{"id":2194,"date":"2008-05-27T13:53:07","date_gmt":"2008-05-27T17:53:07","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=2194"},"modified":"2008-05-27T13:53:07","modified_gmt":"2008-05-27T17:53:07","slug":"bmo-capitalization-2q08","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=2194","title":{"rendered":"BMO Capitalization : 2Q08"},"content":{"rendered":"

BMO has released its Second Quarter 2008 Report<\/a> and Supplementary Package<\/a>, so it’s time to recalculate how much room they have to issue new preferred shares – assuming they want to, in this environment!<\/p>\n

Step One is to analyze their Tier 1 Capital, reproducing the prior format<\/a>:<\/p>\n

\n\n\n\n\n\n\n\n\n\n
BMO Capital Structure
\nOctober, 2007
\n& April, 2008<\/td>\n<\/tr>\n
 <\/td>\n4Q07<\/td>\n2Q08<\/td>\n<\/tr>\n
Total Tier 1 Capital<\/td>\n16,994<\/td>\n17,633<\/td>\n<\/tr>\n
Common Shareholders’ Equity<\/td>\n83.8%<\/td>\n84.3%<\/td>\n<\/tr>\n
Preferred Shares<\/td>\n8.5%<\/td>\n9.6%<\/td>\n<\/tr>\n
Innovative Tier 1 Capital Instruments<\/td>\n14.3%<\/td>\n13.8%<\/td>\n<\/tr>\n
Non-Controlling Interests in Subsidiaries<\/td>\n0.2%<\/td>\n0.2%<\/td>\n<\/tr>\n
Goodwill<\/td>\n-6.7%<\/td>\n-7.9%<\/td>\n<\/tr>\n<\/table>\n<\/div>\n

Next, the issuance capacity (from Part 3 of the introductory series<\/a>):<\/p>\n

\n\n\n\n\n\n\n\n\n\n\n
BMO
\nTier 1 Issuance Capacity
\nOctober 2007
\n& April 2008<\/td>\n<\/tr>\n
 <\/td>\n4Q07<\/td>\n2Q08<\/td>\n<\/tr>\n
Equity Capital<\/td>\n(A)<\/td>\n13,126<\/td>\n13,499<\/td>\n<\/tr>\n
Non-Equity Tier 1 Limit<\/td>\n(B=A\/3), 4Q07
(B=0.428*A), 2Q08<\/td>\n		4,375<\/td>\n5,778<\/td>\n<\/tr>\n
Innovative Tier 1 Capital<\/td>\n(C)<\/td>\n2,422<\/td>\n2,438<\/td>\n<\/tr>\n
Preferred Limit<\/td>\n(D=B-C)<\/td>\n1,953<\/td>\n3,340<\/td>\n<\/tr>\n
Preferred Actual<\/td>\n(E)<\/td>\n1,446<\/td>\n1,696<\/td>\n<\/tr>\n
New Issuance Capacity<\/td>\n(F=D-E)<\/td>\n507<\/td>\n1,644<\/td>\n<\/tr>\n
Items A, C & E are taken from the table
\n“Capital and Risk Weighted Assets”
\nof the supplementary information;
\nNote that Item A includes Goodwill and non-controlling interest<\/em>

\nItem B is as per OSFI Guidelines; the limit was recently increased<\/a>.
Items D & F are my calculations<\/em><\/td>\n<\/tr>\n<\/table>\n<\/div>\n

and the all important Risk-Weighted Asset Ratios!<\/p>\n

\n\n\n\n\n\n\n\n\n\n\n
BMO
\nRisk-Weighted Asset Ratios
\nOctober 2007
\n& April 2008<\/td>\n<\/tr>\n
 <\/td>\nNote<\/td>\n2007<\/td>\n2Q08<\/td>\n<\/tr>\n
Equity Capital<\/td>\nA<\/td>\n13,126<\/td>\n13,499<\/td>\n<\/tr>\n
Risk-Weighted Assets<\/td>\nB<\/td>\n178,687<\/td>\n186,252 <\/td>\n<\/tr>\n
Equity\/RWA<\/td>\nC=A\/B<\/td>\n7.35% <\/td>\n7.24% <\/td>\n<\/tr>\n
Tier 1 Ratio<\/td>\nD<\/td>\n9.51% <\/td>\n9.42% <\/td>\n<\/tr>\n
Capital Ratio<\/td>\nE<\/td>\n11.74% <\/td>\n11.64% <\/td>\n<\/tr>\n
Assets to Capital Multiple<\/td>\nF<\/td>\n17.17x<\/td>\n16.22x<\/td>\n<\/tr>\n
A is taken from the table “Issuance Capacity”, above
\nB, D & E are taken from BMO’s Supplementary Report
\nC is my calculation.
\nF is from OSFI (4Q07) and BMO’s Supplementary Report (2Q08)<\/em><\/td>\n<\/tr>\n<\/table>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

BMO has released its Second Quarter 2008 Report and Supplementary Package, so it’s time to recalculate how much room they have to issue new preferred shares – assuming they want to, in this environment! Step …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[25],"tags":[],"class_list":["post-2194","post","type-post","status-publish","format-standard","hentry","category-regulatory-capital"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/2194","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2194"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/2194\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2194"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2194"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2194"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}