Throughout the credit crisis, Canadian banks resolutely proclaimed themselves fiscally healthier than their US counterparts. Proof of that was on deplay today at Bank of Montreal agreed to purchase Marshall & Ilslay Corp. for $4.1 billion.

M&I was a victim of the credit crisis, while BMO was anything but hobbled by it.

Marshall & Ilsley has posted eight straight quarterly losses while Bank of Montreal has reported six consecutive quarters of profit growth, a streak unmatched by Canada’s five other large lenders. Marshall & Ilsley traded as high as $40 in 2007.

 

Defaults on business and home loans hobbled profit at M&I, with net charge-offs equal to 5.47 percent of average loans and leases during the third quarter.

 

M&I’s weakness is apparent in the numbers.

The takeover has a price-to-book ratio of 0.61 for Marshall & Ilsley, less than half of the median ratio of 1.4 for 33 regional, commercial bank deals since the start of 2009, according to Bloomberg merger data.

 

Bank of Montreal is paying 1.26 times revenue, less than half the 3.17 times revenue for the average purchase of similar- sized U.S. banks.

 

BMO gets 374 M&I branches and $38 billion in deposits. M&I is the largest bank in Wisconsin. The deal turbo-charges BMO’s Harris Bank unit based in Chicago. It also gives Canadian banks proof positive that they played the 2000s smarter than US banks.