BMO to shutter retail auto finance business as bad debt mounts

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BMO Financial Group says it will close its retail auto finance business in order to reroute resources following a rise in bad debt.

The Bank of Montreal also says the decision will trigger an unspecified number of layoffs in Canada and the U.S.

Those dents on the income statement hint at the financial strain facing consumers, who have struggled to cope with a spike in interest rates over the past year and a half. The Bank of Montreal's indirect retail auto loans segment works with car dealerships to arrange financing for car buyers, who in turn make monthly payments to those dealers. BMO's commercial banking business, which backs auto dealers through inventory financing, is unrelated to the upcoming shutdown.

 

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