Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Where Bank of Montreal (USA) (BMO)’s Turning for Growth

Bank of Montreal (USA) (NYSE:BMO)On Wednesday, Bank of Montreal (USA) (NYSE:BMO) will release its latest quarterly results. With a solid reputation as a strong Canadian financial institution, the bank has benefited from superior conditions in the Canadian economy over the past several years, avoiding much of the trouble that U.S. banks suffered during the financial crisis in 2008.

Yet one thing that many investors don’t realize about Bank of Montreal (USA) (NYSE:BMO) is that like its U.S. peers, it is far more than just a bank. With extensive other financial operations, the financial giant has exposure to investments and asset management as well. Let’s take an early look at what’s been happening with Bank of Montreal over the past quarter and what we’re likely to see in its quarterly report.

Stats on Bank of Montreal

Analyst EPS Estimate $1.50
Change From Year-Ago EPS 4.2%
Revenue Estimate $3.97 billion
Change From Year-Ago Revenue 0.2%
Earnings Beats in Past 4 Quarters 4

Source: Yahoo! Finance.

What’s driving Bank of Montreal higher?
Analysts have increased their views on Bank of Montreal (USA) (NYSE:BMO)’s earnings prospects in recent months, boosting their estimates for the April quarter and for the full 2013 fiscal year by $0.04 to $0.05 per share. The stock hasn’t responded much, however, remaining roughly unchanged since late February.

It’s easy for U.S. investors to paint Canadian banks with a single brush-stroke, as the differences in the banking system helped keep Bank of Montreal and its peers safer during the financial crisis five years ago. As Canada’s housing market has kept rising even after the housing bust south of its border, however, investors have gotten increasingly concerned about the potential health of its banks, especially the largest ones. With downgrades for Canadian Imperial Bank of Commerce (USA) (NYSE:CM), Toronto-Dominion Bank (USA) (NYSE:TD) , and Bank of Montreal (USA) (NYSE:BMO) among a total of six banks in January, Moody’s Corporation (NYSE:MCO) identified higher debt levels among Canadian consumers as driving potential risk for the economy.

More recently, further economic headwinds could spell trouble for Bank of Montreal (USA) (NYSE:BMO) and its peers. The plunge in gold and other precious metals threaten the mining industry, which plays an important role in the Canadian economy. That’s one area in which the bank’s purchase of U.S.-based Marshall & Ilsley proved prescient, as it helped diversify Bank of Montreal’s geographical exposure at what proved to be an opportune time.