Trucking credit metrics at BMO slide as the business gets smaller

Core Insights - BMO's transportation unit is experiencing a decline in credit metrics and a shrinking business size, primarily due to challenges in the North American trucking industry [1][2]. Group 1: Business Performance - The gross loans and acceptances in the transportation sector for the fourth quarter ended October 31 were just under CAD$13 billion (approximately $9.31 billion), down from $13.7 billion in the third quarter and $14 billion in the second quarter [3]. - The peak of the transportation sector's business was recorded at $15.6 billion in the fourth quarter of 2021, marking a significant decline over the past two years [4]. Group 2: Credit Metrics - The transportation sector at BMO, which primarily serves trucking company clients, has seen a substantial increase in negative credit metrics, with allowances for credit losses rising dramatically from $8 million in the third quarter of 2022 [5]. - The current credit metrics indicate a concerning trend, as the size of write-offs, allowances, and impairments has been increasing alongside the freight recession [1][2].