Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

Bank of Montreal is selling its private banking business in Hong Kong and Singapore to J. Safra Sarasin Group as the Canadian lender looks to offload some of its smaller operations abroad.

The sale to the Swiss private banking group, which has Brazilian owners, comes after nearly two years of political turmoil in Hong Kong. Protesters have fiercely resisted the imposition of new laws that give China’s government tighter control over Hong Kong and its citizens, who have enjoyed special status.

But the bank said the transaction is about commercial strategy, rather than politics, and that it remains committed to the region. BMO still has capital markets operations in both cities that provide services such as trade finance to corporate clients.

Story continues below advertisement

In recent years, BMO has been making a concerted effort to improve its efficiency metrics, as measured by expenses relative to revenue, which have lagged rival banks in Canada. As part of that push, the bank has reassessed some smaller businesses that it no longer considers core to its plans and looked to sell them. That plan predates the onset of the novel coronavirus pandemic, which has also had an impact on banks across Asia.

In late November, BMO also announced that it is winding down energy sector coverage in its U.S. corporate and investment banking arm, which was based in Houston, choosing to devote its resources to the Canadian market.

BMO’s moves follow a trend in which other major Canadian banks have sold smaller overseas operations in Asia, the Caribbean and the Middle East in recent years, pulling back from markets that generated lower returns and sometimes carried higher perceived risks of political upheaval or financial crime.

“We’ve been taking a bit of a harder look at our portfolio, really just looking through the lens of efficiency and returns,” said Darryl White, BMO’s chief executive officer, on a December conference call with analysts. “So you may see [divestitures] as time goes on that would be helpful, but not overly significant on the whole.”

Financial terms of the deal to sell BMO’s private banking operations in Hong Kong and Singapore were not disclosed, but the transaction is not material to the bank. In a news release, J. Safra Sarasin said it was interested in acquiring BMO’s roster of ultrahigh net worth clients as part of an international growth strategy that includes a push into Asia. They currently operate in 19 locations across Europe, the Americas and the Middle East, as well as in Hong Kong and Singapore

“This transaction underscores the importance of the Asian market for the group,” bank chairman Jacob J. Safra said in a news release.

BMO has had an office in Hong Kong since 1969. Through its capital markets division, the bank will continue to serve clients in Hong Kong and Singapore, most notably through its global markets, trade finance and financial institutions groups. The bank offers services to Canadian clients doing business in China, and personal banking products to Chinese emigrants and students coming to Canada.

Story continues below advertisement

BMO is also the only major Canadian bank with an established presence in mainland China, through its licensed subsidiary BMO China Co. The bank’s roots in China date back to its role in settling trade transactions in the 1800s.

“The Hong Kong and Singapore markets remain important for BMO, and we look forward to continuing our longstanding service to our corporate and institutional clients in Asia,” the bank said in a news release.

The deal is expected to close in the first half of 2021, subject to regulatory approvals.

Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow the author of this article:

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error Editorial code of conduct
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies