Bank of Montreal

One of the five dominant banks in Canada, with a solid position in commercial banking Good diversification by line of business and geography Management's clearly articulated and executed business strategy Weaker profitability metrics compared with peer average Fairly high dependence on wholesale funding compared with international peers, though similar to other large Canadian peers S&P Global Ratings' outlook on Bank of Montreal (BMO) and its operating subsidiaries is stable, reflecting our expectation that over the next two years BMO will continue to generate positive operating leverage while retaining its current diversified earnings mix, manage its S&P Global Ratings risk-adjusted capital (RAC) ratios within the 7%-10% range, that we deem adequate, and maintain its asset quality metrics in line with peer

...Fairly high dependence on wholesale funding compared with international peers, though similar to other large Canadian peers Outlook: Stable S&P Global Ratings' outlook on Bank of Montreal (BMO) and its operating subsidiaries is stable, reflecting our expectation that over the next two years BMO will continue to generate positive operating leverage while retaining its current diversified earnings mix, manage its S&P Global Ratings risk-adjusted capital (RAC) ratios within the 7%-10% range, that we deem adequate, and maintain its asset quality metrics in line with peer performance. We could lower the issuer credit rating (ICR) if at any point we expect the S&P Global Ratings RAC ratio to decline below 7% over a sustained period, or if we observe growing risk appetite or weakening credit quality, particularly within Canadian consumer and U.S. commercial portfolios. We currently consider it less likely that we would raise the ratings on BMO given our expectation of at-par performance on capitalization...

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