Canada's Bank of Montreal to buy Bank of the West from BNP Paribas for $16 billion | Canada News Media
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Canada’s Bank of Montreal to buy Bank of the West from BNP Paribas for $16 billion

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3 years ago

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Bank of Montreal said on Monday it will buy BNP Paribas’ U.S. unit, Bank of the West, for $16.3 billion in a deal that will allow the Canadian bank to double its footprint in the world’s biggest economy, while giving France’s biggest bank a huge step up in firepower for deals.

The deal gives BMO, Canada‘s fourth-largest lender, a large-scale presence in California, whose population is bigger than the bank’s home country. It will also increase the United States’ contribution to BMO’s pre-provision, pretax earnings to 44% from 36% in fiscal 2021 and will give the Canadian bank the ability to deploy almost all of its excess capital, which has been a drag on returns.

BNP Paribas has been struggling to keep up with larger rivals in the U.S. retail banking market, and the sale will leave the French bank focused squarely on Europe, where it is growing in stature as one of the region’s biggest investment banks as local rivals stall. In the past two years it has taken on equity and prime broking businesses from Deutsche Bank and Credit Suisse.

“This is a value accretive transaction for all sides, which emphasises the quality of the Bank of the West franchise,” BNP Paribas CEO Jean-Laurent Bonnafe said on Monday.

BMO shares were down 2.2% at C$131.20 on Monday, on track for their lowest close since mid-October. They have lost more than 6%, including Monday’s drop, since rumours of the deal surfaced last week. BNP Paribas shares were up 0.5% on Monday.

BNP said it would use the proceeds from the sale to fund more share buybacks and to finance bolt-on acquisitions and further develop its presence in Europe.

It said it would also consolidate and further develop its activities in the United States, and the cash from the sale could give BNP Paribas more strategic flexibility than other European banks.

Analysts at Credit Suisse and Keefe, Bruyette & Woods (KBW) also said the $16 billion sale price was higher than many analysts had forecast.

“Achieving this price for Bancwest is a clear positive for shareholders and gives BNPP some strategic optionality, which has been a rare thing for European banks,” wrote KBW.

The United States has proven an increasingly unattractive market for European lenders, with BBVA selling its U.S. operations to PNC Financial Services Group Inc in 2020 and HSBC Bank earlier this year selling most of its U.S. business to Citizens Financial Group Inc.

BNP Paribas bought Bank of the West in 1979 and the unit had been its largest business outside of Europe.

REGULATORY UNCERTAINTY

BMO has had a presence in the United States for decades, from its acquisition of Harris Bank in 1984, to its $52 billion acquisition of M&I in 2011.

Canadian banks have amassed billions of dollars of excess capital following a March 2020 moratorium that was lifted last month and they and investors have been itching to put that money to work to lift returns on equity.

BMO said on Monday its share repurchase program, which it previously said it would restart, is on hold until the Bank of the West deal closes at the end of calendar 2022.

The Canadian bank expects “meaningful” revenue synergies from the deal, which will be further quantified in coming weeks, executives said on a conference call on Monday.

But the deal comes at a time when the administration of U.S. President Joe Biden is pushing regulators – including the Federal Reserve – to take a tougher line on mergers across the economy amid worries that declining competition is hurting everyday Americans.

BMO’s CEO, Darryl White, told investors on Monday’s conference call that he saw “no sensible reason” the bank would not obtain the green light from U.S. regulators. He noted it was a positive sign that the Fed on Friday approved three outstanding deals.

“While BMO is anticipating that the deal should be closed by the end of next year, regulatory uncertainty does exist,” Barclays wrote in a note.

BMO said the acquisition would bring in nearly 1.8 million customers and extend its banking presence through 514 additional branches and commercial and wealth offices in key U.S. growth markets.

“We can see the strategic benefits from the acquisition, including further diversification of its loan book and expanding its geographic footprint,” Barclays said in the analyst note, cautioning that BMO’s relative capital advantage has now effectively disappeared overnight.

