Bank of Montreal (BMO) is discontinuing its retail auto finance business in Canada and the United States 

This decision is driven by an increase in bad debt provisions in the retail trade sector, which reached C$81 million in the latest quarter, compared to a recovery of C$9 million a year ago 

The move aims to reallocate resources to areas where the bank believes it has a stronger competitive position 

The bank has not disclosed the exact number of job losses resulting from this shift in focus 

BMO is committed to providing support to affected employees during the transition 

The termination of dealer agreements in the auto finance business became effective on September 15, but the bank will honor contracts submitted and approved prior to that date 

BMO's indirect retail auto finance business involves providing financing to vehicle sellers rather than directly to buyers 

Gross loans in the retail auto business grew by approximately 34% year-over-year to C$17.36 billion in the third quarter 

Rising interest rates are negatively impacting the Canadian economy, leading banks like BMO to set aside more funds for expected bad loans 

BMO has been focusing on growth opportunities in the United States, including its acquisition of Bank of the West, which now contributes significantly to its overall profits