SecProbe.io

May 16, 2013

Via E -mail
Thomas E. Flynn
Chief Financial Officer
Bank of Montreal
100 King Street West
1 First Canadian Place
Toronto, Ontario
Canada, M5X 1A1

Re: Bank of Montreal
 Form 40-F for the Fiscal Year Ended October 31, 201 2
Filed December 4, 201 2
 File No. 001 -13354

Dear Mr. Flynn:

We have reviewed your filing and have the following comments.  In some of our
comments, we may ask you to provide us with information so we may better understand your
disclosure.

Please respond to this letter within ten business days by amending your filing, by
providing the requested information, or by advising us when you will provide the requested
response.   If you do not believe our  comments apply to your facts and circumstances or do not
believe an amendment is appropriate, please tell us why in your response.

After reviewing any amendment to your filing and the information you provide in
response to these comments, we may have a dditional comments.

Form 40 -F for the Fiscal Year Ended October 31, 2012

Exhibit 99.2

Management’s Discussion and Analysis, page 24

Economic and Financial Services Developments in 2012, page 30

1. We note your disclosure that housing market activity and residential mortgage growth
slowed after the first half of the year in response to more restrictive mortgage rules  in
Canada, and tighter lending standards held back residential mortgage growth  in the
United States .  Please tell us and revise your future filings to disclose the significant

Thomas E. Flynn
Bank of Montreal
 May 16, 2013
 Page 2

 changes in the Canadian and U.S. mortgage rules during 2012 and the impact these rules
had on your underwriting process.

Critical Accounting Estimates, page 70

Goodwill and Int angible Assets, page 72

2. We note your disclosure for  the goodwill impairment test that if the carrying value were
to exceed the recoverable amount of the group you would undertake a more detailed
goodwill impairment assessment. We also note that the fair value  less c osts to sell was
used to perform your goodwill impairment test in 2012 and that the discounted cash flow
model used included assumptions related to synergies achieved on acquisition.   Please
address the following:

 Clarify for us what you mean when you state that “a more detailed goodwill
impairment assessment would have to be undertaken” when the carrying value of a
cash-generating unit (CGU) exceeds the recoverable amount and how this interacts
with paragraphs 90 and 104 of IAS 36 on recognition of  an impairment loss.
 Explain how you determined the synergies achieved on acquisition assumption would
be available to most market participants and as such is a valid assumption in the fair
value calculation.  In your response, address whether the inclusio n of this assumption
increases or decreases your value in the discounted cash flow model.

Credit and Counterparty Risk, page 80

Risk Rating Systems, page 80

3. We note your credit risk and risk rating systems disclosures here and on pages 135 and
136, and we note that the ratings correlate to a probability of default (PD) range.  Please
tell us and revise your future filings to clarify whether these risk rating systems are used
in your allowance calculation and if so, how you incorporate the ratings and the  PD range
into the specific and collective allowances.

Collateral Management, page 81

4. We note your disclosure that collateral is used for credit risk mitigation purposes and
minimizes losses that would otherwise be incurred.  You also state that on an o ngoing
basis , collateral is subject to regular valuation as prescribed in your governing policies
and standards.   We further note from your disclosure under “Allowance for Credit
Losses” on page 131 that the estimated future cash flows of a collateralized  loan reflects
the expected realization of the underlying security net of expected costs and any amounts
legally required to be paid to the borrower in your impairment analysis for individually
identified impaired loans.  Considering the value of the under lying collateral is a factor in
your impairment analysis , and you have policies and procedures in place to value it on a

Thomas E. Flynn
Bank of Montreal
 May 16, 2013
 Page 3

 regular basis , please tell us and revise your future filings to disclose your collateral
valuation policies and procedures.  In your disclosure,  address the following:

 Discuss how frequently you obtain appraisals for the underlying collateral for both
loan origination and loan impairment analysis and the type of appraisal obtained  (e.g.,
in-person full appraisals, drive -by appraisals o r automated valuation models
(AVMs) ).  If the type of appraisal differs by loan product or value, discuss those
differences .
 If AVMs or something similar is used to support property values, address the controls
and processes you have in place to validate t he valuations provided by the AVM.
 Tell us whether your valuation policies and procedures have changed during the
periods presented  and if so, disclose any significant changes.

Exhibit 99.3

Notes to Consolidated Financial Statements , page 124

Note 4:  Loans, Customers’ Liability under Acceptances and …., page 131

5. We note the disclosure on page 132 that the quantitative component for the collective
allowance model measures the long -run expected losses based on PD and loss given
default (LGD) risk parameters.  We also note your response  letter  filed on November 29,
2012 that while your collective allowance model calculates expected losses it also uses a
one year or seven month  loss emergence period, depending on the loan portfolio.  Please
confir m that you will revise your future filings to provide a discussion similar to the
response letter on how the expected loss calculation in your model is adjusted to an
incurred loss amount as required by IAS 39 , and provide us with proposed disclosure to
that effect .

