BNP Paribas has reached an agreement with BMO Financial Group for the sale of 100% of its retail & commercial banking activities in the US conducted through its subsidiary Bank of the West, for $16.3bn.

The deal is expected to formally close during the course of 2022, after approval of the relevant antitrust and regulatory authorities.

The total agreed consideration is to be paid in cash.

Bank of the West has contributed an average of approximately 5% to the BNP Paribas Group pre-tax earnings over the last few years and represents 20.5% of its market capitalisation.

BNP Paribas said its long-term presence in the US, and notably a strong Corporate & Institutional Banking franchise, was recently reinforced with the development of prime brokerage activities. It added in the statement that the terms of the transaction do not have any significant impact on these businesses. It would continue to consolidate and further develop its activities in the US as a strategic pillar to better serve global clients' needs.

To strengthen its global connectivity and reinforce its One bank approach, which offers to corporates a seamless access to BNP Paribas' global Corporate Banking platform, the Group will enter into long-term distribution agreements with BMO, BNP Paribas' new partner for the purpose of cross-border cooperation and for the provision of Equipment Finance and Cash Management solutions in North America.

Jean-Laurent Bonnafé, BNP Paribas group director and chief executive, said: "This is a value accretive transaction for all sides, which emphasizes the quality of Bank of the West franchise. In the name of BNP Paribas, I would like to deeply thank all Bank of the West teams for their achievements and contributions for the development of the Bank.

"Moreover, BNP Paribas' set-up in the United States remains a strategic pillar for the development of our Corporate and Institutional franchise. With this transaction, BNP Paribas also reaffirms its commitment to deliver value to all its stakeholders."

Headquartered in San Francisco, Bank of the West operates more than 500 branches and offices in 24 states, primarily in the Western and Midwestern parts of the United States, employs more than 9,000 team members, and serves nearly 1.8 million customers.

As of June 2021, Bank of the West has a deposit market share of approximately 3% in the top three states (California, Colorado, and Oregon), which account for over 80% of its deposits.

Bank of the West markets a very broad range of retail banking products and services to individuals, small businesses and corporate clients. It also has strong positions across the United States in several specialised financing activities, such as marine, recreational vehicles, and agribusiness.