BMO Financial Group To Report Mark-to-Market Commodity Trading Losses Estimated To Be Between $350 Million And $450 Million (Pre-Tax) In The Second Quarter



    TORONTO, April 27 /CNW/ - BMO Financial Group (NYSE:   BMO, TSX: BMO) said
today that mark-to-market commodity trading losses estimated at between
CDN$350 million and CDN$450 million, pre-tax, will be recorded in the second
quarter of its 2007 fiscal year. The impact of this to BMO Financial Group's
second quarter earnings, which will be announced on May 23, 2007, is estimated
in the range of 45 cents to 55 cents per share.
    A number of factors contributed to these mark-to-market commodity trading
losses. During the quarter, positions held by BMO Financial Group in the
energy market, primarily for natural gas, were negatively impacted by changes
in market conditions. In particular, the market became increasingly illiquid
and volatility dropped to historically low levels. In conjunction with this,
there was a refinement in BMO's approach to estimating the market value of
this portfolio.
    Bill Downe, President and Chief Executive Officer of BMO Financial Group,
said:
    "The commodity trading losses were the result of decisions that did not
adequately recognize the vulnerability of the portfolio to changes in market
volatility. We are conducting a thorough review and actions have been taken to
address the current situation and reduce the likelihood of a recurrence. The
commodity trading losses are particularly disappointing as our company
continues to experience good operating momentum. We remain committed to
providing the high level of service that our clients in the energy sector have
come to expect from BMO Capital Markets."
    BMO will continue to reposition this portfolio to a lower and sustainable
level, consistent with maintaining its core business of serving its energy
client franchise. Going forward, the value of this portfolio will be subject
to market conditions.
    It is possible that as this portfolio is repositioned it could experience
subsequent gains or losses depending on future market conditions. However,
BMO's expectation is that, even using adverse assumptions, any losses would be
in a substantially lower range than those announced today.
    BMO also said that its Tier 1 capital ratio at the end of the first
quarter was 9.90 percent and the impact of these losses will be less than 20
basis points on that ratio. As a result this loss does not impair the ability
of the company to pursue its strategic agenda.
    There will be a conference call for Bill Downe, President and Chief
Executive Officer, BMO Financial Group; Karen Maidment, Chief Financial and
Administrative Officer, BMO Financial Group; Yvan Bourdeau, Chief Executive
Officer, BMO Capital Markets and Head of Investment Banking Group; and Bob
McGlashan, Chief Risk Officer, BMO Financial Group, to comment on this
announcement and to respond to questions from the investor community on Friday
April 27, 2007 from 9:00 a.m. (EDT) to 9:30 a.m. (EDT).
    Interested parties are invited to listen to this call. The call may be
accessed by telephone at 416-695-9753 (from within Toronto) or 1-888-789-0089
(toll-free outside Toronto). A replay of the conference call can be accessed
until May 11, 2007 by calling 416-695-5275 (from within Toronto) or
1-888-509-0081 (toll-free outside Toronto) and entering passcode 643819
followed by the number sign.
    A live webcast of the call can be accessed on our web site at
www.bmo.com/investorrelations. A replay can be accessed on the site until
Thursday, July 12, 2007.

    CAUTION REGARDING FORWARD-LOOKING STATEMENTS
    Bank of Montreal's public communications often include written or oral
forward-looking statements. Statements of this type are included in this
document, and may be included in other filings with Canadian securities
regulators or the U.S. Securities and Exchange Commission, or in other
communications. All such statements are made pursuant to the 'safe harbor'
provisions of, and are intended to be forward-looking statements under, the
United States Private Securities Litigation Reform Act of 1995 and any
applicable Canadian securities legislation. Forward-looking statements may
involve, but are not limited to, comments with respect to our objectives and
priorities for 2007 and beyond, our strategies or future actions, our targets,
expectations for our financial condition or share price, and the results of or
outlook for our operations or for the Canadian and U.S. economies.
    By their nature, forward-looking statements require us to make
assumptions and are subject to inherent risks and uncertainties. There is
significant risk that predictions, forecasts, conclusions or projections will
not prove to be accurate, that our assumptions may not be correct and that
actual results may differ materially from such predictions, forecasts,
conclusions or projections. We caution readers of this document not to place
undue reliance on our forward-looking statements as a number of factors could
cause actual future results, conditions, actions or events to differ
materially from the targets, expectations, estimates or intentions expressed
in the forward-looking statements.
    The future outcomes that relate to forward-looking statements may be
influenced by many factors, including but not limited to: general economic
conditions in the countries in which we operate; interest rate and currency
value fluctuations; changes in monetary policy; the degree of competition in
the geographic and business areas in which we operate; changes in laws;
judicial or regulatory proceedings; the accuracy and completeness of the
information we obtain with respect to our customers and counterparties; our
ability to execute our strategic plans and to complete and integrate
acquisitions; critical accounting estimates; operational and infrastructure
risks; general political conditions; global capital market activities; the
possible effects on our business of war or terrorist activities; disease or
illness that impacts on local, national or international economies;
disruptions to public infrastructure, such as transportation, communications,
power or water supply; and technological changes.
    We caution that the foregoing list is not exhaustive of all possible
factors. Other factors could adversely affect our results. For more
information, please see the discussion on pages 28 and 29 of BMO's 2006 Annual
Report, which outlines in detail certain key factors that may affect BMO's
future results. When relying on forward-looking statements to make decisions
with respect to Bank of Montreal, investors and others should carefully
consider these factors, as well as other uncertainties and potential events,
and the inherent uncertainty of forward-looking statements. Bank of Montreal
does not undertake to update any forward-looking statement, whether written or
oral, that may be made, from time to time, by the organization or on its
behalf.
    Assumptions about the performance of the natural gas and crude oil
commodity markets and how that will affect the performance of our commodity
business were material factors we considered when establishing our estimates
of the trading losses set out in this release. Key assumptions included that
commodity prices and implied volatility would be stable and our positions
would continue to be managed with a view to reposition the portfolio to a
lower and sustainable level.





For further information:

For further information: Media Relations Contacts: Ralph Marranca,
Toronto, ralph.marranca@bmo.com, (416) 867-3996; Ronald Monet, Montreal,
ronald.monet@bmo.com, (514) 877-1101; Investor Relations Contacts: Viki
Lazaris, Senior Vice-President, Investor Relations, viki.lazaris@bmo.com,
(416) 867-6656; Steven Bonin, Director, Investor Relations,
steven.bonin@bmo.com, (416) 867-5452; Krista White, Senior Manager, Investor
Relations, krista.white@bmo.com, (416) 867-7019


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890