BMO to issue at least $1B in new stock

Three-month BMO trading on the TSX

The Bank of Montreal has become the most recent of the big banks to sell new stock to improve its balance sheet.

After the market closed, the bank said it has a deal to sell 33.3 million new shares for $30 each, to raise about $1 billion. If the underwriters exercise an option to purchase an extra 3.3 million shares, the bank will raise about $1.1 billion.

After the issue, expected to close Dec. 24, and other recent share transactions, the bank's key Tier 1 capital ratio will be 10.4 per cent.

"Strengthening our capital ratio is prudent and supports continued growth and investment in the business as well as our ongoing commitment to our customers," Bill Downe, president and CEO, said in a news release.

The bank's stock fell $1.01 to $32.57 in Toronto trading Monday. The 52-week range is $29.10 to $59.35.

The Toronto-Dominion Bank raised about $1.4 billion and the Royal Bank up to $2.3 billion with share issues announced since Nov. 24.