April 12 (Reuters) - Canada's Bank of Montreal said
on Monday it has agreed to sell its EMEA asset management
business to Ameriprise Financial Inc for C$1.1 billion
($870 million) in an all-cash transaction to increase its focus
on North America.
Canada's fourth-largest lender will take a C$745 million
write-down of goodwill after tax in the second quarter of fiscal
2021 as a result of the transaction, which is expected to close
in the fourth quarter of calendar 2021, BMO said.
It joins a clutch of banks globally that are looking to
either sell or merge their asset management units to gain scale.
BMO itself sold its private banking business in Hong Kong and
Singapore in January, joining Canadian counterparts which have
been offloading non-core operations outside North America.
"Concentrating on the North American market, and Canada in
particular, is the right strategic decision," analysts at CIBC
Capital Markets wrote in a note. "The goodwill charge and
limited earnings impact from the sale suggest that the
international asset manager has seen declining profitability
BMO shares gained 0.1% to C$115 in morning trading in
Toronto, versus a 0.15% decline in the Toronto stock benchmark
The bank's overall wealth management business managed
C$518.7 billion as of Jan. 31, and accounted for 18% of total
adjusted earnings in the first quarter. BMO does not break down
its wealth management unit by geography.
The wealth management industry is seeing some shakeup.
Societe Generale is in exclusive talks to sell most of
asset manager Lyxor to Amundi, while Wells Fargo & Co in
February agreed to sell its asset management business.
Reuters reported last week that Swiss bank Credit Suisse
is exploring options for its asset management arm.
($1 = 1.2541 Canadian dollars)
(Reporting by Nichola Saminather in Toronto, and Sohini Podder
and Noor Zainab Hussain in Bengaluru; Editing by Sriraj
Kalluvila, Sherry Jacob-Phillips and Jonathan Oatis)