Canadian banks seen hitting U.S. acquisition trail

Canada's big banks have weathered the credit crunch in relatively good shape and should swoop in to buy some ailing U.S. banks, observers say.

Royal Bank of Canada (RY.TO: Quote, Profile, Research), the country's largest bank, and Bank of Montreal (BMO.TO: Quote, Profile, Research), the fifth largest by market value, are best positioned to make U.S. acquisitions, CIBC World Markets analyst Darko Mihelic said on Friday in a research note entitled "Fish or Cut Bait."

The banks have excess capital to use and relatively clean balance sheets, Mihelic noted.
"Perhaps now is the time to think big," he wrote.

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