Magazine article American Banker

Bank of Montreal: We'd Consider Partial Buys

Magazine article American Banker

Bank of Montreal: We'd Consider Partial Buys

Article excerpt

Bank of Montreal said Thursday that it would be open to buying partial stakes in banks as it expands its retail banking operations in the Midwest.

Bank of Montreal deputy chairman William Downe said that for Harris Bank of Chicago, "the model that makes most sense for our acquisition strategy is 100% ownership, but if there is a better way to enter a market and control risk," it would not be discounted.

"We can't be so dogmatic as to say we wouldn't do it," Mr. Downe said at Harris Bank's investor day in Chicago.

But whole acquisitions are Bank of Montreal's "strong preference," Mr. Downe said. A partial one would eventually have to become wholly owned by Harris Bank, he said.

Toronto-Dominion Bank bought a 51% stake in Banknorth Group Inc. in March, and it has renamed the Portland, Maine, company TD Banknorth Group Inc.

Bank of Montreal bought Harris in 1984 and has made a string of outright acquisitions in the Chicago area since then.

The $58.8 billion-asset Harris made its first acquisition outside Chicago in December, buying Mercantile Bancorp Inc. of Hammond, Ind., for $158 million. It has said it wants to expand in high-growth areas west of Mississippi and east of the Rocky Mountains.

According to June 2004 Federal Deposit Insurance Corp. data, the most recent available, Harris Bank is No. 3 in deposits in Chicago, with $12 billion (5.47% market share). The former Bank One (which was bought by JPMorgan Chase & Co. in July 2004) is No. 1 and the LaSalle Bank Corp. unit of ABN Amro Holding NV is No. 2.

Harris Bank announced on June 1 that it had consolidated its 26 charters into a national charter, regulated by the Office of the Comptroller of Currency, to complement its acquisition plans. …

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