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Sep 18, 2023 • 4 min read

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Bank of Montreal Auto Finance Division Shut Down:

The Bank of Montreal (BMO), Canada's third-largest bank, announced its decision to shut down its indirect retail auto finance business, which will result in job losses. This division operated in both Canada and the U.S., offering car financing through partnerships with dealerships.
This decision followed a spike in BMO's bad debt provisions, which jumped to $492 million this quarter from $136 million the same time last year. This increase is attributed to the challenges consumers face with rising borrowing costs. BMO's move aims to channel resources into its strongest sectors.
For those impacted by the closure, the bank promises support. Dealers have been informed that agreements have closed September 15th, though contracts approved before this date will be honored. As of July, BMO had a $104 billion consumer loan portfolio, of which home equity loans made up $54.7 billion. The majority of the remaining loans are auto-related.
Given the Bank of Canada's data indicating higher vehicle loan delinquency rates post-pandemic and the challenges from high-interest rates, banks, including BMO, are bracing for more bad loans. BMO has been expanding in the U.S., recently acquiring Bank of the West for $16.3 billion. Now, the U.S. contributes to over a third of BMO's total profits.

Google's Gemini AI:

Google is in the advanced stages of testing its new conversational AI software named Gemini with a select group of companies. This initiative is seen by many as Google's answer to OpenAI's prominent GPT-4 model. Gemini, described as a suite of large-language models, boasts a broad array of capabilities.
These range from powering chatbots to generating user-specific content such as email drafts, music lyrics, and news articles. Additionally, it's designed to aid software engineers in coding and can produce original images based on user requests. Testing developers currently have access to a version of Gemini.
Google's intention is to eventually offer this software through its Cloud Vertex AI service. In related advancements, Google recently integrated generative AI into its Search tool for users in India and Japan, allowing it to produce text or visual results in response to user prompts. Furthermore, the tech giant has made its AI-powered tools available to enterprise customers, pricing them at $30 per user per month.

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