BMO accelerates U.S. growth, seeing path to reach target quicker

In its largest recent push into the U.S., Bank of Montreal acquired San Francisco-based Bank of the West three years ago for US$16.3 billion. Photo by Peter J. Thompson/National Post

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Bank of Montreal wants to generate 12 per cent of return on equity from the U.S. by the end of 2027, said Aron Levine, who was appointed president of BMO U.S. last June. His division has added over 100 client-facing bankers and wealth advisers in the past 12 months.

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That ROE would be up from 8.5 per cent as of the end of January, and the timeline for reaching the target is shorter than when management commented on the aim in December, when they discussed the same target as a medium-term goal, generally defined as three to five years.

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“BMO has this great momentum that we’re starting to see in the U.S., and by bringing together the business the way we have, I think we can accelerate that momentum and really be a very important part of the overall BMO,” Levine said in an interview at the Bloomberg News offices in New York on Thursday.

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In its largest recent push into the U.S., Bank of Montreal acquired San Francisco-based Bank of the West three years ago for US$16.3 billion. The deal made California the biggest retail market for Bank of Montreal by branch count, and the lender is planning to add more than 130 new branches in the largest U.S. state in the next five years.

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Levine sees room to improve the performance of branches inherited from Bank of the West. Despite having more than 220 branches in California, Bank of Montreal pulled in fewer deposits than some competitors with less than 70 locations.

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“There is opportunity to improve execution,” Levine said. The plan to build out new branches “will help because, as you add more centres, you do get some benefit from a brand standpoint, from an economies-of-scale standpoint.”

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Levine joined Bank of Montreal after a three-decade career at Bank of America Corp. and a predecessor firm, working across commercial real estate, consumer banking and wealth management. He was involved in Bank of America’s acquisition of Merrill Lynch at the beginning of 2009, and later spearheaded Merrill Edge, a wealth-management offering for mass-affluent clients.

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Bank of Montreal’s wealth business in the U.S. is relatively small, with a focus on the Midwest and West Coast, along with a specialty team catering to law-firm clients. Levine said he sees opportunities for grow by pitching wealth services to the company’s large commercial-banking base. It hired Michele Havens from Northern Trust Corp. in October 2024 to lead the U.S. wealth business from Los Angeles.

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As part of the broader evolution of financial services, Bank of Montreal has also been adopting the use of artificial intelligence for its operations. It currently focuses on 10 to 15 use cases, such as reducing manual work at call centres and helping client-facing bankers to search for information more quickly. About 98 per cent of its employees have tried out Microsoft Corp’s Copilot chatbot for work, and roughly 45 per cent in the U.S. use it daily.

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“Whether they’re using it for the most important business thing or they just are messing around with it, that’s OK,” Levine said, “because right now it’s about adoption curves.”

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