Financial Post, Duncan Mavin, 17 January 2008
When Bank of America muscled in on Chicago's banking market last year, there were questions in some quarters about whether the Bank of Montreal retail banking unit in the area would suffer from the increased competition from one of the top retail banks in the United States.
But executives at BMO's Chicago-based Harris subsidiary appeared unfazed and insisted Bank of America's purchase of local rival LaSalle Bank could present opportunities, as the transaction would result in some shakeup at LaSalle.
Yesterday, Harris executives followed up on their rhetoric, announcing the bank has poached five bankers to its commercial-market team as a result of the fallout from Bank of America's takeover of LaSalle.
"There's been a lot of dislocation [at LaSalle] and, frankly, they've lost a healthy number of people and we've been the recipient," said Peter McNitt, head of business banking.
Harris has hired four senior executives from LaSalle as well as another senior banker from Bank of America as it tries to gain market share in the areas of small business and commercial banking.
The move to bulk up senior staffing at Harris comes despite gloomy forecasts for the U.S. economy, which could hit commercial banking particularly hard.
Mr. McNitt acknowledged that local businesses tied to the residential housing market are "dormant" due the slide in the U.S. economy. However, on the industrial side, "we have not seen the contagion from real estate flow in," he said.
"You can conjecture that there are some economic turbulence that could lead people not to expand," Mr. McNitt said. "But we really believe there are some good people out there who are knocking on our door and who want to hook their wagon to our growth engine."
"Obviously clients are interested in building relationships that help them navigate difficult times," Mr. McNitt said.
Harris hopes to demonstrate commitment to local commercial clients by building its business locally.
The BMO unit -- which shares the bulk of Chicago's banking market with JPMorgan Chase & Co., and LaSalle -- now bills itself as the only hometown bank in Chicago, despite its Canadian parent. The bank recently signed a deal to become the official partner of the Chicago Bulls, which, Mr. McNitt said, has helped demonstrate its commitment to the area.
The bank is hoping to attract more talent from LaSalle as well as "a significant number" of former LaSalle clients, Mr. McNitt said;