BNP Paribas has confirmed it has secured all regulatory clearances necessary to complete the previously announced sale of Bank of the West to Bank of Montreal.
The deal is expected to be completed on February 1st.
Bank of Montreal agreed in December 2021 to acquire Bank of the West, a US subsidiary of BNP Paribas, for $16.3 billion in its largest-ever transaction, allowing the Canadian lender to treble its footprint in the world’s largest economy and providing BNP a massive boost in its financial clout.
BNP Paribas, France’s largest listed bank, said the transaction will free up 11 billion euros in capital, of which 4 billion euros would go back to shareholders via a planned share buy-back.
The acquisition is expected to provide BMO with a substantial footprint in California, hence increasing client growth in a major attractive area in the United States.
Once the transaction is finalized, BMO will acquire roughly 1.8 million commercial, retail, wealth management, and business banking customers from Bank of the West, as well as about 9,300 Bank of the West staff.
With the aid of billions of dollars in spare capital, Canada’s top six banks control the majority of domestic banking operations and have accelerated their development into the more fragmented U.S. market. The cash-rich Canadian banks are currently seeking growth prospects in new North American markets, outside of their largely saturated domestic market.