Bank of Montreal increased its preferred share offering on Wednesday to $200 million, following other Canadian banks that have issued shares to reinforce their capital positions.

BMO, Canada's fourth-largest bank by market capitalization, announced the increase three hours after it said it would issue $150 million in preferred shares, citing strong investor demand.

It is now offering 8 million shares at a price of $25 each. Net proceeds will be used by the bank for "general corporate purposes," it said.

The bank said the offering will be underwritten on a bought deal basis by a syndicate led by BMO Capital Markets.

Underwriters still have an option to buy up to a further $75 million of the preferred shares, exercisable at any time up to two days before the expected closing date of March 20.

Canada's banks, which have been ranked as the world's soundest as the global financial crisis ravages their international peers, have been shoring up their balance sheets by issuing preferred and common shares.

Last week, Toronto-Dominion Bank increased the size of its preferred share issue to $275 million, though its chief executive predicted the need for further offerings would ease as customer loan demand weakens.

Shares of BMO were down 1.1 percent at $29.38 on the Toronto Stock Exchange on Wednesday afternoon.