Ashley Redmond: I am here with Dan Werner, Equity Analyst here in Chicago. Dan just gave us a rundown of what happened with the Canadian banks this quarter, and right now we are just going to focus on one thing: M&A. Dan, there has been a lot of activity lately.
Dan Werner: Yes, I mean, obviously, since the Canadian banks can't merge with each other -- the large Canadian banks can't merge with each other, they usually looked either for other non-bank acquisitions within their borders or bank acquisitions and non-bank acquisitions outside their border.
The most prominent one has been the M&I bank acquisition by Bank of Montreal, which Bank of Montreal closed in mid-2011. When they first closed that deal, they took a large credit mark against M&I because of its poor loan quality, and so far that seems to have been a very conservative mark. By the end of 2012, all the integration costs, which -- there are still significant integration cost to be realized, but it looks like it's going to be a good deal for Bank of Montreal and should be a very accretive deal.
For National Bank of Canada, they recently sold its Asset Management Group to Fiera Sceptre, making Fiera Sceptre the third largest publicly traded asset manager, in exchange for 35% of Fiera Sceptre, with an option to go up to 40%. It kind of goes along the line with what we thought National Bank was going to do in terms of building its wealth management going forward.
For Toronto-Dominion, they haven't done a deal since mid-2011, when they bought the MBNA Canada credit card portfolio. They have been rumored for several acquisitions, particularly in Florida, but they have yet to pull the trigger on any kind of deal. Bank of Nova Scotia, recently completed its acquisition of Banco Colpatria in Colombia, which kind of fits in line with their moving into higher-GDP-growth countries, such as Colombia, which has a GDP of approximately 4.5%, and they recently announced a deal for a boutique energy investment bank, called Howard Weil in the Southern U.S.
Lastly, CIBC had completed a 41% stake of American Asset Management's American Century Investments. They haven't done anything since then, but we would look for them to do more wealth management deals going forward.
Redmond: Great. Thanks, Dan.
Werner: Thank you.
