All Canadian bank investors know that expansion into the U.S. personal and commercial (“P&C”) banking sector remains the focal point of capital deployment for the Canadian banks. In fact, US banking has been – by far – the largest destination of capital deployment since 2004 (when TD Bank acquired a majority stake in Banknorth), with the Canadian banks having spent a huge US$30 bln.

The chart below shows when, where and the size of the U.S. banks acquired in the last 15 years (in brackets, price paid, total assets)[1].

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As shown, TD Bank has been – by far – the most aggressive, spending ~US$17 bln in the past 15 years, expanding its platform along the east coast. Bank of Montreal, spending closer to US$5 bln, has continued to build out its long-standing Chicago-based Harris Bank, while CIBC spent a similar amount to enter the U.S. P&C market with its 2016 purchase of Private Bancorp.

Over this same period, RBC built on its North Carolina-based Centura platform (acquired in 2001), spending US$2 bln in 2006/2007 before divesting the entire platform in 2011 (for $3.6 bln). RBC then re-entered the U.S. in 2015 with the acquisition of the far superior, wealth management-driven, Los Angeles-based City National, spending over US$5 bln.

However, since 2016, the Canadian banks’ inorganic expansion into U.S. P&C has dwindled, with no activity. Meanwhile, sector M&A has picked up. We discuss why we believe U.S. bank M&A will continue to rise in One Chart: U.S. Bank M&A Doubles in 2019 (and Why We Expect More).

Notes

6%+ yield
from 
world 
class 
financial 
sector.
HFA
Distributions 
from 
Down 
Under.

[1] This list consists of significant ($1 billion+ in assets) continental U.S. P&C banking acquisitions only. Price and assets are as at announcement date and in U.S. dollars.


Related Insights

U.S. Bank M&A: Another Accretive MOE, Another Positive Market Reaction (November 6, 2019)

What U.S. Investment Bankers and Banks are Saying about M&A (September 23, 2019)

U.S. Bank M&A: 8 Drivers as Described by Rodgin Cohen (May 29, 2019)

Canadian Banks: Five Takeaways from BBT/STI, Accelerating U.S. Bank M&A  (February 11, 2019)

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