Friday, April 13, 2007

BMO Interested in LaSalle Bank, UBS Analyst Says

Bloomberg, Doug Alexander, 13 April 2007

Bank of Montreal, Canada's fourth- largest bank, may offer to buy the Chicago branches of LaSalle Bank if they become available following a possible merger of two European banks, said Jason Bilodeau, an analyst at UBS Securities Canada.

``Management indicated that it would be interested in the Chicago-based assets of LaSalle, which it knows well,'' Bilodeau said today in a research note, after meeting with bank executives including Chief Financial Officer Karen Maidment.

Bank of Montreal wants to expand its Chicago-based Harris Bank by opening branches and buying assets. ABN Amro Holding NV's LaSalle Bank could provide an opportunity if it's sold, Bilodeau said. ABN Amro, the biggest Dutch bank, is in talks to be bought by Barclays Plc, a move that may result in the sale of some U.S. assets.

UBS says ``several banks'' would be interested in LaSalle Bank, most likely Citigroup Inc., Bank of America Corp., Fifth Third Bancorp and National City Corp. LaSalle is the largest Chicago-based bank with more than 135 branches in Chicago and its suburbs, according to its Web site.

``We have said in the past that we do take a look at everything that comes on the market; LaSalle would be no different,'' Bank of Montreal spokesman Ralph Marranca said today in an e-mail. He declined to comment further.

Bank of Montreal probably wouldn't want to buy all of LaSalle Bank, which has about 265 branches in Michigan and Indiana, and operations in about 18 other states. LaSalle Bank has about $124 billion in assets, compared with C$355 billion ($307 billion) for Bank of Montreal.

``Management was clear in expressing their interest in the Chicago-based retail business, which would be an attractive asset to combine with Harris,'' Bilodeau said.

Such an acquisition could be worth about $10 billion to $12 billion, and a partnership ``could be workable,'' Bilodeau said. That would make it the largest purchase by the bank in at least 23 years, according to Bank of Montreal's Web site.

``Management remains committed to growth via aquisitions in the U.S. and continues to target assets up to C$2 billion in size,'' wrote Bilodeau, who was unavailable for comment. ``We believe they would be willing to consider larger deals under the right circumstances."