple of similar quarters, and difficulties associated with the U.S. housing market are likely to last into 2010, Downe predicted.

BMO's difficulties have made Downe's first 16 months hectic, but they have also made people receptive to his change agenda, he said.

"It is a very good time if you want to mobilize a large group of people, to get their attention," he said.

One of the biggest ongoing changes in the corporation is a restructuring of Canadian retail operations.

To try to lift BMO from its fourth-place position in retail banking, it has moved more staff into front line roles dealing directly with customers and also retrained employees on better methods of customer service.

For example, branch staff now begin each day with "team huddles" in which they share customer stories.

Another aspect of the restructuring was the splitting of most of Ontario, except greater Toronto, into a new territory with regional headquarters in Waterloo.

The office here is in charge of 236 branches with a total of 1.1 million customers, said Susan Brown, the senior vice-president in charge of the office.

The establishment of a separate region for the balance of Ontario reflects the demographic differences between Toronto and areas like ours, Brown said.

For example, Torontonians tend to be younger than other Ontarians and therefore less interested in retirement-planning products.

Waterloo is a good fit for the company's regional offices because of its central location and the opportunity it provides to do business with the area's many entrepreneurs, Downe said.

"It has absolutely nothing to do with hometown bias," said Downe, a 1970 KCI graduate.

BMO employees have been moving into the Marsland Centre over the past year.

Besides the retail operation, the building houses local offices of BMO Nesbitt Burns and BMO Harris Private Banking.

About 105 people work in the Waterloo office.

Downe held meetings with the office's staff, middle managers and top brass.

He and BMO Capital Markets chief economist Sherry Cooper also sat down with a dozen Waterloo Region business leaders.

Downe said he was impressed with how optimistic local business people are despite challenges like the strong Canadian dollar.

"The feedback I got was, 'It just forced us to become more competitive,' " he said.

He also liked how it only took an hour to get here from Toronto by car.

Downe doesn't always drive. He will sometimes ride a bicycle or take the subway, he said.

"If you always follow the same path, it's very difficult to hold to the pledge that every day you're going to (learn) something new," Downe said.

mwalcoff@therecord.com