Bank of Montreal increased assets by 2.6 billion
2022.12.16 13:19
Bank of Montreal increased assets by 2.6 billion
Budrigannews.com – After Canada’s financial regulator asked lenders to set aside more capital to deal with a turbulent economy as a result of sharp increases in interest rates, the Bank of Montreal stated that it had raised C$2.6 billion (1.9 billion USD) by issuing new shares.
Canada’s No. 1 4 lender to fully utilize its over-allocation option, the bank announced on Friday.
BMO sold new shares for C$118.60 each, a 5.2% discount from Monday’s close when the company announced plans to raise capital to increase its Common Equity Tier 1 ratio to at least 11.5 percent.
According to BMO, a private placement brought in C$1 billion from investors such as the Caisse de dépôt et placement du Québec and CPP Investments.
Following the announcement of the capital raise on Tuesday, BMO shares fell 2% to C$120.56 on Friday.
BNP Paribas (OTC:) will receive an additional C$750 million from a share placement. however, this is contingent on BMO’s successful acquisition of the $16 billion U.S. unit of the French bank Bank of the West.
BMO’s capital raise comes almost seven days after Canada’s monetary controller Office of the Administrator of Monetary Establishments raised how much capital the country’s greatest moneylenders should hold as solidness cushions by 50 premise focuses to 3% of hazard weighted resources in light of steady expansion and increasing loan costs.
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To combat inflation, the Bank of Canada increased its benchmark overnight interest rate by half a percentage point to 4.25 percent last week, making it the highest level in nearly 15 years.
Canadian banks have already begun to increase bad debt provisions as a result of the rise in borrowing costs, which has raised the possibility of a severe economic slowdown and increased bad debt.
