Bank of Montreal picks Irish unit as post-Brexit EU hub

Move will allow Canadian bank to operate across the European Economic Area

Standard & Poor’s  said on Wednesday that it has assigned an A+ long-term rating to the Irish unit of BMO. Photograph: iStock

Standard & Poor’s said on Wednesday that it has assigned an A+ long-term rating to the Irish unit of BMO. Photograph: iStock

 

Bank of Montreal will use its existing Irish unit as its future European hub so that it can continue to provide services across the European Economic Area (EEA) after Brexit.

Under a restructuring, the Canadian group’s fully-licensed Bank of Montreal Ireland (BMI) subsidiary will become its only EU-based entity, granting the group passporting rights across the EEA, and giving it the ability to access European Central Bank funding.

Standard & Poor’s said on Wednesday that it has assigned an A+ long-term rating to the Irish unit, saying it sees it as a “core subsidiary” of the group.

“To that end, BMI will become even more instrumental to the group’s strategic operations in Europe, despite its small size,” said S&P.

Global assets

“As of end-2017, BMI contributed less than 1 per cent of Bank of Montreal’s global revenues and less than 2 per cent of its total assets, and we do not expect it to expand substantially because its main purpose is to serve the group’s clients.”

Bank of Montreal recorded 22.3 billion Canadian dollars (€14.7 billion) or revenues in 2017 and had C$710 billion of assets.