Magazine article American Banker

Bank of Montreal Seeking a Boost in Its U.S. Lines

Magazine article American Banker

Bank of Montreal Seeking a Boost in Its U.S. Lines

Article excerpt

Income from Bank of Montreal's U.S. operations tumbled in its second fiscal quarter, mainly because of huge losses in its commodity trading business.

But its Chicago retail banking unit, which is part of Harris Bankcorp Inc., also struggled with slowing loan growth, a falling net interest margin, and continued competitive pressure. The unit's profit for the quarter, which ended April 30, fell 4% from a year earlier and the previous quarter, to $24 million.

Bank of Montreal said that it is looking to improve that performance, and that it sees the pending sale of LaSalle Bank Corp. as an opportunity.

"It's happening at a time when we are really trying to ramp up our business banking franchise," Karen E. Maidment, Bank of Montreal's chief financial officer, said during a conference call with investors.

William Downe, the parent's chief executive, said Harris' commercial lending could get a boost. "The largest portion of LaSalle's business is commercial banking. We are strong in commerical banking, but it is underrepresented in our Harris business. That is where the growth opportunity is."

(Bank of America Corp. said last month it would buy LaSalle from ABN Amro Holding NV, though a Dutch court has halted that deal. Royal Bank of Scotland Group PLC has bid for LaSalle as part of a consortium of European banking companies trying to buy ABN Amro.)

Analysts said they were skeptical any lift from the fight for LaSalle would be lasting.

Brenda Lum, an analyst with DBRS Ltd. of Toronto, said a new owner for LaSalle might prove "more of a threat." B of A in particular "is a formidable competitor with huge economies of scale."

LaSalle has the second-largest deposit share in Chicago, with 14.1%, after JPMorgan Chase & Co., with 15.3%, according to the Federal Deposit Insurance Corp. Harris ranks third, with 9.3%.

Bank of Montreal has been investing in U. …

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