Thomas Milroy, left, and Eric Tripp are photographed at the intersection of King and Bay Streets in Toronto, Ontario, Wednesday, September 3, 2014.Kevin Van Paassen/The Globe and Mail
The architects of Bank of Montreal's expansion in the securities business after the financial crisis are retiring.
Tom Milroy, who spent 21 years at the bank, is resigning as chief executive officer of BMO's capital markets business. Eric Tripp, who was at the bank 31 years, is leaving his job as president.
They will be replaced by Darryl White, who becomes group head, and Patrick Cronin, who becomes chief operating officer. The changes take effect Nov. 1.
Mr. Milroy, 59, and Mr. Tripp, 58, were behind the strategy to take BMO much more heavily into the U.S. capital markets business. But first they had to get through the crisis.
They were co-presidents of the firm when the financial crisis hit. They were elevated to the top jobs in early 2008, as the bank reshuffled leadership amid almost $500-million in charges related to capital markets transactions that had gone sour. Mr. Milroy recalls working seven days a week from January, 2009, until Easter, and Mr. Tripp was right there with him, fighting fires.
The firm, instead of freezing, used the crisis to rebuild itself. It hired hundreds of new people, some in new roles, drawing largely from U.S. banks that were hit far harder.
In the early years of the expansion, before the changes had yet to bear much fruit, there were those who were not sold on the strategy – in the firm and even on BMO's board, Mr. Milroy said in an interview. Other banks had struggled to make their respective capital markets divisions in the U.S. work, setting a precedent BMO would have to overcome.
"People are willing to give you the benefit of the doubt, but a lot of people had tried and failed" in the United States, Mr. Milroy said.
Now, with investment banking in Canada a largely mature market where fast growth is tough to come by, the U.S. provides a fresh opportunity because BMO is still a relatively small player there. Today, the U.S. produces about a quarter of the profit for the capital markets business, and is likely to one day be as big or bigger than the Canadian operations.
"It's one of those perfect moments where we can see what we've built," Mr. Milroy said.
Mr. Milroy and Mr. Tripp said they are most proud of being able to expand the firm while maintaining a collegial culture. There is truth to that. Every bank talks about a team atmosphere, but it's not always evident among the rank and file. BMO bankers are generally a happy lot, however.
BMO has also put a focus on diversity under the pair, and during their tenure BMO led the way on publicly pushing for greater work-life balance for bank staff.
"We've been able to manage a high-performance group of people that actually manage to collaborate," said Mr. Tripp, when asked what makes him most proud.
BMO chief executive officer Bill Downe, in his internal memo on the change, said that the pair "rank among the most highly respected in our industry" and he called it an "important transition for us – in part because Tom and Eric have been such good partners and, in many ways architects, of what BMO Capital Markets has become."
The new leadership is structured in a similar way as it was under Mr. Milroy and Mr. Tripp. Just as Mr. Milroy came from investment banking and Mr. Tripp from trading, Mr. White is a banker by background and Mr. Cronin comes from trading.
The naming of Mr. White as the new head of capital markets will come as little surprise. The 43-year-old has been on a fast-track to the top of the firm, and was widely seen as a leading contender. He has been with BMO 20 years. He was named head of global investment and corporate banking in early 2012.
Mr. Cronin, 47, has been with the firm 21 years on the trading side. His most recent role was head of trading products.
The new bosses will have a lot of room to run as global markets grow and the U.S. affords new opportunities, while the departing executives are optimistic about the future of the business.
"It's a wonderful industry to be a part of," Mr. Tripp said. Even though the competition is fierce and there are constant challenges from technology and other changes, "the ingenuity of the people continues to be more than enough to overcome [them]."