“We believe that this has the makings of a ‘wait and see’ approach.”

(Reporting by Sudip Kar-Gupta in Paris and Nichola Saminather and Maiya Keidan in TorontoEditing by Megan Davies, Jason Neely and Matthew Lewis)

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What Difference Will You Make to an Employer?

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October 21, 2024

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It’s common knowledge that companies don’t hire the most qualified candidates. Employers hire the person they believe will deliver the best value in exchange for their payroll cost.

Since most job seekers know the above, I’m surprised that so few mention their Employee Value Proposition (EVP). Most job seekers list their education, skills, and experience without substantiating them and expect employers to determine whether they can benefit their company; hence, most resumes and LinkedIn profiles are just a list of opinions—borderline platitudes—that are meaningless and, therefore, have no value. Job seekers need to better explain, along with providing evidence, how they’ll contribute to an employer’s success.

Employers don’t hire opinions (read: talk is cheap); they hire results.

You’re not offering anything tangible when you claim:

 

  • I’m a great communicator.
  • I’m detail oriented.
  • I’m a team player.

 

Tangible:

 

  • “At Global Dynamics, I held quarterly town hall meetings with my 22 sales reps, highlighting our accomplishments, identifying opportunity areas, and recognizing outstanding performers.”
  • “For eight years, I managed Vandelay Industries IT department, overseeing a staff of 18 and a 12-million-dollar budget while coordinating cross-specialty projects. My strong attention to detail is why I never exceeded budget.”
  • “While working at Cyberdyne Systems, I was part of the customer service team, consisting of nine of us, striving to improve our response time. Through collaboration and sharing of best practices, we reduced our average response time from 48 to 12 business hours, resulting in a 35% improvement in customer feedback ratings.”

 

These examples of tangible answers provide employers with what they most want to hear from candidates but rarely do; what value the candidate will bring to the company. Typically, job seekers present their skills, experience, and unsubstantiated opinions and expect recruiters and employers to figure out their value, which is a lazy practice.

Getting hired isn’t based on “I have an MBA in Marketing and Sales,” “I’ve been a web designer for over 15 years,” “I’m young, beautiful and energetic,” blah, blah, blah. Likewise, being rejected isn’t based on “I’m overqualified,” “I’m too old,” “I don’t have enough education,” blah, blah, blah. Getting hired depends entirely on showing employers that you can add value and substance to their company; that you’ll serve a purpose.

When you articulate a solid value offer, the “blah, blah, blah” doesn’t matter. Job seekers focus too much on the “blah, blah, blah,” and when not hired, they say, “It’s not me, it’s…” The biggest mistake I see job seekers make is focusing on the “blah, blah, blah”—their experience and education—believing this is what interests employers. Hiring managers are more interested in whether you can solve the problems the position exists to solve than in your education and experience.

 

Not impressive: Education

Impressive: A track record of achieving tangible results.

 

You aren’t who you say you are; you are what you do.

 

If you want to be somebody who works hard, you have to actually work hard. If you want to be somebody who goes to the gym, you actually have to go to the gym. If you want to be a good friend, spouse, or colleague, you have to actually be a good friend, spouse, or colleague. Actions build reputations, not words.

The biggest challenge job seekers face today is differentiating themselves. To stand out and be memorable, don’t be like most job seekers, someone who’s all talk and no action. Any recruiter or hiring manager will tell you that the job market is heavily populated with job seekers who talk themselves up, talk a “good game” about everything they can “supposedly” do, drop names, etc., but have nothing to show for it.

More than ever, employers want to hear candidates offer a value proposition summarizing what value they bring. If you’re looking for a low-hanging fruit method to differentiate yourself, do what job seekers hardly ever do and make a hard-to-ignore value proposition.

