Canadian Banking Merger - Maybe
Royal Bank and Bank of Montreal Stumble in Announcement of Merger Plans
Dateline: 01/24/98
On the one hand, we have the Canadian Bankers Association coming out with a big-budget ad campaign saying that Canadian banks now understand they need to do a better job of communicating.
On the other hand, two of the top six banks in Canada, the Royal Bank of Canada and the Bank of Montreal, announce their plans to merge into a single, huge financial institution with assets of $453-billion - but don't manage to tell the Minister of Finance before the announcement. Paul Martin read about it in a newswire item.
Maybe it wasn't a communication problem at all. It could be just another symptom of the arrogance of Canadian banks that irks so many customers.
Either way, if the proposed merger is as good for Canadians as John Cleghorn, CEO of Royal Bank, and Matthew Barrett, CEO of the Bank of Montreal, claim, it was unnecessary and unwise to get the Minister of Finance steaming mad.
The Minister does have the power under The Bank Act to reject or approve a merger of this sort. And his immediate reaction was to say that the government is not prepared to allow the merger until it has had time to consider the report from the Task Force on the Future of the Canadian Financial Services Sector. That report is not expected until September.
It could be quite a while before this merger is a done deal.
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