The U.S. economy was displaying signs of stronger-than-expected growth, with California being a strategically important market, according to Bank of Montreal’s CEO, Darryl White, who spoke at the bank’s annual meeting.
White highlighted the bank’s strong position to serve clients amidst the evolving global outlook, particularly between the American and Canadian economies.
BMO, Canada’s third-largest bank by market capitalization, now derives about a third of its income from the United States following its $16.3 billion acquisition of Bank of the West last year, the largest deal in Canadian banking history.
He emphasized the importance of trade and investment between Canada and the U.S. for economic competitiveness, noting that it represents one of the largest bilateral trade relationships globally.
White underlined the significance of the Great Lakes region, which alone would constitute the world’s third-largest economy, nearly equal to Japan and Germany combined, employing about a third of the U.S.-Canadian workforce.
Furthermore, when considering California, an economy almost double the size of Canada’s, the impact of this North-South partnership becomes even more evident on a global scale.
Given the limited opportunities in Canada’s saturated market, Canadian banks are increasingly looking to expand southward or into other parts of the world.
White cautioned about a potentially prolonged period of high borrowing costs and weak demand in a higher-for-longer interest rate environment.
However, he also pointed out that when rates eventually begin to ease, the market could transition to a “new normal” with fundamentally different characteristics than those of the past two decades.
