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BMO closes US$16.3B Bank of the West deal

by News Desk
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BMO Financial Group says it has been more than 13 months since it first announced its US$16.3 billion acquisition of Bank of the West.

The closing of the transaction will add about 1.8 million customers and 500 branches to BMO, according to the bank, leaving a footprint in 32 states on top of its current U.S. presence.

Erminia (Ernie) Johannson, head of the North American Personal and Business Banking Group, said the deal will give the bank the scale it needs to compete and grow.

Among other benefits, she says, a larger operation will help banks make better use of their technology, while increasing the likelihood of testing products and services in different markets.

The deal comes amid heightened regulatory scrutiny of US acquisitions and the banking sector more generally, but Johannson believes he has the scale to handle both competition and the changing regulatory environment. said to be important.

The closing will also come amid growing concerns about the near-term economic outlook amid rising interest rates and high inflation, but Johansson said the bank remains confident the deal makes sense. says.

“Yes, the market is shifting, but this is a long-term strategy and also a short-term strategy for all the economic environment changes that occur.”

Growing economic uncertainty has prompted Canadian regulators to raise capital requirements for banks and BMO to raise funds through both equity issuance and dividend reinvestment programs.

While there are many priorities to balance and manage, Johansson said he had a year to prepare for the Bank of the West integration.

“Don’t get me wrong, these are complex tasks. But we have it planned and ready.”

This report by the Canadian Press was first published on February 1, 2023.

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