Good morning! In this week’s newsletter, BMO wins a key approval for its Bank of the West deal; Barbara Shecter on why Mark Carney’s climate alliance is feeling the heat and Stephanie Hughes wraps up a rough year for dealmakers. Hope you enjoy.
— Joe Hood, Managing Editor, Financial Post
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All clear for BMO’s US$16.3B deal
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The Bank of Montreal got some good news on Wednesday when the U.S. Federal Reserve signed off on its US$16.3 billion acquisition of Bank of the West from BNP Paribas. While there was little doubt the deal would go through, BMO’s plans to finance it were thrown a curve when OSFI raised the domestic stability buffer last month, forcing the bank to raise additional capital. According to Bloomberg News, the deal makes BMO’s U.S. subsidiary the fifteenth biggest bank south of the border, with about one per cent of total deposits and operations in 32 states.
BMO GOES WEST
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Carney’s climate alliance on hot seat
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Environmentalists have been training their sights on the financial sector in recent months, with the goal of shaming big banks over their approach to climate change. This week, as Barbara Shecter reported, a study backed by a consortium of green groups took aim at The Glasgow Financial Alliance for Net Zero (GFANZ), the group founded by Mark Carney, accusing many of its members of continuing to finance new fossil-fuel projects despite their claims to pursue net-zero objectives. While there is no formal rule requiring banks from foregoing such financing yet, trying to have it both ways is becoming a bad look — and environmentalists seem to know it. This will be a fight worth watching as the costs of compliance with net-zero objectives become more apparent.
GREENWASHING ALLEGATIONS
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FP Dealmakers: Can Bay Street bounce back from a down year?
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If 2021 was highest of highs for Canada’s dealmaking set, 2022 was the hangover. Rising rates and economic uncertainty put a chill on the sector, leading to the lowest deal count since 2015, according to figures compiled by Financial Post Data. A stumbling stock market let to dramatic slowdowns in equity and IPO offerings. Meanwhile, companies that had already rushed to shore up their balance sheets when rates were low decided to sit things out. Stephanie Hughes reported on all the numbers, and on the odds of a rebound in 2023.
VIEW THE FULL LEAGUE TABLES
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TSX slams Canada over Chinese lithium divestment order
Michele Romanow steps down as Clearco CEO as company lays off more staff
WonderFi confirms ‘preliminary’ discussions about potential mergers
CIBC taps Jon Hountalas to succeed Laura Dottori-Attanasio as Canadian banking chief
Canada’s inflation drops to slowest in almost a year, but underlying cost pressures stay strong
Canadian pension funds inconsistent on climate policy, watchdog group says
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