SecProbe.io

August 14, 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
Response dated June 21, 2013
 File No. 001 -13354

Dear Mr. Flynn:

We have reviewed your response  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 providing the requested
information, or by adv ising us when you will provide the requested response.   If you do not
believe our  comments apply to your facts and circumstances, please tell us why in your response.

After reviewing the information you provide in response to these comments, we may
have  additional comments.

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

Exhibit 99.2

Management’s Discussion and Analysis, page 24

Critical Accounting Estimates, page 70

Goodwill and Intangible Assets, page 72

1. You state in your response to prior comment 4 that the Canadian Mortgage Housing
Corporation (CMHC) automated valuation model (AVM) service is used for residential
mortgages that are below a certain threshold and have a loan -to-value (LTV) ratio within

Thomas E. Flynn
Bank of Montreal
 August 14, 2013
 Page 2

 a specified range.  We further note that you test the output of this AVM model by taking
a sample of existing valuation assessments and running them through the AVM model to
determine if the output from the model is consistent with the other valuation process .
Please address the following:

 In future filings, disclose the specific threshold and LTV ratio range that determines
your use of the CMHC AVM given that the threshold for use of AVM is also driven
by the AVM output because the LTV is based upon the AVM  valuation of the
underlying property.

 Confirm that in future filings you will disclose how you validate the valuations
provided by the AVM, including a description of the “existing valuation assessments”
and “alternative means” that you utilize for deter mining that the output from the
AVM was consistent with your valuation findings.

Exhibit 99.3

Notes to Consolidated Financial Statements , page 124

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

Purchased Loans, page 133

2. Refer to your response to prior comment 6.   We note that the incurred credit mark for
purchased performing loans represents the estimate of future cash flows that are not
expected to be collected on the acquired portfolio of purchased performing loans based
on incurred but not specifically identified losses inherent in the portfolio.   Please tell us
the following related to your purchased performing loan portfolio:

 How you differentiate between loan pools with incurred losses and those pools
without incurred los ses within this portfolio.

 We note your response to prior comment 8 that you performed a detailed review of
the risk rating of the purchase performing loans at acquisition and based on this
review , you  determined the incurred losses in the portfolio that have not been
identified within individual performing loans.  Tell us the other characteristics, such
as past due status, you relied upon in determining the loan pools with incurred losses.

 Discuss whether the loans with incurred losses were purchased at a discount due to
credit quality , and clarify how the incurred credit losses are reflected in the price.

 Tell us whether the effective interest rate you calculated on the purchased performing
loans with incurred losses is equivalent or similar to a mark et yield.   To the extent
that the effective interest rate is not, tell us why, and how you concluded that the

Thomas E. Flynn
Bank of Montreal
 August 14, 2013
 Page 3

 effective interest rate determined for these loans is consistent with the guidance in
paragraph BC 32 of IAS 39.

3. Refer to your response to prior comment 6 regarding revolving credit facilities and where
you state that since you have committed to lend at any time, amortizing the total interest
rate mark and credit mark to income on a straight line basis over the term of the facility
best reflects yo ur standby obligation.  Please respond to the following:

 Tell us how you concluded that it was unlikely that specific lending arrangements
will be entered into and the loan commitment is outside the scope of IAS 39 for all
acquired revolving balances.  In  this regard, if it was probable that you will enter into
a specific loan arrangement, and the loan commitment is not within the scope of IAS
39, then the commitment fee is deferred and recognized as an adjustment to the
effective interest rate.  In your r esponse, provide quantitative information regarding
the undrawn facilities for which you think usage is probable versus unlikely to occur.

 For revolving loans that had an existing balance at acquisition, tell us why you did not
use the effective interest rate guidance outlined in IAS 39.9.

 Separately quantify the amount of the discount related to credit and interest rates on
the revolving loans .

 Tell us why you are amortizing the total interest and credit marks on a straight -line
basis over the term of  the facility as opposed to the expected life of the loan.

4. You state in response to prior comment 8 that your credit mark on purchased credit
impaired loans was only an incurred credit mark.  Please confirm for us that in your
determination of this incurr ed credit mark you did not consider events expected to occur
in a future period.

5. We note from your response to prior comments 6 and 8 that your accounting policy for
increases in the estimated cash flows of the acquired loans subsequent to acquisition is
different for purchased performing loans and purchased credit impaired. For purchased
performing loans, an increase in the estimated cash flows would be recorded to the
provision only up to the amount of cumulative collective allowance recorded on this
portfolio and any additional increase is recorded as net interest income.  However, for
your purchased credit impaired loans, all subsequent increases in estimated cash flows
are recoveries to the provision.  Please address the following:

 Explain why you hav e two different policies for your purchased performing and
purchased credit impaired loans considering at acquisition neither portfolio has an
allowance and the increase in estimated cash flows recorded through the provision
when there is no subsequent all owance would result in a negative allowance for both

Thomas E. Flynn
Bank of Montreal
 August 14, 2013
 Page 4

 portfolios.

 In future filings, clearly disclose the amount recorded in the provision as a recovery
due to  increases in estimated cash flows for the purchased credit impaired portfolio.
Separately, disc lose the amount of net interest income and reduction in the provision
recorded during  the period for improvements in the cash flows of the purchase d
performing loans.

6. As a related matter, you disclosed on page 40 of Exhibit 2 that the adjusted provision for
credit losses (PCL) excludes provisions related to the Marshall & Ilsley Corporation
(M&I) purchased performing loan portfolio, and included in the adjusted PCL in 2012
was a recovery of $509  million related to the M&I purchased credit impaired loan
portfolio.  Please tell us why you include the recoveries related to the M&I acquired loans
portfolio in your adjusted PCL, but do not include the provisions.  In future filings,
consider revising your adjusted PCL calculation to be consistent in amounts inc luded or
excluded related to the M&I acquired loan portfolio.

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