Fitch Ratings has affirmed all ratings for the Bank of Montreal, with a stable outlook.

The international ratings agency said that its affirmation of BMO’s ratings reflects the company’s diversified franchise and continued solid financial performance. “BMO possesses respectable retail market shares in Canada and an established U.S. presence anchored by Harris Bankcorp Inc.,” it noted. “Core financial performance is sound, underpinned by solid earnings generation and asset quality. BMO has registered improvements in efficiency over the past three years.”

“The extended low interest rate environment and relatively flat yield curve have produced a moderate amount of margin compression for BMO,” Fitch said.

However, it adds, “The company’s solid credit-risk management is evidenced by consistently low credit costs that continue to compare favorably with its large Canadian peers. Net credit losses totaled 25 basis points of loans in 2004 and 2005. Gross impaired loan levels are manageable at 57 bps of loans as of Oct. 31, 2005.

“BMO’s capital levels remain sound and in line with its domestic peers. Good earnings retention boosted the Tier 1 risk-based capital and tangible common equity to tangible assets ratios to 10.25% and 4.04%, respectively, at fiscal year-end 2005,” it concludes.