  1. Increase sales: “Based on my experience managing Regina and Saskatoon for PharmaKorp, I’m confident that I can increase BioGen’s sales by no less than 25% in Winnipeg and the surrounding area by the end of 2025.”
  2. Reduce cost: “During my 12 years as Taco Town’s head of purchasing, I renegotiated contracts with key suppliers, resulting in 15% cost savings, saving the company over $450,000 annually. I know I can do the same for The Pasta House.”
  3. Increase customer satisfaction:“During my time at Globex Corporation, I established a systematic feedback mechanism that enabled customers to share their experiences. This led to targeted improvements, increasing our Net Promoter Score by 15 points. I can increase Dunder Mifflin’s net promoter score.”
  4. Save time: “As Zap Delivery’s dispatcher, I implemented advanced routing software that analyzed traffic patterns, reducing average delivery times by 20%. My implementation of this software at Froggy’s Delivery can reduce your delivery times by at least 20%, if not more.”

 

If you want to achieve job search success as soon as possible, structure your job search with a single thread that’s evident and consistent throughout your résumé, LinkedIn profile, cover letters and especially during interviews; clearly convey what difference you’ll make to the employer.

_____________________________________________________________________

 

Nick Kossovan, a well-seasoned veteran of the corporate landscape, offers “unsweetened” job search advice. You can send Nick your questions to artoffindingwork@gmail.com.

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Netflix’s subscriber growth slows as gains from password-sharing crackdown subside

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4 days ago

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October 17, 2024

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Netflix on Thursday reported that its subscriber growth slowed dramatically during the summer, a sign the huge gains from the video-streaming service’s crackdown on freeloading viewers is tapering off.

The 5.1 million subscribers that Netflix added during the July-September period represented a 42% decline from the total gained during the same time last year. Even so, the company’s revenue and profit rose at a faster pace than analysts had projected, according to FactSet Research.

Netflix ended September with 282.7 million worldwide subscribers — far more than any other streaming service.

The Los Gatos, California, company earned $2.36 billion, or $5.40 per share, a 41% increase from the same time last year. Revenue climbed 15% from a year ago to $9.82 billion. Netflix management predicted the company’s revenue will rise at the same 15% year-over-year pace during the October-December period, slightly than better than analysts have been expecting.

The strong financial performance in the past quarter coupled with the upbeat forecast eclipsed any worries about slowing subscriber growth. Netflix’s stock price surged nearly 4% in extended trading after the numbers came out, building upon a more than 40% increase in the company’s shares so far this year.

The past quarter’s subscriber gains were the lowest posted in any three-month period since the beginning of last year. That drop-off indicates Netflix is shifting to a new phase after reaping the benefits from a ban on the once-rampant practice of sharing account passwords that enabled an estimated 100 million people watch its popular service without paying for it.

The crackdown, triggered by a rare loss of subscribers coming out of the pandemic in 2022, helped Netflix add 57 million subscribers from June 2022 through this June — an average of more than 7 million per quarter, while many of its industry rivals have been struggling as households curbed their discretionary spending.

Netflix’s gains also were propelled by a low-priced version of its service that included commercials for the first time in its history. The company still is only getting a small fraction of its revenue from the 2-year-old advertising push, but Netflix is intensifying its focus on that segment of its business to help boost its profits.

In a letter to shareholder, Netflix reiterated previous cautionary notes about its expansion into advertising, though the low-priced option including commercials has become its fastest growing segment.

“We have much more work to do improving our offering for advertisers, which will be a priority over the next few years,” Netflix management wrote in the letter.

As part of its evolution, Netflix has been increasingly supplementing its lineup of scripted TV series and movies with live programming, such as a Labor Day spectacle featuring renowned glutton Joey Chestnut setting a world record for gorging on hot dogs in a showdown with his longtime nemesis Takeru Kobayashi.

Netflix will be trying to attract more viewer during the current quarter with a Nov. 15 fight pitting former heavyweight champion Mike Tyson against Jake Paul, a YouTube sensation turned boxer, and two National Football League games on Christmas Day.

The Canadian Press. All rights reserved.

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All Magic Spells (TM) : Top Converting Magic Spell eCommerce Store

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4 days ago

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October 17, 2024

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