DivestmentMay 12, 2026, 06:07 AM
BMO Sells C$14.5B Transportation & Vendor Finance Businesses
AI Summary
BMO Financial Group has signed a definitive agreement with Stonepeak for the strategic sale of its Transportation Finance and Vendor Finance businesses, including related loan portfolios totaling approximately C$14.5 billion. This move aims to improve capital efficiency, elevate returns, and sharpen BMO's focus on core markets. BMO will retain a 19.9% equity interest in the new entity, allowing for continued participation in its long-term value creation. The transaction is expected to improve the bank's CET1 ratio by 28 bps and be accretive to ROE, though it will result in an approximate C$0.9 billion after-tax charge in Q3 2026.
Key Highlights
- BMO announced the strategic sale of its Transportation Finance and Vendor Finance businesses to Stonepeak.
- The combined loan and lease portfolio in the US and Canada totals approximately C$14.5 billion as of March 31, 2026.
- BMO will invest an approximate 19.9% equity interest in the new entity.
- The bank expects to record a net after-tax charge of approximately C$0.9 billion in Q3 2026, primarily related to goodwill.
- The transaction is expected to improve BMO's Common Equity Tier 1 (CET1) ratio by approximately 28 bps.
- The sale is anticipated to be accretive to the bank's return on equity (ROE).
- The transaction is expected to close in the fourth quarter of fiscal 2026, pending regulatory approvals.