BMO Financial Group is exiting the transportation and vendor finance business. The Canadian bank agreed to sell those operations to private investment firm Stonepeak, with plans to retain a minority stake in the newly formed entity. The deal marks another step in BMO's strategy to narrow its focus and allocate capital toward areas with stronger growth potential.

The transaction includes a combined loan and lease portfolio of approximately 14.5 billion Canadian dollars (about US$10.6 billion) as of March 31. Stonepeak will pay cash for the assets, plus an earnout tied to future performance. BMO intends to use part of the proceeds to acquire roughly 20% equity in the new company, maintaining a financial link to the business without retaining operational control.

The sale allows BMO to concentrate on its core markets where it sees better long-term returns. This marks the latest example of a major bank shedding specialized finance units to simplify operations and focus on traditional banking activities where it holds stronger competitive positions.