Bank of Montreal (BMO) is reportedly considering options for its $270bn asset management unit, including a partial sale.
The move could result in the bank looking for a buyer for acquisition of certain parts of the business outside its home market, Bloomberg reported citing people familiar with the issue.
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The bank is currently working alongside an adviser to explore the strategic options.
According to the report, the review is at a preliminary stage and the certainty of a transaction is still uncertain.
The news was not confirmed by the bank.
The move is part of the bank’s plan to scale back the business’s international presence.
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By GlobalDataBMO Global Asset Management serves customers through more than 20 offices and a workforce of around 1,200.
As at 31 December 2019, the business managed over $273bn in assets.
The main holding company for its Europe, the Middle East and Africa businesses oversaw $115.2bn as of 31 October 2019.
In Q3 2020, BMO Financial wealth management unit posted a rise in income despite the Covid-19 crisis even as higher credit loss provisions hit the group performance.
The wealth management division’s reported net income in Q3 2020 surged 37% year-on-year to C$341m ($258.7m) while total revenue increased 18% to C$2.48bn.
The fund management space is under stiff fee competition lately.
Recently, a report said that US banking group Wells Fargo is looking to sell its asset management business, which managed $578bn as of the end of June this year.
The bank is reportedly in talks with asset management companies and private equity firms for a potential deal though nothing has been finalised.
French banking group Societe Generale is also seeking to offload its asset management unit Lyxor, valuing the business at nearly $1bn. The move is aimed at improving the profitability of the French bank.
