The Bank of Montreal is looking to grow its mortgage book in Toronto, but is treading carefully as government rules aimed at cooling Canada’s hot housing markets start to take hold in some regions, a top banking executive says.

Cameron Fowler, BMO’s group head of Canadian personal and commercial banking, said it is early days, but a “modest” pullback is starting to emerge, most clearly in Vancouver, where the number of home sales has declined, though the impact on prices is still uncertain.

In Toronto, where BMO is undersized, however, volume and price continue to rise, Fowler said.

“We’ve been focused on making sure that for the right opportunities, and by that we mean primary customers for the right home with a long-term relationship, we’re looking to do more business in Toronto and the Toronto area,” he said at an event in Toronto on Tuesday kicking off the bank’s bicentennial celebrations. “And that’s quite important to us. It’s a market that’s moving, so we’re being careful about it.”

The real impact of the federal government’s new measures — which include forcing consumers with loans backed by Ottawa to prove they can handle a larger mortgage payment than the actual rate requires — won’t be clear until after the first and second quarters, Fowler added.

Fowler says BMO would like to see “a little moderation in this (Toronto) market as well. Which is why we are being particularly careful about the loans we are underwriting.”

“From an underwriting perspective, we’re pretty confident in the business that we write…. We are very confident with the book that we have now. We would like to grow our book,” Fowler added. “We’ll be competitive in the market, but this is the time to be watchful about where you’re playing.”

On the whole, Fowler said BMO is “supportive of the measures because a soft landing is in everyone’s interests.”

To commemorate its 200th year, BMO unveiled a interactive digital wishing fountain at First Canadian Place (before it travels to different cities) where people can make a virtual coin toss in person or online at BMO200.com. A number of these wishes, which can be made in a number of categories such as community and green initiatives, will be granted as a thank you to customers.

Financial Post