We believe that the Canadian banking sector is encountering incremental pressure from headwinds facing the Canadian economy, which is heightening economic risk in the banking system. We also believe that industry risk for the Canadian banking sector is increasing. We expect that intensifying competition for loans and deposits will lead to pressure on profitability growth, especially in banks' retail businesses. We are affirming our 'A+/A-1' long- and short-term issuer credit ratings on BMO and BMO Financial Corp., as well as the 'A+' issue rating on BMO's senior unsecured debt. We are lowering our issue rating on BMO's and BMO Financial's subsidiaries' nondeferrable subordinated debt to 'BBB+' from 'A-', and our rating on its preferred shares and hybrid securities to 'BBB'
