Bank of Montreal (BMO) Q3 2026 earnings summary

Executive summary

• Adjusted EPS rose 22% year-over-year to CAD 3.96, while reported EPS declined 24%, and pre-provision, pre-tax earnings (PPPT) increased 13%.

• Adjusted net income increased 19% year-over-year to CAD 2.9 billion, while reported net income fell 25% to CAD 1.8 billion due to a CAD 973 million goodwill charge from divestitures.

• All business segments achieved record PPPT, with strong momentum in Capital Markets and Wealth Management, and continued commercial loan growth in both Canada and the U.S.

• Return on equity (ROE) improved to 14% (up 200 bps year-over-year), with a clear path to a sustainable 15% ROE by fiscal 2027.

• Announced divestitures and new share repurchase program expected to add 50 basis points to CET1 ratio and support capital reallocation to higher-return opportunities.

Financial highlights

• Revenue grew 11% year-over-year, with positive operating leverage of 1.6%.

• Non-interest revenue increased 26% year-over-year, driven by higher wealth management, trading, and lending fees.

• Efficiency ratio improved to 54.9% (adjusted), with expenses up 9% (6% excluding FX and performance-based compensation).

• CET1 ratio stable at 13.0%, with strong capital generation net of dividends and share repurchases.

• Provision for credit losses (PCL) was CAD 722 million, down from the prior quarter.

Outlook and guidance

• Confident in achieving medium-term objective of 15% ROE by fiscal 2027, with continued focus on sustainable profitable growth and capital optimization.

• Expect core margin trends in Canadian P&C and U.S. Banking to remain resilient, with NIM stability supported by deposit mix improvement and disciplined pricing.

• Guidance for mid-single digit core expense growth and positive operating leverage for the full year remains unchanged.

• Fourth quarter impaired PCL expected to be in line with third quarter, with no change to 2026 guidance.

• Strategic initiatives include AI-driven client experience enhancements and business automation.