Bank of Montreal (USA) (NYSE:BMO)

CAPS Rating: 4 out of 5

The Company offers a range of credit and non-credit products and services directly and through Canadian and non-Canadian subsidiaries, offices and branches.


Player Avatar OwnershipSociety (< 20) Submitted: 6/21/2013 5:14:15 PM : Outperform Start Price: $52.70 BMO Score: +0.52

Canadian mortgages are all floaters, and they are focused on the commercial space, which I think makes their asset profile compare favorably to many US banks. They have relatively low mortgage exposure compared to their commercial loans, which should help them outperform other Canadian banks as housing prices there decelerate. I do not believe that the housing market will crash in Canada.Among other things, they trade at the deepest discount to Graham Number out of any large cap money center bank.They had some NIM and efficiency ratio issues in Q2 but I think these issues should only improve as rates rise in the US and they make their high yield savings accounts less attractive relative to checking.

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