SVNX news tonight>Canada's Bank of Montreal launches wireless banking
By Ian Karleff
TORONTO, Feb 1 (Reuters) - The Bank of Montreal (Toronto:BMO.TO - news) on Tuesday became the first bank in Canada to offer its clients wireless banking and trading through its VEEV product, which marks the first commercial use of Canada's 724 Solutions Inc. (NasdaqNM:SVNX - news) wireless technology.
The bank's announcement is a quick endorsement of the feasibility of 724 Solution's technology which configures information into a readable format for cellular phones and personal digital assistants.
Investors were dazzled by 724 Solution's potential on Friday when it made an initial public offering and the stock gained 176 percent in the first day of trading.
''We think it (VEEV) is quite a breakthrough. It's very high profile, and very high priority for us,'' Jeffrey Chisholm, the Bank's vice-chairman, personal and commercial client group, told Reuters in a telephone interview.
The Bank of Montreal -- the country's fourth largest by assets under management -- has about 200,000 Investorline discount brokerage accounts that will be able to trade stocks, access bank accounts and transaction details, pay bills and receive news through Bell Mobility cellular phones.
And the bank has more than 1 million customers who bank electronically, and who could potentially use the VEEV service, plus about 800,000 clients at its Harris Bank subsidiary in Chicago.
Chisholm said the Bank of Montreal is the first of Canada's Big Six banks to come to market with ''comprehensive access to financial services.''
The bank's announcement comes only days after 724 Solutionssold 6 million shares to an investment community hungry for a promising story in the field of wireless technology.
724 Solutions' shares hit an intraday high of 79-4/16 when they started trading on January 28, and closed the day with a 176 percent gain from their $26 offering price. They closed down 2-3/8 at 65-1/2 in New York on Tuesday.
724 Solutions' public offering makes the Bank of Montreal's 3.4 million shares, or 9.7 percent stake in the company, worth $222.7 million, up from an initial investment of $2 million.
Other investors in 724 Solutions include Citigroup and Bank of America Corp. (NYSE:BAC - news). They, along with Wells Fargo & Co. (NYSE:WFC - news), are licensed users of the technology and are expected to initiate pilots during the first quarter of 2000, with roll-outs expected by the end of the year.
Bank of Montreal's Chisholm acknowledged that VEEV would not directly generate profits for the bank, but said it could attract more business in the long term.
''By serving the customer on their terms, and they consolidate more business with you, clearly you will make an incremental profit,'' said Chisholm.
($1=$1.45 Canadian) (Ian Karleff, Reuters Toronto Bureau 416-941-8102 e-mail toronto.newsroom@reuters.com))
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Wells Fargo & Co (NYSE:WFC - news)
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