Bank of Montreal reports heavy commodity trading losses
BMO Financial Group, formerly the Bank of Montreal, said today that it has incurred second-quarter mark-to-market commodity trading losses estimated at between C$350 million ($313 million) and C$450 million ($403 million), pre-tax.
The losses have been incurred primarily on BMO’s natural gas trading book. A BMO statement cited poor liquidity and low volatility as factors contributing towards the losses, as well as a change in valuation procedures.
Bill Downe, president and CEO 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
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