Bank of Montreal has agreed to buy Portland, Oregon-based advisory firm CTC Consulting LLC to augment its wealth management business catering to ultra-high net worth clients, the bank said on Thursday.
BMO, Canada’s No. 4 lender, said it will merge CTC with its Harris myCFO advisory business, which is a segment of its substantial presence in the U.S. Midwest. Ultra-high net worth clients generally have a net worth of at least $10 million.
Financial terms of the deal were not disclosed. BMO expects it to close during the second quarter
“CTC Consulting’s strong client focus aligns perfectly with BMO and complements our existing ultra-high net worth investment offering by strengthening our manager research and advisory capabilities, especially in the area of alternative investments,” said Gilles Ouellette, CEO of BMO’s private client group.
Moody’s senior financial services analyst David Beattie said he viewed the acquisition as positive for BMO.
“The deal, while not financially material, is a good product extension to their U.S. wealth management initiative,” Mr. Beattie said in an e-mail.
The purchase was the second such deal in the last three weeks by a Canadian bank looking to bulk up its global wealth management arm. In late March, Royal Bank of Canada said it will buy some overseas divisions of the Coutts private banking business from Royal Bank of Scotland, giving RBC access to high net worth individuals in fast-growing emerging markets.
Mr. Beattie said global wealth management is an attractive asset class for Canada’s banks, which have strong capital ratios compared with international competitors and whose profitable Canadian banking businesses face slower growth.
“Wealth management is low risk, and has low capital intensiveness, with stable higher growth earnings potential driven by positive demographics,” he said.
BMO shares were up 22 cents at $58.47 at midday on Thursday alongside broadly stronger Canadian bank shares in a rallying Toronto market.