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With M&I under its belt, Downe envisions the Canadian company buying more Midwestern banks, broadening its wealth management business and attracting more U.S. investors.
July 6 -
The No. 1 brand in American Banker's 2011 survey of bank reputation has thrown down the gauntlet, not just to the 29 other banks it will face off against on next year's list, but to itself.
May 22 -
Bank of Montreal will drop the Marshall & Ilsley name when it combines the troubled Wisconsin lender with its existing U.S. retail unit this summer.
April 6 -
An unexpected development like Friday's news — the takeover of one of the 50 biggest banks in the U.S. — may become increasingly common in 2011, experts say.
December 17 -
The deal values M&I at 1.26 times its annual revenue and has a price-to-book ratio of 0.61% for M&I, which BMO risk chief Thomas Flynn described as "attractive multiples."
December 17
Buying Marshall & Ilsley Corp boosted Bank of Montreal's fiscal third-quarter profit, though the Toronto bank said it does not expect to start expanding loans in the U.S. until 2012.
Bank of Montreal's year-over-year net income rose 18%, to $800 million, in the May-to-July period, aided by its $4 billion purchase in July of M&I.
M&I, of Milwaukee, which has been merged with Chicago's Harris Bank and renamed BMO Harris Bank NA, reported profit of $32 million and revenue of $118 million.
Expanding in the U.S. offset anemic growth in Canada, with the $530 billion-asset lender's stateside push also helping double its capital markets profits and substantially boosting wealth management income.
Still, organic growth in the U.S. remains tough to come by, executives said on a call with analysts.
Bank of Montreal closed the purchase of M&I in July and expects to finish integrating it in 2013, when it should begin delivering more than $300 million of annual cost savings.
M&I added $29 million of loans in the quarter.
It had just over $35 billion at the end of March.
The results reflected a $3.5 billion writedown, runoff of real estate loans, modest loan sales and a slowdown in auto lending.
Mark Furlong, the former chief executive of M&I and the CEO of BMO Harris, said on the call that U.S. commercial loans may increase later this year but "all-in," or total, U.S. loans may continue shrinking into 2012 on runoff of old M&I construction and consumer loans.
Utilizations on business loans at both M&I and Harris declined in the quarter in part because of seasonal factors, to around 50% each, Furlong said.
Surjit Rajpal, Bank of Montreal's executive vice president and chief risk officer, said the company is "very comfortable" that its $3.5 billion loan mark on M&I was the appropriate size.
The U.S. real estate market is "down quite considerably" but should be "at the bottom" unless "something catastrophic happens," Rajpal said.
