The rumour mill is on fire lately - this time it’s BMO in the hot seat, with whispers of a potential $1B sale of its transportation finance division floating around. At ~$14B, the segment is a small portion of its commercial loan book (~4%)…

… but it punches above its weight in terms of credit impact when times are tough, given the cyclicality of the industry.

With credit quality deteriorating in recent quarters…

… and a number of challenges still plaguing the trucking industry, it’s likely BMO wants to stop the bleeding and refocus the portfolio on something less capital intensive.

You might be interested in…

About Bullpen: Bullpen Finance Inc. publishes content on Canadian markets and provides paid research coverage of select Canadian issuers. Bullpen is paid in cash by covered issuers, does not accept stock or options, does not hold positions in covered securities, and does not conduct investment banking business. Bullpen and LodeRock Advisors Inc. are affiliated; LodeRock provides investor relations services to issuers, some of whom are covered by Bullpen Research. When a post discusses a covered issuer, a specific disclosure appears at the top of the post. This post is published for general information purposes. It is not personalized investment advice and is not tailored to any individual reader’s circumstances. Bullpen is not a registered investment adviser or dealer. For full disclosures, including analyst certification, jurisdictional statements, and conflict of interest policies, please see our Legal & Disclosures section on our website.