TORONTO (Reuters) - Two of Canada's biggest banks say the time is not right to rush into large acquisitions in the United States or abroad, even though the global economic downturn has made banking assets look like relative bargains.
Royal Bank of Canada, the country's biggest bank, and Bank of Montreal, the No. 4, said on Thursday they will be cautious and patient when it comes to making any major deals, but they will keep an eye out for small acquisitions that complement their businesses.
According to the two banks, the economic climate that has tightened credit conditions means now is not the time to unload large amounts of cash on a big purchase.
Royal Bank said it will continue to look for opportunities in areas that will add to its established businesses but it does not anticipate any blockbuster deals.
"We're looking at opportunities as a result of the turmoil to add to our existing franchises in a sensible way where we can take advantage of them." Royal Bank President and Chief Executive Gordon Nixon said at an investor conference in Toronto.
"But in terms of significant dramatic transformational acquisitions, whether it be the U.S., Europe or Asia, we just don't believe in this environment that it's the appropriate time to be aggressively deploying capital."
BMO Financial Group President and Chief Executive Bill Downe said taking on another bank's loan book and having to work it out is not a very attractive proposition.
"We've been very cautious in the last 18 months with respect to making acquisitions in the U.S. and I still think it's early ... I think you can be quite patient," Downe said.
Reporting by Frank Pingue; editing by Rob Wilson