Bank of Montreal's Credit Costs Should Peak in 2025

Bank of Montreal is the fourth-largest bank in Canada and one of six Canadian banks that collectively hold almost 90% of the nation's banking deposits. It derives roughly 60% of its earnings from Canada and 40% from the United States. BMO has a well-established Canadian banking presence, an established US retail operation in the Midwest, and an expanding California business through the Bank of the West, or BOTW, acquisition. BMO is not one of the largest or most dominant retail banks in Canada. However, with its more commercially focused book, it boasts a good share in its domestic commercial lending market, particularly for loans under CAD 100 million. BMO is the second-largest exchange-traded fund provider in Canada. Competing against BlackRock and Vanguard will likely get more difficult, but we expect passive to continue to grow in Canada, supporting future growth for major players.