- $16-billion buy is BMO’s greatest agreement ever.
- The bank states it will purchase Bank of the West, a U.S. aid of BNP Paribas.
BMO to purchase The Bank Of West:
Bank of Montreal (BMO) stated on Monday it will purchase BNP Paribas’ U.S. unit, Bank of the West, for $16.3 billion US in its greatest agreement ever, letting the Canadian lender double its impression in the world’s largest economy while giving France’s biggest bank a massive step up in firepower for agreements.
The agreement offers BMO, Canada’s fourth-largest lender, a large-scale presence in California, whose population is greater than the bank’s home nation. It will count 1.8 million clients and provide BMO with the ability to deploy nearly all of its surplus capital, which has been a damper on returns.
Analysts praised the agreement as a positive for BMO, which has created no mystery of its aims to make on its current presence in the United States. It has worked there for decades, from its purchase of Harris Bank in 1984 to agreements including its 2011 takeover of Marshall & Ilsley Bank.
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That market, however, has demonstrated increasingly unsuitable for European lenders, and BNP Paribas has been working to keep up with bigger retail banking contenders. Spanish bank Banco Bilbao Vizcaya Argentaria sold its U.S. operations in 2020 and HSBC Bank prior this year sold almost of its U.S. business, too.
For these banks, “their entire organization was what they sold,” BMO’s chief financial officer, Tayfun Tuzun, informed Reuters. Source – cbc.ca
“We already have a very sizeable presence in the U.S., and have been funding in that organization in expectation of a chance like this … This company has been on our radar screen for a long time.” Source – cbc.ca
Frosty currents, snow and maybe freezing rain is predicted for regions of B.C. – British Columbia Sun
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