Summary: Bank of Montreal

One of the five dominant banks in Canada with a No. 2 position in commercial banking Prudent credit risk management Weaker profitability versus domestic peers Fairly high dependence on wholesale funding, though similar to that of large Canadian peers Our outlook on Bank of Montreal (BMO) is negative, similar to the other five large Canadian banks, reflecting the possibility that we may reduce the additional uplift we include in the rating for extraordinary government support. The issuer credit rating (ICR) on BMO currently incorporates two notches of uplift for our expectation that the bank would receive extraordinary government support in a crisis. We could lower the rating on BMO if we think bank creditors may be subject to a greater

...Fairly high dependence on wholesale funding, though similar to that of large Canadian peers Outlook Our outlook on Bank of Montreal (BMO) is negative, similar to the other five large Canadian banks, reflecting the possibility that we may reduce the additional uplift we include in the rating for extraordinary government support. The issuer credit rating (ICR) on BMO currently incorporates two notches of uplift for our expectation that the bank would receive extraordinary government support in a crisis. We could lower the rating on BMO if we think bank creditors may be subject to a greater likelihood of loss than we currently anticipate in the rating with the implementation of the bail-in framework in Canada. We could revise the outlook to stable if we determine that the Canadian government's bail-in plans are unlikely to diminish the possible pressure on the government to support a bank like BMO in a crisis situation, or if the combination of additional loss-absorbing capacity and a strengthened...

Summary