Thursday, August 31, 2006

BMO Plans Shanghai Corporate Bank Branch

Bloomberg, Sean B. Pasternak, 31 August 2006

Bank of Montreal plans to open its first corporate-banking branch in Shanghai to take advantage of China's surging economy, said Yvan Bourdeau, chief executive officer of BMO Capital Markets.

The investment banking unit of Canada's fourth-biggest bank opened a ``representative'' office in Shanghai in 2002, which can refer corporate clients to its full-fledged branches in Beijing, Hong Kong and Guangzhou. Bourdeau declined to say when the bank may win approval for a Shanghai branch, which would allow the bank to offer more services in China's biggest city.

``We're positioning ourselves for the next five, 10 years and we believe that is the right investment to do on our part,'' Bourdeau, 58, said in an interview yesterday from his Toronto office. ``At one point in time, it will pay dividends for us.''

Bank of Montreal wants to increase the number of loans, money-market and foreign-exchange products it can offer to about 22 million people in Shanghai, Bourdeau said. The Toronto-based lender has been operating in China since 1982 and has 150 staff there, part of a strategy to diversify earnings from its Canadian base.

China's economy last year expanded 10.2 percent, the fastest pace since 1995, the National Bureau of Statistics said on its Web site yesterday.

Bourdeau has traveled to China seven times since October, meeting potential clients and lobbying for additional growth opportunities.

BMO Capital Markets was one of six investment banks, and the lone Canadian lender, that managed the $11.2 billion initial public offering this year for Bank of China Ltd., the nation's second-largest lender.

That mandate may help win more underwriting business, such as the proposed IPO by Industrial & Commercial Bank of China, the country's biggest bank, Bourdeau said.

``Everything is so well thought out in that country that they will not appoint someone without having the broad endorsement,'' Bourdeau said. Managing the Bank of China IPO ``is very helpful,'' he said.