Posted inBusiness moves

BMO retreats home

Bank of Montreal (BMO) has discarded its Hong Kong-listed ETFs and has also agreed to sell its EMEA asset management business.
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The withdrawals come after the Canadian bank agreed earlier this year to offload its Hong Kong and Singapore private banking business to Basel-based J Safra Sarasin.

Late last month, BMO drew a line under its Asian ambitions following a unanimous decision of unitholders to appoint China Asset Management, Hong Kong (China AMC) to run its Hong Kong-listed ETFs from 28 May, according to a statement to the Hong Kong stock exchange.

These include BMO’s Asia USD Investment Grade Bond ETF, Hong Kong Banks ETF, Asia High Dividend ETF, MSCI Japan Hedged to USD ETF, MSCI Europe Quality Hedged to USD ETF, MSCI Asia Pacific Real Estate ETF and its NASDAQ 100 ETF.

With RMB1.59trn ($245.5bn) in assets under management as of the end of 2020, China AMC is one of the largest asset managers in China. 

In total, China AMC has ten ETFs listed on the HKEX, including five leveraged and inverse products, according to data from the local bourse.

In contrast to its retreat from Asia, BMO Asset Management launched 11 new ETFs, including five focussed on innovation, in Canada at the start of this year. In its home market, the firm has 103 ETF mandates covering leading equity indices, fixed income, smart beta and active as well as passive strategies, according to the firm’s website.

They are a “comprehensive suite of ETFs developed in Canada for Canadians”, BMO writes.

Meanwhile, the firm said on Monday, that it will sell its EMEA asset management business to Ameriprise Financial for C$1.1bn ($870m) in an all-cash transaction that is expected to close in the fourth quarter of 2021.

The transaction will force BMO to take a C$745m write-down of goodwill after tax in the second quarter of fiscal 2021, according to a Reuters report.

Other banks have also re-positioned their investment management businesses in recent years, either through disposals or restructurings.

In Asia, Edmond de Rothschild Asset Management closed its Hong Kong branch, Indosuez Wealth Management bought the private banking division of Credit Industriel et Commercial (CIC), National Australia Bank sold its private wealth business in Hong Kong and Singapore to OCBC, and LGT Group picked up ABN Amro’s private banking business in Asia.

Last year Standard Chartered said it would combine its retail, private banking and wealth management businesses into one segment, and HSBC followed suit with a similar restructuring that will fuse its high net worth and retail clients into a single unit.

Part of Mark Allen.