Bank of Montreal is about to release earnings. Some American investors are convinced Canadian banks are over exposed to real estate and mortgages. Ponder this Bear Case Scenario.
Much of BMO growth comes from outside the highly regulated highly protected Canadian banking scene. BMO executives are not used to the bare knuckle capitalist approach followed in the US.
US acquisitions will distract management as they grapple with new issues. Will they pay enough attention to domestic issues.
All Canadian banks have large mortgage exposures. The sub prime phenomenon experienced in the US is not a factor. Much of the mortgage product is underwritten by the Canadian Government which is “AAA”
George Gutowski writes from a caveat emptor perspective.