Dec 16 (Reuters) - Canada"s Bank of Montreal has expressed interest in buying the U.S. arm of French bank BNP Paribas SA (BNPP.PA), Bloomberg News reported on Thursday, citing people familiar with the matter. The Canadian lender has held initial talks with BNP to buy its Bank of the West, a retail banking unit based in San Francisco, according to the report. Shares in Bank of Montreal were down 1.6% C$137.87 in afternoon trading. BNP and Bank of Montreal did not immediately respond to Reuters requests for comment. Reuters had reported in November the French bank was working with JPMorgan (JPM.N) and Goldman Sachs (GS.N) to assess a sale of the 147-year-old unit in a deal that could value it at around $15 billion, with potential suitors including Bank of Montreal, Toronto-Dominion Bank (TD.TO) and Ohio-based KeyCorp (KEY.N). BNP has been struggling to keep with its larger and better capitalised rivals in the American retail banking market, and the sale will help strengthen Bank of Montreal"s foothold in the United States. The French lender had acquired Bank of the West in 1979 before merging it with French Bank of California (FBC). The unit is BNP"s largest business outside of Europe, with $99.2 billion of assets under management as of June 30.