Wednesday, July 25, 2007

BMO Renews Buyback Plan for 25 Million Shares

Dow Jones Newswires, 25 July 2007

There could be more than meets the eye in Bank of Montreal's renewed normal course issuer bid for 25 million shares, says Genuity Capital Markets. The proposed Normal Course Issuer Bid is much larger than the bank's 4 year average, and if completed, means BMO will have returned more than 100% of earnings in dividends and buybacks. Analyst suggests BMO's move means "the bank is modeling for a substantial reduction in capital requirements under Basel II" by building "sufficient capital flexibility to manage under the new requirements." This, Genuity says, "does alert us to the potential for a material increase in buyback activity heading into 2008."
Bloomberg, Doug Alexander, 24 July 2007

Bank of Montreal, Canada's fourth-largest lender, plans to buy back as much as 5 percent of its stock, extending its share repurchase program for another year.

Bank of Montreal will buy up to 25 million shares over 12 months starting Sept. 6, the Toronto-based bank said today in a statement. The bank had bought back about 5.33 million shares for an average price of C$69.72 as of the end of June under its current program, which ends Sept. 5.