Bank of Montreal Shares
Bank of Montreal is Canada's oldest bank, founded in 1817. Going by the deposits it enjoys, Bank of Montreal is the fourth largest bank in Canada, which also operates in the United States of America. Its presence in the States is substantial in Chicago, where it is known as Harris Bank or BMO Harris. It has more than 900 operational branches, and held a prestigious 189 position on the Forbes Global list of 2000. Though it was founded in Montreal, from which comes the name, it now has its headquarters in Montreal and Toronto, Canada. Its list of financial services includes retail banking, a line of credit cards, personal finance and insurance. It also is a fore runner in providing wealth management solutions and has a whole variety of options for the interested investor.
A financial snapshot of the Bank of Montreal include sales at the year end 2008 at an above of CAD $ 20 billion, a market capital of above C$ 28 billion, above C$ 500 million of outstanding shares in the market and above C$ 500 thousand closely held shares. This is a positive sign to all investors in this day of financial turmoil.
Listed in the Toronto Stock Exchange (TSX) and the New York Stock Exchange (NYSE) as BMO, the stocks of this bank are available at an approximate value of C$ 52.66. While the year 2008 has been year of low profits for the financial sector, Bank of Montreal also suffered some set backs. But the year 2009 has been one full of surprises, and especially, very nice surprises for investors who owned and kept their shares of the bank till the third quarter. Defying odds and the pessimism of some trade analysts, Bank of Montreal reported a mind boggling profit of over C$ 500 million, causing the shares to escalate at a 6.6 %. While some investors were disappointed as they spent the first half of the year selling the shares, others who had the shares closely held went smiling to the bank!
The earnings of the bank last year had been looking up from the third quarter, but the bad news was that earnings per share continued to fall due to a higher number of outstanding shares in the market. This had prompted many analysts to predict a continued fall. But with an astounding capital ratio of 11.7%, Bank of Montreal has become the investor's dream in Canada and USA.
Though looking at a brighter tomorrow, Bank of Montreal also suffered the financial pangs of the year 2008. Banks in Canada are required to maintain a capital ratio of 7% at least, which BMO reported as 9.4%. Though it was above the required mark, it was less compared to the other biggies in the market. Bank of Montreal took up the challenge and proceeded to employ the strategy of lower its share value, to sell more shares in the market. While the strategy worked at the level of increasing capital, it also generated a negative spread between preferred and common equity. This suggested that the preferred equity was less, and this was not a good sign, when all other bigger banks of Canada reported a positive spread of over 100.
A far cry from the year gone by, the bank looks forward to spreading its wings, and there are also talks of it acquiring a bank in the USA to increase business in the country. For investors, Bank of Montreal is a good investment decision and a promise of future returns.