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Where Bank of Montreal's Turning for Growth

Dan Caplinger
May 27, 2013

On Wednesday, Bank of Montreal (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 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


Change From Year-Ago EPS


Revenue Estimate

$3.97 billion

Change From Year-Ago Revenue


Earnings Beats in Past 4 Quarters


Source: Yahoo! Finance.

What's driving Bank of Montreal higher?
Analysts have increased their views on Bank of Montreal'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 (NYSE: CM), Toronto-Dominion (NYSE: TD), and Bank of Montreal among a total of six banks in January, Moody's identified higher debt levels among Canadian consumers as driving potential risk for the economy.

More recently, further economic headwinds could spell