Deal comes after big six bank began sale process in September
BMO Financial Group has agreed to sell 138 branches to US-headquartered First-Citizens Bank & Trust Co., according to a report by The Canadian Press.
The deal is part of a plan by BMO to optimize its branch network, and the branches being sold are all in the United States. According the report the branches are located in North Dakota, South Dakota, Nebraska, Kansas Missouri, Wyoming, Oklahoma, western Minnesota, eastern Oregon, southern Illinois, and Idaho.
First Citizens will assume $5.7 billion USD and $1.1 billion USD in loans as part of the deal. BMO says it will record a goodwill related charge of about $104 million CAD for Q4 as well as a tax charge of about $117 million CAD.
The branches being sold by BMO were largely acquired through BMO's purchase of the US-based Bank of the West. BMO's plan to sell some branches was first reported in September. The sale or closure of branches is a relatively common practice at banks following acquisitions. Traditional branches are also being closed in North America as banks and cusomters show preference for online services.
BMO says this deal is still subject to regulatory approvals and is expected to close in the middle of next year.
