Bank of Montreal's Next Chief Sees Right Conditions for U.S. Push

  • CEO-designee says he ‘knows what we want to do’ with strategy
  • Downe to retire in October after leading BMO for a decade

Bank of Montreal, Canada’s oldest lender, has turned to a former investment banker with an interest in continued U.S. expansion to lead the firm into its third century.

Chief Operating Officer Darryl White was named Friday to replace Bill Downe when he retires at the end of October, putting the 22-year company veteran at the helm of a bank that spent much of the past decade focused on expansion outside Canada in consumer and business lending, wealth management and investment banking.

“I don’t think you should expect a high degree of variability going forward,” White, 45, said in a telephone interview. “We’ve got a pretty clear path that’s delivering results and we’re going to stay on it."

Bank of Montreal, which marks its 200th anniversary this year, expanded in the U.S. during Downe’s 10-year tenure, with takeovers that added to the retail operations of its Chicago-based BMO Harris Bank. The Toronto-based company also expanded in wealth management beyond Canada, with its biggest deal the 2014 takeover of F&C Asset Management, which oversees the oldest U.K. investment fund.

U.S. Interest

White said conditions are right for a continued U.S. expansion, citing the strong capital position and regulatory track record of Canada’s fourth-largest lender by assets.

“We don’t have an identity crisis around those strategies,” White said. “We know what we want to do, so we’re well set up to take advantage of something.”

Analysts and investors viewed White as Downe’s likely successor since the one-time head of BMO Capital Markets was promoted to COO in an executive shuffle announced in October. White joined the bank in 1994 and has held a variety of senior management positions, including overseeing investment and corporate banking, head of equity capital markets and CEO of the BMO Nesbitt Burns unit.

“I’ve really worked in just about every area of the bank, I’ve served on the executive committee for a long time,” said White, a graduate of the University of Western Ontario’s Ivey Business School and a director of the Montreal Canadiens hockey team. “I feel really comfortable and really confident because I know our people.”

‘Seamless’ Transition

Brian Klock, a Keefe, Bruyette & Woods analyst, said he doesn’t expect “any bumps” in the transition.

“He has a long, productive relationship with Mr. Downe from their time together at BMO Nesbitt Burns,” Klock wrote in note to clients. “So we believe the transition will be seamless.”

Bank of Montreal shares, which rallied about 29 percent in the 12 months through Thursday, rose 37 cents to C$100.32 at 1:30 p.m. in Toronto. Under Downe’s tenure, the stock has advanced 43 percent to date, trailing the 63 percent return of the eight-company S&P/TSX Commercial Banks Index.

Downe, the longest-serving CEO among Canada’s largest lenders, navigated the bank through the financial crisis while expanding its operations. He oversaw the purchase of a transportation-finance business from General Electric Co. in December 2015 and the C$4.1 billion ($3.1 billion) purchase of Milwaukee-based Marshall & Ilsley Corp. in 2011, doubling deposits and branches at its U.S. retail bank. Bank of Montreal has had a presence in the U.S. Midwest since buying Harris Bank in 1984.

Downe, 65, said Friday he plans to work side-by-side with White before stepping down at the end of the lender’s fiscal year.

“The bank is really well-positioned for transition, and Darryl in particular is a terrific candidate to lead this company," Downe said in a phone interview.

    Before it's here, it's on the Bloomberg Terminal.