By DANIEL DUNAIEF
Bank of Montreal last week became the first Canadian bank to list its stock on the New York Stock Exchange.
The move underscores the bank's strategy of increasing its U.S. presence, and could result in greater disclosure to investors of financial information about Bank of Montreal and its Canadian competitors.
"This is one of the ways [Bank of Montreal] will improve the recognition factor and the value to American players," said Jamie Keating, an analyst with Midland Walwyn in Toronto, He noted the bank's goal of generating about half of its funding in the United States.
The NYSE listing follows closely on the heels of the purchase of Suburban Bancorp, a Chicago community bank, for about $246 million, or 2.4 times book value.
The transaction built on a Chicago area franchise the Montreal bank had established a decade ago when it acquired Harris Bankcorp.
Bank of Montreal issued 13 million shares to cover the cost of its midwestern acquisition. The purchase will increase U.S. equity holding in the bank to 11% from 6%.
Analysts are predicting an increase in stock price over the next year to between $30 and $35 from Tuesday's opening of just under $25, as well as a significant boost in the dividend as Bank of Montreal shares stan to trade more actively hem.
While other Canadian banks are expanding their insurance practices and other services, Bank of Montreal is the only one to expand into the U.S. retail banking market.
Some observers have noted that financial information about Canadian banks has been sparse, but a listing on the New York exchange will force greater disclosure.
"It'll bring other banks in line. The others will have peer pressure to open their reporting to match the Bank of Montreal," said Mr. Keating.