TORONTO (S&P Global Ratings) Feb. 1, 2023--S&P Global Ratings today said Bank of Montreal's (BMO; A+/Stable/A-1) acquisition of Bank of the West (A/Watch Pos/A-1) is consistent with BMO's strategic efforts to fuel greater growth and returns in the U.S. market, while allowing efficiency improvements, but weighs on capital. The deal, which received regulatory approval on Jan. 17, 2023, and closed today, adds US$91.6 billion in assets (as of December 2022) compared with BMO's C$1.1 trillion in assets (as of October 2022). The US$16.3 billion cash transaction will cause the S&P Global Ratings risk-adjusted capital ratio (9.4% at fiscal second-quarter 2022) to decline but we expect it will rebuild to the range of 7%-10%, which we consider adequate, in the next
