One of the largest lenders to the trucking industry will be offering undefined measures to assist its clients as a result of the coronavirus pandemic.
BMO Harris Bank said in a press release Wednesday that it had introduced a “financial relief program for those impacted by COVID-19.” While much of the announcement by BMO — the former Bank of Montreal — dealt with individual retail customers, trucking was the only industry called out specifically.
“As the largest financier of trucks and trailers in North America, we are addressing the specific issues of this critical part of the economy,” BMO said in the statement. “Our goal is to keep trucks on the road and commerce flowing.”
A spokesman for the bank in a follow-up note said BMO is “working with our trucking clients on a case-by-case basis to help them through these challenging times.”
BMO has been a leading lender to the trucking sector since its acquisition of GE Transportation in 2015. But the group has been challenged in recent years, as was discussed on the company’s earnings call for the first quarter of 2020. On the call, Chief Risk Officer Pat Cronin referred to “specific weakness in transportation finance.
In the first quarter of 2020, which ended Jan. 31, BMO took C$29 million (just under U.S. $20 million) in provisions for credit losses in the transportation sector. That was up from C$23 million in the fourth quarter of 2019 and up from C$10 million in the first quarter of 2019.
The transportation group also took C$25 million in write-offs in the quarter, up just C$1 million from the prior quarter but up from C$12 million in the first quarter of 2019.
Gross loans and acceptances for the group were C$12.2 billion in Q1 2020. That was up from C$11.4 billion a year earlier so this is not an industry BMO is pulling away from.
“The financial relief program is tailored to each individual’s circumstances and needs, which could include deferral of payments and fee waivers on loans, mortgages and credit cards; fee waivers for checking and savings accounts; and other accommodations for BMO customers,” BMO said in announcing its plans.
For its commercial markets, the bank said it is in “regular contact with its corporate clients and taking the necessary steps to continue to provide the service they rely on with a minimal level of disruption.”
It was following that statement that BMO specifically cited its trucking sector, a distinction given to no other sector in the press release. That includes oil and gas, which was the focus of a great deal of analyst questioning on the late January earnings call.