Bank of Montreal (BMO) Q2 2025 earnings summary

Executive summary

• Adjusted net income and EPS rose 1% year-over-year to $2,046 million and $2.62, respectively, with 12% PPPT growth and strong performance across all operating groups.

• Reported net income for Q2 2025 was $1,962 million, up from $1,866 million year-over-year; reported EPS was $2.50, up from $2.36.

• CET1 ratio at 13.5%, with 10 million shares repurchased year-to-date and a 5% dividend increase announced.

• Positive operating leverage for five consecutive quarters, with YTD adjusted operating leverage at 5.7%.

• Macro uncertainties, including trade policy and slowing GDP, are impacting loan demand and client activity.

Financial highlights

• Q2 adjusted net income $2,046M (up 1% Y/Y); reported net income $1,962M (up 5% Y/Y); adjusted diluted EPS $2.62 (up $0.03 Y/Y); reported EPS $2.50 (up $0.14 Y/Y).

• Adjusted PPPT $3,772M (up 12% Y/Y); reported PPPT $3,659M (up 17% Y/Y); pre-provision pretax earnings for H1 reached $7.8 billion, up 22% year-over-year.

• Adjusted revenue $8,679M (up 9% Y/Y); adjusted expenses $4,907M (up 6% Y/Y); operating leverage positive at 2.7% for the quarter and 5.7% year-to-date.

• Total provision for credit losses $1,054M; PCL on impaired loans $765M (46 bps); PCL on performing loans $289M (17 bps); total PCLs increased $349M year-over-year.

• Adjusted efficiency ratio 56.5% (improved 150 bps Y/Y); reported 57.8% (improved 290 bps Y/Y).

Outlook and guidance

• Medium-term ROE target set at 15%+ (adjusted) for the group and 12%+ for U.S. P&C; year-to-date ROE improved to 10.6%.

• Expect stable NIM at the all-bank level and in P&C for the remainder of the year.

• Full-year expense growth expected in mid-single digits, with higher growth in H2.

• Capital markets PPPT expected to remain above $625 million per quarter.

• Balance sheet optimization underway, including exit of non-core portfolios and focus on core operating deposits.