Bank of Montreal has joined several other Canadian banks in announcing that it will take a fourth-quarter charge as a result of the credit crunch in the U.S.

The bank expects pre-tax writedowns for the period of about $320 million in total, which will cut Q4 earnings by about 50 cents a share, BMO said in a release.

BMO Financial Group said it would be hit by a $170-million pre-tax charge related to trading and structured credit-related positions and preferred shares and a $135-million pre-tax cost from its exposure to Canadian asset-backed commercial paper. The remaining $15-million writedown is related to losses from a $70-million investment in structured investment vehicles (SIVs), which borrow in the short-term commercial paper market to invest in longer-term vehicles.

After taxes, the writedowns will total approximately $210 million.

The bank added it would also see a pre-tax charge in its Canadian retail banking segment of $185 million, or $120 million after tax, related to its increased liability for future customer redemptions in its new loyalty MasterCard rewards program, following the sale of the credit card company.

As well, it would see losses of approximately $25 million before taxes in its Capital Markets division, as a result of its move to shrink its commodities portfolio. After taxes, the loss would be $15 million.

However, the litany of losses would be softened by a $110-million pre-tax gain to its Personal and Commercial Banking Canada segment from the sale of MasterCard International Inc. shares.

The commercial paper- and SIV-related writedowns were smaller than expected by Scotia Capital analyst Kevin Choquette, who had predicted a $500-million charge in a Wednesday note to clients.

BMO's losses were also narrower than the similar charges expected by RBC and CIBC earlier this week – $360 million and $463 million respectively – but were significantly higher than Bank of Nova Scotia's forecasted $190-million writedown.

BMO's fourth-quarter results will come out on Nov. 27.