Bank Of Montreal CEO Sees M&A Upside From Oil Price Slump


TORONTO, March 31 (Reuters) - Battered oil prices are expected to spur mergers and acquisitions in the energy sector and drive advisory fees for the Bank of Montreal, Chief Executive William Downe said on Tuesday.

Canada's No. 4 lender, which is not looking at making major acquisitions at the moment, also expects consumers to step up spending as the sluggish oil price leaves them with more cash, he said.

"It's inevitable that there will be some restructurings of loans that come, but on the other side of that the net will be a positive," he said in an interview.

"The fact that the cost of heating oil and gasoline to drive your car is effectively putting $20 a week in the pocket of every working person in North America, that's net stimulative to the economy," he said.

A prolonged slump in the price of oil has hit the energy sector hard, and it prompted the Bank of Canada to cut interest rates earlier this year.

BMO is looking to take advantage of potential deal activity in the energy patch as weaker oil prices begin to take a toll on industry players, Downe told shareholders at BMO's annual meeting.

"There's going to be a reconfiguration," he said. "We expect to play a part in advising companies in the sector and we also expect to be involved in the financing of ventures that result from this."

The bank itself would be focused on organic growth as it looks to double its U.S. customer base, he said. BMO has a significant presence in the U.S. Midwest through its BMO Harris Bank unit.

"We don't have any acquisition plans at present," Downe said in the interview.

BMO's acquisitions in recent years include UK-based F&C Asset Management plc in 2014 and Milwaukee-based Marshall & Ilsley Corp in 2011.

Last month, the lender posted a first-quarter profit that missed expectations, hurt by the impact of declining long-term interest rates on its insurance unit and lower investment and corporate banking revenues.

(Reporting by John Tilak; Editing by David Gregorio)

Copyright 2016 Thomson Reuters. Click for Restrictions.


Click on the button below to add a comment.
Post a Comment
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.


Our Privacy Pledge

Most Popular Articles

From the Career Center
Jobs that may interest you
Project Manager
Expertise: Engineering Manager|Project Engineer
Location: Orlando, FL
Project Manager
Expertise: Engineering Manager|Project Engineer
Location: Chicago, IL
Technical Coordinator
Expertise: Client Representative|Process Management|Technical Writing
Location: Houston, TX
search for more jobs

Brent Crude Oil : $51.78/BBL 0.77%
Light Crude Oil : $50.85/BBL 0.83%
Natural Gas : $2.99/MMBtu 4.77%
Updated in last 24 hours