* BMO bulks up U.S. wealth management arm
* Price not disclosed
* Analyst says deal is positive for BMO
TORONTO, April 12 (Reuters) – Bank of Montreal has
agreed to buy Portland, Oregon-based advisory firm CTC
Consulting LLC to augment its wealth management business
catering to ultra-high net worth clients, the bank said on
Thursday.
BMO, Canada’s No. 4 lender, said it will merge CTC with its
Harris myCFO advisory business, which is a segment of its
substantial presence in the U.S. Midwest. Ultra-high net worth
clients generally have a net worth of at least C$10 million ($10
million).
Financial terms of the deal were not disclosed. BMO expects
it to close during the second quarter
“CTC Consulting’s strong client focus aligns perfectly with
BMO and complements our existing ultra-high net worth investment
offering by strengthening our manager research and advisory
capabilities, especially in the area of alternative
investments,” said Gilles Ouellette, CEO of BMO’s private client
group.
Moody’s senior financial services analyst David Beattie said
he viewed the acquisition as positive for BMO.
“The deal, while not financially material, is a good product
extension to their U.S. wealth management initiative,” Beattie
said in an email.
The purchase was the second such deal in the last three
weeks by a Canadian bank looking to bulk up its global wealth
management arm. In late March, Royal Bank of Canada said
it will buy some overseas divisions of the Coutts private
banking business from Royal Bank of Scotland, giving RBC
access to high net worth individuals in fast-growing emerging
markets.
Beattie said global wealth management is an attractive asset
class for Canada’s banks, which have strong capital ratios
compared with international competitors and whose profitable
Canadian banking businesses face slower growth.
“Wealth management is low risk, and has low capital
intensiveness, with stable higher growth earnings potential
driven by positive demographics,” he said.
BMO shares were up 22 Canadian cents at C$58.47 at midday on
Thursday alongside broadly stronger Canadian bank shares in a
rallying Toronto market.
