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BMO eyes further U.S. expansion with purchase of BNP’s Bank of the West

The BMO office tower is shown in Toronto's financial district in Toronto on April 5, 2016. THE CANADIAN PRESS/Nathan Denette. THE CANADIAN PRESS/Nathan Denette

BMO Financial Group has signed a deal with French bank BNP Paribas to buy its U.S. subsidiary Bank of the West for US$16.3 billion.

The bank says the purchase will be funded primarily with existing capital.

BMO says the agreement, which involved its Chicago-based subsidiary BMO Harris Bank, will strengthen its expansion in the United States.

The bank says the purchase of San Francisco-based Bank of the West will provide it with a complementary footprint, including in the highly attractive California market.

Read more: BMO hikes dividend 25% to close out big bank earnings

It says the acquisition will bring nearly 1.8 million customers to BMO and will expand its banking presence through 514 additional branches in key U.S. growth markets.

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Darryl White, BMO’s chief executive officer, says the purchase will add meaningful scale, expansion in attractive markets and drive greater growth.

“We will deliver a highly competitive offering to new growth markets, combining the strength of our digital banking platform and a strong team of bankers to generate leading customer growth,” he said in a statement.

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