TORONTO (Reuters) - Bank of Montreal (BMO.TO) said on Tuesday it has completed its $4.1 billion acquisition of Marshall & Ilsley Corp, which vastly expands the Canadian bank’s retail presence in the U.S. Midwest.
BMO, which operates in the U.S. through its Chicago-based Harris Bank unit, said M&I customers will begin to see the new BMO Harris Bank name, as the integration is completed over the next few months.
As part of the deal BMO is acquiring more than 350 M&I branches across the U.S. BMO had about 320 branches in the U.S.
“We intend to be the bank for business in the U.S. Midwest and we’ve signaled that with our commitment to extend $5 billion of new credit to small and medium-sized companies,” Chief Executive Bill Downe told Reuters.
Downe said one of the benefits of the M&I deal is it boosts BMO’s core deposit base, giving it momentum to increase its wealth management and investment banking businesses.
Canadian banks emerged from the global financial crisis in much better shape than many rivals and have been seeking growth opportunities abroad.
Just days after BMO announced its bid for M&I in December, its larger Canadian rival Toronto-Dominion (TD.TO) announced its plan to buy U.S. auto lender Chrysler Financial for $6.3 billion.
Canadian banks however have faced mixed fortunes with their forays in the United States.
Last month, Canada’s largest bank Royal Bank of Canada (RY.TO) chose to sell its loss making U.S. retail banking arm and credit card business to PNC Financial Services Group Inc (PNC.N) for $3.62 billion.
RBC sold its U.S. retail banking assets roughly a decade after entering the market through its acquisition of Centura Banks in 2001. The Canadian bank has struggled with credit losses in the United States following the economic downturn.
BMO is confident that its acquisition of M&I will help boost its growth. The bank has already forecast that the M&I deal, excluding restructuring and other costs, will slightly boost its fiscal 2011 earnings.
The Toronto-based bank is also pushing to expand its U.S. investment banking presence in a bid to take advantage of a rebound in merger and acquisition activity.
“The addition of M&I’s asset management and institutional trust businesses will increase our U.S. presence, add scale and bolster our global investment capabilities,” said Downe.
Reporting by Euan Rocha; editing by Carol Bishopric