Bank of Montreal

The stable outlook reflects S&P Global Ratings' expectation that over the two-year outlook horizon, BMO will maintain a strong balance sheet as well as operating performance, although it will be lower in 2024 than it was in 2023 due to rising provisions. We expect the S&P Global Ratings RAC ratio will be at the lower end of our adequate range of 7%-10% during the same period. We believe credit quality metrics will continue to deteriorate but remain manageable due to strong underwriting standards. We expect BMO will maintain appropriate levels of liquidity similar to those of domestic peers and strong access to global funding markets. We could lower the rating if credit losses substantially exceeded the peer average; the RAC

...Expanded geographical footprint in the U.S. adds to strong domestic franchise Bank of Montreal (BMO) benefits from its long-standing and well-established franchise as Canada's fourth-largest bank, with good domestic market share across several product offerings in commercial and personal lending although these are not as extensive, particularly in personal products, as those of higher-rated peers. BMO's footprint expanded with the acquisition of Bank of the West (BOTW; closed Feb. 1, 2023), which provided entry to the California market. In addition to BOTW, the bank expanded beyond the U.S. with a presence in key growth markets and a digital platform that extends its footprint nationally. Of importance, the bank now derives 44% of revenues and 41% of net income from its U.S. operations, a higher proportion than that of some domestic systemically important peers. The higher proportion of U.S. earnings is in-line with BMO's strategy for an integrated and competitively advantaged North American...

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