The Canadian banking group has leveraged its substantial capital position to move into new geographies south of the border
BMO has taken another big step in its North American growth strategy, with a deal to acquire San Francisco-based Bank of the West from BNP Paribas.
The Canadian big six bank expects to fund the US$16.3 billion purchase primarily with excess capital, thanks to its strong reserves.
Bank of the West has more than 1.8 million customers and assets of approximately $105 billion (C$135bn) as of September 30, 2021. Around 70% of its deposits are in California, a market with rich potential for BMO.
This acquisition will add meaningful scale, expansion in attractive markets, and capabilities that will enable us to drive greater growth, returns and efficiencies," said Darryl White, BMO’s CEO. "We will deliver a highly competitive offering to new growth markets, combining the strength of our digital banking platform and a strong team of bankers to generate leading customer growth."
The 127-year-old Bank of the West has 514 banking branches, and commercial and wealth offices across 24 states with around 9,000 employees.
Upon closing, BMO intends to merge Bank of the West into BMO Harris Bank NA.
Perfect partners
David Casper, BMO’s group head, North American Commercial Banking and US CEO, says that Bank of the West is a well-run and well-respected organization with complementary capabilities, products, and segment expertise to BMO.
"Combining these strengths with BMO's proven track record of executing and integrating acquisitions will position us to leverage our capabilities to serve more personal, business, commercial and wealth customers. It's also a great opportunity to build upon our strong track record of engaging with communities where we operate," Casper said.
The transaction has been approved by the BMO and BNP Paribas Boards of Directors and is expected to close by the end of calendar 2022, subject to the usual approvals.
