BEIJING, CHINA--(Marketwire - Feb. 20, 2012) -
Editors Note: There is a photo available with this press release.
BMO announced today that it has entered into a definitive agreement to acquire a 19.99 per cent interest - the maximum permitted for a foreign investor - in COFCO Trust Co., a subsidiary of COFCO Group - one of China's largest state-owned enterprises with operations across a variety of sectors, including agriculture and financial services.
COFCO Trust Co. was established in 2009 and had assets under management of RMB 36 billion (US$5.7 billion) as at December 31, 2011.
"BMO's commitment to China dates back to a year after our founding as Canada's first bank in 1817. As we looked to expand BMO's offering to high net worth and institutional clients in China through a local partner, COFCO Trust emerged as the perfect choice," said Gilles Ouellette, President and Chief Executive Officer of BMO Financial Group's Private Client Group and Chairman of BMO ChinaCo. "We have a decades-long relationship with COFCO Group through our role in financing Canadian wheat sales to China.
"BMO can leverage its North American wealth management and capital markets experience to assist COFCO Trust in developing its wealth management offering," noted Mr. Ouellette. "COFCO Trust provides us with a leading entry point and greater flexibility to offer a wider variety of wealth management products directly or through third parties. It complements our investment management capabilities provided by Shanghai-based Fullgoal Fund Management Co. and Hong Kong-based Lloyd George Management."
"COFCO is very pleased to deepen our long-standing relationship with BMO, a highly-respected institution. We are looking forward to a fruitful partnership to create value in China's fast-growing financial services market, as well as to assist the Chinese financial enterprises in their efforts to improve and globalize their professional services," stated Mr. Ning Gaoning, Chairman of COFCO Group.
"This strategic transaction between COFCO Group and BMO is an important step to enhance our involvement in the financial industry," said WU Xiaohui, Chief Financial Officer, COFCO Group and Chairman of COFCO Trust Co. "We are extremely pleased to be working together in the trust business in China - a business with great promise."
"This is a natural extension of our Asia growth strategy and provides us with more opportunities in the rapidly growing wealth management space in China," said Albert Yu, Managing Director and Head of Asia, BMO Financial Group. "Since regulatory changes were instituted in 2007, trust companies have become an increasingly important provider of wealth management products in China."
Terms of the deal were not disclosed. The deal is subject to approval from the China Banking Regulatory Commission (CBRC) and the Office of the Superintendent of Financial Institutions of Canada (OSFI), and to other customary closing conditions.
About BMO in China
BMO is the only Canadian and one of only three North American banks with an established subsidiary bank in China. BMO's subsidiary bank, Bank of Montreal (China) Co. Ltd. (BMO ChinaCo), maintains branches in Beijing, Guangzhou and Shanghai, allowing the bank the flexibility to expand its product and service offerings for North American and Chinese clients. BMO also has branches in Beijing and Hong Kong, and a representative office in Taipei, Taiwan. In addition, BMO established an Investment Banking representative office in Beijing and has a 28 per cent equity interest in Fullgoal Fund Management Co., one of China's leading fund management companies. In 2011, BMO acquired Lloyd George Management, a Hong Kong-based boutique asset manager.
About COFCO Trust Co.
Beijing-based COFCO Trust was established in 2009 under the supervision of the China Banking Regulatory Commission with a mandate to provide trust products to institutions and high net worth individuals in China. It has a staff of 60.
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