BMO to Acquire BNP Paribas’ U.S. Unit for $16 Billion

Bank of Montreal announced its plans to purchase BNP Paribas’ U.S. Unit, Bank of the West, at a price of $16.3 billion. This is the lender’s largest deal ever, enabling it to expand its presence in the world’s most developed economy.

Thanks to the deal, BMO will increase its footprint in California, adding 1.8 million new customers, as well as enlarging the United States’ contribution to total adjusted pre-provision, and pretax profits to 44% from 36% in the fiscal year of 2021.

According to analysts, the deal is positive for Canada’s fourth-largest lender, which has already operated in the U.S. since 1984. However, the deal comes at a point where President Joe Biden’s administration is forcing regulators to be stricter with mergers after concerns that declining competition is negatively affecting everyday Americans.

bmo-us-expansion

Darryl White, CEO of BMO, told investors that he doesn’t see a sensible reason the bank won’t be allowed to expand by U.S. regulators. 

The acquisition will help BMO to additionally decrease its low exposure to the Canadian household sector, while simultaneously profiting off the prospective U.S market, as per Edward Jones analyst James Shanahan.

Executives at BMO say they anticipate significant revenue synergies after the deal, which is yet to be evaluated in the upcoming weeks.

ABOUT AUTHOR

With an early start in journalism and years of work as a technical translator, Marija felt it was natural to blend the two. Passionate about news and research, she enjoys sifting through the data, researching new currents and the constant changes in our technologically and financially driven lives, as well as presenting the stats and facts to the readers so you don’t have to dig deep on your own.

Latest from this author

What Is an Assignment Sale? An All-Around Guide What Is a PC Money Account? A Detailed Guide for 2022 Best Business Credit Card in Canada: The Ultimate Selection How to Buy Crypto With a Credit Card in Canada?

Leave a Reply

Your email address will not be published.