SOURCE: The Bedford Report
Dec 20, 2010 08:46 ETNEW YORK, NY--(Marketwire - December 20, 2010) - Considered the "strongest banks in the world" in a report from the Bank for International Settlements, Canadian banks have been going on a spending spree this year.
The nation's largest banks did not require bailouts during the global financial crisis, and have been using their financial strength to buy out weakened banks and expand their global presence. The Bedford Report examines the outlook for Canada's largest banks and provides research reports on Bank of Montreal (TSX: BMO) and Bank of Nova Scotia (TSX: BNS). Access to the full company reports can be found at:
Canada's fourth largest banks, Bank of Montreal, made headlines last Friday when the company announced it was buying the Wisconsin lender Marshall & Ilsley (M&I) Corporation for $4.1 billion in an all-stock deal. Bank of Montreal says the deal adds to its position in the U.S. Midwest and more than doubles the branch network it runs through its Chicago-based Harris Bank unit. BMO says it expects to maintain "strong capital ratios" after the acquisition.
Shareholders and ratings agencies had a different take on the buyout. Moody's Investors Service said it may downgrade the company's credit rating due to "integration challenges." While integration challenges are a factor in any large acquisition, Moody's claims that "merger execution challenges are compounded by the fact that M&I has significant asset quality issues," was more cause for concern.
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The BMO/M&I deal sparked speculation that other strong Canadian banks will continue shopping for US Regional banks. BMO certainly hasn't been the only Canadian bank shopping globally. Earlier this year, Bank of Nova Scotia bought South America banking operations from both Commerzbank AG and Royal Bank of Scotland.
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The Bedford Report
The Bedford Report