Bank of Montreal, National Bank May Take Writedowns (Update2)

Bank of Montreal and National Bank
of Canada may compose down a concerted C$1 billion ($1.05 billion)
for investings in asset-backed securities, adding to the C$787
million in writedowns already announced by Canadian banks,
Scotia Capital analyst Kevin Choquette said.

Depository Financial Institution of Montreal, Canada's fourth-largest bank, may write
down as much as C$500 million for its investings in commercial
paper and structured investing vehicles, Choquette said in a
note to investors today. National Bank, the No. Six bank, could
write down C$500 million for its commercial paper holdings.

National and Depository Financial Institution of Montreal are the lone loaners among
Canada's six greatest that haven't disclosed any additions or charges
for the one-fourth ended Oct. 31. Royal Depository Financial Institution of Canada, Depository Financial Institution of
Nova Scotia and Canadian Imperial Depository Financial Institution of Commerce have
announced writedowns in the past hebdomad to reflect reduced values
for asset-backed securities and mortgage-backed debt.

The two banks, the worst acting depository financial institution pillory in Canada
this year, may take the greatest hits. Montreal-based National
Bank agreed in August to purchase back C$2 billion in commercial
paper held by clients in its common funds. The value of the
securities plunged after the marketplace for this debt sold by non-
bank traders froze on concerns about possible golf course to the U.S.
subprime mortgage market. A C$500 million writedown would
indicate a decrease of about 25 percentage in the value of the
assets.

Commercial Paper

Toronto-based Bank of Montreal may take writedowns for its
non-bank commercial message paper and for its retentions in structured
investment vehicles, which borrow in the short-term commercial
paper marketplace to put in longer-dated securities ranging from
mortgage chemical bonds to depository financial institution debt.

''The potentiality magnitude of the writedown is hard to
ascertain but could be as high as C$500 million,'' Choquette
wrote.

Depository Financial Institution of Montreal spokesman Ralph Marranca and National Bank
spokesman Denis Dube declined to comment. Depository Financial Institution of Montreal
reports consequences on Nov. 27, while National Depository Financial Institution studies Nov. 29.

Unlike the other four banks, National and Depository Financial Institution of Montreal
won't be able to countervail the costs with additions from the
restructuring of credit-card issuer Visa Inc. Depository Financial Institution of Montreal
and National offering MasterCard Inc. cards.

DundeeWealth Inc., the Toronto-based owner of Dynamic
Mutual Funds, today wrote down the value of its asset-backed
commercial paper retentions by C$57.6 million, or about 15
percent. Further writedowns may be required, the company said. The writedown contributed to a third-quarter loss of C$121.4
million, or C$1.06 a share.

Depository Financial Institution of Montreal shares drop 50 cents to C$57.53 in 4:10
p.m. trading on the Toronto Stock Exchange and have got fallen 17
percent this year. National Depository Financial Institution rose 15 cents to C$52.23, and
is down 21 percentage on the year.

To reach the newsman on this story:
Sean B. Boris Pasternak in Toronto at .