BMO CEO sees doubling of U.S. customer base
TORONTO • Bank of Montreal can double its U.S. customer base in five years without further acquisitions by its Chicago-based BMO Harris Bank unit, chief executive officer William Downe said.
“Five years is a good time frame,” Mr. Downe said Tuesday in an interview after the bank’s annual investor meeting in Toronto. “I do expect we’ll grow faster than the market, and that’s one place where we have an advantage.”
A recovery in the U.S. economy along with the lender’s investment in its BMO Harris Bank’s branch network and “deadly accurate” brand placement will help drive growth, he said.
Bank of Montreal has 600 branches serving about three million customers in the U.S. Midwest, Mr. Downe said in a speech at the event. U.S. personal and commercial banking is growing in step with, or ahead of, local markets, he said, and its existing U.S. unit has the capacity to serve more customers and gain market share. “With strong organic growth, we continue to believe we have the opportunity to double our U.S. customer base,” Mr. Downe said.
Bank of Montreal, Canada’s fourth-largest lender by assets, doubled its U.S. branches when it bought Milwaukeebased Marshall & Ilsley Corp. for $4.1 billion in July 2011, the biggest acquisition in its 197-year history. The company last year earned more than 60% of annual profit from personal and commercial banking, with about a quarter of that from the U.S.
Mr. Downe said he doesn’t see any gaps in Bank of Montreal’s operations that need rounding out through acquisitions. The firm’s last large acquisition was the $1.29 billion purchase in May of F&C Asset Management Plc, which runs the oldest U.K. investment fund. Mr. Downe said he wouldn’t discount further asset-management deals even as the focus is on internal growth.
“Our focus is on growing our business organically and unless something really attractive became available, we probably wouldn’t spend a lot of time on it,” Mr. Downe said.