Bank of Montreal disclosed Thursday that trading losses due to bad bets on its natural gas trading portfolio have surged to $680 million from its initial report of $450 million.

The bank said it will take $509 million of the losses in its first quarter, and $171 million in its second-quarter results. The bank's restated first-quarter results and its second-quarter financial statements will be released May 23.

BMO said it is continuing to investigate the trading losses, including a review to determine whether any irregularities in trading and valuation took place.

Shares of BMO fell 30 cents to close at $69.40 on the TSX.

"Since our initial announcement on April 27, BMO and our external advisers have continued to investigate this matter," said Bill Downe, the bank's president and CEO.

"This has provided additional insight into the current circumstances, helped guide the actions we have taken and those we will take going forward. BMO has reduced the risk in this portfolio by approximately a third from its peak," he said in a statement.

After the bank initially revealed the trading losses on April 27, BMO suspended its relationship with the brokerage Optionable Inc., pending the results of an external review.

Two BMO commodity executives were placed on leave after the April report. The bank said Thursday the two are no longer employed there.

When the losses were revealed last month, BMO said its positions in the energy market, primarily for natural gas, were negatively affected by changes in market conditions. BMO said the market had become increasingly illiquid and volatility dropped to historically low levels.