Bank of Montreal (BMO) investor relations material

Executive summary

• Adjusted EPS rose 40% year-over-year to CAD 3.67, with reported EPS up 41% to CAD 3.53.

• Adjusted net income increased 34% year-over-year to CAD 2.7 billion, with reported net income also up 34% to CAD 2.6 billion.

• Return on equity (ROE) improved to 13.5% (adjusted) and 13.0% (reported), up 370bps and 360bps year-over-year, respectively.

• All business segments contributed to results, with robust fee revenue in Capital Markets, Wealth Management, and Treasury and Payment Solutions.

• Announced a 5% dividend increase to CAD 1.71 and repurchased 6 million shares.

Financial highlights

• Revenue increased 10% year-over-year, with strong growth in Capital Markets and Wealth Management; expenses rose 6%.

• Pre-provision pre-tax earnings (PPPT) grew 16% year-over-year.

• Provision for credit losses (PCL) totaled CAD 739 million, with PCL on impaired loans at 45bps, stable quarter-over-quarter.

• CET1 ratio stood at 13.0%, with a 28 bps boost expected from the transportation and vendor finance sale.

• Dividend increased to CAD 1.71 per share; 6 million shares repurchased in the quarter.

Outlook and guidance

• Targeting 15% ROE by fiscal 2027, with year-to-date underlying ROE up 200 bps and EPS up 30%.

• Expecting stable NIM in the near term, with tailwinds from ladder reinvestments and deposit initiatives offset by liquidity and mix.

• Full-year outlook for mid-single-digit core expense growth and continued positive operating leverage.

• Strategic sale of Transportation and Vendor Finance businesses expected to be accretive to CET1 and ROE.

• Management focus on sustainable growth, efficiency improvements, and disciplined capital and risk management.