2008-08-26 Q3:
Bank of Montreal reported its third-quarter earnings today. Profits were down on an increase in the bank’s loan loss reserves, and write-downs increased by $134M.
Here’s the tally thus far:
- Write-Downs/Charge-Offs: $6.11M + $134M = $745M
- Tally for cash raised: $0.0
- Current level of Level III assets at $5M
- Current level of loan loss reserves at $484M
We now sum all the distresses to get CIBC’s current Misery Index of $1.23B <>
2008-05-29 Write It Up:
The Bank of Montreal was good to its word and not only took no further write downs on its assets, but the bank removed some of the previously written down C$495 million investments in the first quarter. The after tax recovery amounted to $28 million and the bank still has not raised significant capital. So the damages and distress come to $639 million – $28 million
2008-03-19: Instead of adding a hefty $1.15 billion to Bank of Montreal’s top line we are reporting that the bank skillfully renegotiate it two of it’s commercial paper trusts, the Apex and Sitka Trusts.
The Toronto-based bank will provide about C$850 million ($839.8 million) of the C$1.15 billion in funding to satisfy collateral calls for the Apex and Sitka Trusts, Bank of Montreal said in a statement today sent by Canada NewsWire.
Bank of Montreal said the risk of a credit loss is “considered low” and that it doesn’t expect to take further writedowns on its C$495 million investments in the trusts as of Jan. 31.
2008-02-29:
The Bank of Montreal has been making disclosures so far with fingers crossed. Today the
Bank of Montreal has signalled it may pull out of an effort to restructure $33-billion in stranded asset-backed commercial paper, as mounting woes in the global credit market leave the bank facing margin calls of more than $500-million on two of its own ABCP trusts.
That’s interesting since we were not aware of a $33 billion Big fat ones to begin with.
Bank of Montreal’s specific commitment to the so-called liquidity line has never been disclosed, but it is one of four Canadian banks that agreed in December to provide as much as $2-billion in total.
The bank reports Q1 2008 results on March 4, but there seems to be at least $495 million more in exposures to look for.
BMO’s problems are particularly acute, with the bank last week announcing $490-million in writedowns and this week facing as much as $495-million more because of the unravelling of two trusts that it runs.
2008-02-22:
Having confessed it’s fourth quarter 2007 sins the Bank of Montreal pre announced a C$490 million first quarter 2008 pretax charge due to the credit crunch followed by the drain to buttress support for two leaky SIVs, of up to US$11 billion to Links Finance Corp and 1.2 billion euros (US$1.76 billion) to Parkland Finance Corp. The charge includes
- C$160 million pretax exposure to ACA Financial Guaranty Corp
- C$175 million related to trading and structured credit positions
- C$130 million for its holdings in a Canadian asset-backed commercial paper investment called Apex/Sitka Tr
- C$60 million before tax increase of general provision for credit losses
- C$25 million pretax write down of the value of its stake in SIVs
The C$11 billion in support to the two SIVs is a sticky item. Last November the bank provided $1.6-billion to support the SIVs, but said that maximum exposure was much smaller. After the 11 billion number was revealed Blackmont Capital analyst Brad Smith was chafed,
“We anticipated some level of additional support would eventually emerge, [but] we believed management had made it clear that full liquidity support would not be extended to its two SIVs,” Mr. Smith said in a note to clients.
Was that the last of it on the SIVs or did the bank have it’s fingers crossed again? We will see when the bank reports on March 4. If nothing blows up it should look like $149M + $490M =$639M
2008-02-19:Bank of Montreal (BMO) saw it’s full-year 2007 earnings drop by 20 per cent to $2.1 billion from $2.7 billion it year before, due to a ”slew of one-off charges” the bank recorded $353 million provision for credit losses. The the full year 2007 data is sketchy but the remaining credit related concerns revolve around the bank’s exposure to asset-backed commercial paper and structured investment vehicles. For the fourth quarter
Bank of Montreal reported a 35 percent drop in fourth-quarter earnings to C$452 million, largely due to several capital-markets charges announced in advance.
BMO recorded C$318 million of charges before tax (C$211 million after tax) in the quarter for trading positions, and for lower valuations on its Canadian asset backed commercial paper and SIV investments.
Among the charges, BMO wrote down the value of its holdings of the two SIVs’ capital notes by about C$15 million, or 20 percent.
BMO also cut by about C$134 million, or 15 percent, the mark-to-market value of its Canadian ABCP holdings, which include commercial paper issued by a BMO-sponsored conduit and paper sponsored by nonbank conduits.
There were trading related charges amounted to (pre-tax) $853-million for the full year. Not counting the trading loss we get from above.
Write downs: on SIV + commercial paper = C$15 million + C$134 million
Bank of Montreal is due to report first quarter 2008 earnings on March 4.
