French lending giant BNP Paribas said on Monday it had sold its US retail and commercial banking arm Bank of the West for $16.3 billion (€14.5bn) in cash.

BNP Paribas said in a statement that the sale to Canada’s Bank of Montreal (BMO) “is expected to formally close during the course of 2022” – subject to clearing regulatory approval and other hurdles. “This is a value-accretive transaction for all sides, which emphasises the quality of Bank of the West franchise,” BNP chief executive Jean-Laurent Bonnafe said.

Media reports in recent weeks had suggested BNP was looking for a buyer for Bank of the West, which it has owned since 1979, and operates 555 branches in 20 US states, with over 9,000 staff.

Bank of the West, which [BNP] has owned since 1979, and operates 555 branches in 20 US states, with over 9,000 staff

The French lender said the US arm had accounted for around five per cent of its group-wide pre-tax earnings of between €12 and €14 billion in recent years.

BNP said that it would distribute some of the proceeds of the sale to investors on completion, planning a €4 billion share buyout “to compensate the expected dilution of the earnings per share” at the group. The remaining proceeds would go into investments aimed at expanding the bank’s business elsewhere, “in particular in Europe”, it added.

But CEO Bonnafe said that “BNP Paribas’ set-up in the United States remains a strategic pillar for the development of our corporate and institutional franchise” even after the sale.