“I don’t have a plan with a date on it, I can say that categorically,” he says. “The changes we’ve been making are really a pattern that you can look back over the last six or seven years, where we just keep building the capabilities of a very talented management team. We have a lot of depth.”
The company boosted its top investment banker (Darryl White) to the chief operating officer role as of Nov. 1, and then-COO Frank Techar became the bank's vice chairman. Meanwhile, Patrick Cronin replaced White atop BMO Capital Markets, Giles Ouellette took over BMO Asset Management, and Joanna Rotenberg was made head of wealth management.
A risk sharing proposal would likely have lenders paying some sort of a deductible when a mortgage goes bad - similar to what car drivers do in a car crash.
The banks say mortgage defaults are so rare - 5 times lower than the U.S. by one measure - that making lenders share the risk is unnecessary and not worth the costs. “If it’s supposed to be something to improve the quality of underwriting," says the Canadian Bankers Association's Darren Hannah, "Well the quality of underwriting is already very strong.”
The group - which includes TD, BMO, CM, RY, and BNS - holds its regular meetings with the country's finance department this week, and plans to let its feelings be known.
Also of interest to Genworth (NYSE:GNW), whose Canadian mortgage insurance unit is the country's second-largest.
The Canadian lender is cut to Underperform from Neutral at Credit Suisse.
Checking the scorecard this year, BMO's performance is roughly inline with three of the other four big Canadian banks. The major outlier is Scotiabank with a 30.7% gain. BMO, CIBC, RBC, and TD Bank are all ahead 12-16%.
TD Securities analyst Mario Mendonca downgrades Bank of Montreal (NYSE:BMO) to Hold from Buy, noting the weaker-than-expected Q2 earnings report, and moderating earnings growth in Canadian personal and commercial banking.
Alongside an earnings miss this morning, with adjusted income held back by a big rise in loan-loss provisions, Bank of Montreal (BMO +1.8%) plans to cut about 1,850 jobs from its 46K-strong workforce, according to a memo seen by Reuters.
In the memo, CEO Bill Downe takes note of structural changes in the financial services industry, i.e. new digital technologies.
Reported FQ2 income was in even lower thanks to a C$132M restructuring charge.
As for those boosted loan loss provisions - not a surprise, says National Bank's Peter Routledge, who expects similar actions from across the banking sector.