Purchased Loans, page 133

6. We note your accounting policy for purchased performing loans and that $580 million of
your total credit mark for performing loans will not be amortized and will be recognized
in either net interest income or collecti ve provisions for credit losses as loans are repaid
or changes in credit quality occur.  Please  address the following:

 Tell us what the unamortized credit mark represents, and clarify whether the $580
million is an incurred credit mark.
 Clarify why this portion of the credit mark will not be amortized, and whether the
entire $580 million will ultimately be recognized regardless of the changes in
estimates for these loans.

Thomas E. Flynn
Bank of Montreal
 May 16, 2013
 Page 4

  Discuss the factors that you consider in determining whether to recognize this credit
mark in either net interest income or collective provisions.
 To the extent that this portion of the credit mark does represent an incurred credit
mark, tell us why you treat the revolving loans differently and amortize both the
incurred and future credit marks into net interest income for those loans.
 Finally, tell us the IFRS guidance you relied upon to account for  both the future and
incurred credit marks on purchased performing loans .

7. As a related matter, please tell us whether a portion of your purc hased performing loans,
including your loans with revolving terms, include an incurred credit mark at acquisition,
and if so, provide us with the IFRS guidance that you relied upon for the classification of
such loans as purchased performing.

8. You state t hat the remaining unamortized credit mark related to the purchased credit
impaired loans is recorded in the provision for credit losses during the period in which
the loan is repaid and the decrease  in this remaining credit mark from October 31, 2011
to Oc tober 31, 2012 was $764 million.  Please address the following:

 Tell us w hether the cash flows used to calculate the effective interest rate for your
purchased credit impaired loans include only  the incurred credit mark on this
portfolio  or both incurred and future credit marks .
 Tell us what the remaining unamortized credit mark represents in your purchased
credit impaired loan portfolio.
 Discuss whether you recognize this credit mark upon repayment to the extent that it
represents a change in expected cas h flows.   If it represents a recovery in expected
cash flows, tell us why you record this amount in the provision for credit losses as
opposed to net interest income.
 Reference the IFRS guidance that you relied upon for your accounting treatment of
the u namortized credit mark on purchased credit impaired loans.

9. Please provide us with a representative example of a purchased performing loan and a
purchased credit impaired loan so that we can better understand your accounting
treatment.  Include a discussion of your initial measurement and subsequent measurement
for both increases and decreases in expected cash flows for each of these loan types.   To
the extent that you bifurcate  the incurred and future credit marks for any of these
portfolios under IFRS, tell us the factors you consider and provide us with the general
size of the incurred and future credit marks for purchased performing and purchased
credit impaired loans.

Thomas E. Flynn
Bank of Montreal
 May 16, 2013
 Page 5

 10. Tell us whether you identified any differences between Canadian GAAP and IFRS
related to (i) purchased credit impaired loans and (ii) purchased performing loans.  If so,
please identify those differences, quantify the related effects, and explain where they
have been reflected in the reconciliation included within Note 30.

Note 30:  Transition to International Financial Reporting Standards, page 177

Explanation of Differences, page 179

11. You state under “(g) Loan Impairment” on page 180 that the measurement o f amount to
be written off under IFRS is different than Canadian GAAP as IFRS requires you to
include an estimate of future recoveries in your determination of the recoverable amount.
Please tell us whether the estimate of future recoveries is included in  your loan
impairment measurement or if it is a separate estimate calculated only at write -off.  Also,
provide us with the IFRS guidance you reference here that resulted in a change  from
Canadian GAAP for loan impairment.

We urge all persons who are respo nsible for the accuracy and adequacy of the disclosure
in the filing to be certain that the filing includes the information the Securities Exchange Act of
1934 and all applicable Exchange Act rules require.   Since the company and its management are
in poss ession of all facts relating to a company’s disclosure, they are responsible for the accuracy
and adequacy of the disclosures they have made.

 In responding to our comments, please provide  a written statement from the company
acknowledging that:

 the co mpany is responsible for the adequacy and accuracy of the disclosure in the filing;

 staff comments or changes to disclosure in response to staff comments do not foreclose
the Commission from taking any action with respect to the filing; and

 the company m ay not assert staff comments as a defense in any proceeding initiated by
the Commission or any person under the federal securities laws of the United States.

You may contact Lindsay McCord  at (202) 551 -3417  or Staci Shannon  at (202) 551 -3374
if you have any questions.

Sincerely,

 /s/ Stephanie J. Ciboroski

Stephanie J. Ciboroski
Senior Assistant Chief Accountant