Bank of Montreal and China's largest state-owned bank, ICBC, have signed a new memorandum of understanding to increase the Canadian bank's footprint in the world's second largest economy.
Bank of Montreal is the only Canadian bank with a wholly owned subsidiary in China.
Rajeshni Naidu-Ghelani · CBC News
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The Bank of Montreal has signed a new memorandum of understanding with China's largest state-owned bank, Industrial and Commercial Bank of China Ltd. (ICBC), in an effort to expand its footprint in the world's second largest economy.
The new agreement will allow BMOand ICBCto cooperate on everything from asset management to corporatefinancing and trade in China and Canada.
The deal was signed in November, but details werereleased publicly on Monday.
"We look forward to leveraging the memorandum of understandingto build on a number of opportunities, including our asset management capabilities and other areas," saidGilles Ouellette, group head ofBMO Asset Management.
The bank said its currently discussing "embedding" BMOexchange traded funds in ICBC funds.
"Ultimately, we will work with them to reach mainland investors, and hope to design new products tailored to the needs of their clients," said a BMOspokesperson. The Canadian bank has yet to distribute its investment management products in China.
China 'opening up'
The agreement comes at a time when Chinahas been trying to promote foreigninvestmentin its fast-growing financial sector.
Authorities havevowed to introduce measures to liberalize marketaccess for foreign banks and level the playing field with state-owned banks after decades of controlling the activities of foreign banks.
Currently, BMO is the only Canadian bank with a wholly-owned subsidiary in Asia's biggest economy. It has had a partnership with ICBC, which is China's biggest bank by assets, since 1997.
In 2006, BMOhelped manage the distribution of ICBCshares in Canada for its initial public listing.
Beyond China, BMO said it plans to use ICBC'slarge distribution network for its wealth products.
Investors welcomed the news of the agreement with BMO shares up nearly 1 per cent on the Toronto Stock Exchange onMondaymorning.
