The bank's Basel III Tier 1 and Total Capital Ratios were 11.4% and 13.7%, respectively, at April 30, 2013, compared with 11.1% and 13.4%, respectively, in the first quarter and 10.5% and 12.9%, respectively, on a pro-forma basis at October 31, 2012. The ratios improved from the year end due to higher CET1 capital and lower RWA, as described above, partly offset by the phase-out of non-common instruments that do not meet OSFI's Basel III requirements, including the non-viability contingent capital requirements, and the redemption of $200 million Class B Preferred Shares Series 5 and US$250 million Exchangeable Preferred Stock, Series A, both as described in Other Capital Developments.
BMO's Assets-to-Capital Multiple (ACM), a leverage ratio monitored by OSFI and calculated using the transitional total capital prescribed by OSFI, was 16.3 at April 30, 2013. BMO's ACM increased from 16.1 in the first quarter, and from 15.2 at October 31, 2012, on a Basel II basis primarily due to balance sheet growth and Basel III transitional modifications.
Additional details on the Basel III regulatory capital changes can be found in the Enterprise-Wide Capital Management section on pages 60 to 64 of BMO's 2012 Annual Report.
BMO's investments in U.S. operations are primarily denominated in U.S. dollars. Foreign exchange gains or losses on the translation of the investments in foreign operations to Canadian dollars are reported in shareholders' equity (although they do not attract tax until realized). When coupled with the foreign exchange impact of U.S.-dollar-denominated RWA on Canadian-dollar equivalent RWA, and with the impact of U.S.-dollar-denominated capital deductions on our Canadian dollar capital, this may result in volatility in the bank's capital ratios. BMO may hedge this foreign exchange risk by funding its foreign investment in U.S. dollars or, alternatively, to offset the impact of foreign exchange rate changes on the bank's capital ratios, may enter into derivatives contracts, such as forward currency contracts, or elect to fund its investment in Canadian dollars.
Other Capital Developments
During the quarter, 978,000 common shares were issued through the DRIP and the exercise of stock options. In the second quarter, we purchased four million shares under the bank's share repurchase program. The timing and amount of purchases under the program are subject to management discretion based on factors such as market conditions and capital adequacy. The bank only initiates purchases under the program after consulting with OSFI.
On January 24, 2013, BMO announced its intention to redeem all of its Non-cumulative Class B Preferred Shares Series 5; these shares were redeemed on February 25, 2013.
On April 30, 2013, we redeemed all of the US$250 million outstanding 7 3/8% Non-cumulative Exchangeable Preferred Stock, Series A, issued by Harris Preferred Capital Corporation, a U.S. subsidiary. These real estate investment trust preferred shares qualified as Tier 1 regulatory capital under Basel II and were, under Basel III, part of our non-qualifying capital subject to phase-out.
On May 29, 2013, BMO announced that the Board of Directors had declared a quarterly dividend payable to common shareholders of $0.74 per common share, unchanged from the preceding quarter and up $0.04 per share from a year ago. The dividend and share purchases reflect our strong capital position and the success of our business strategies.
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