Bank Of Montreal
BMO · NYSE
Next quarter
Expected to report Dec 3, 2026 — estimated from last year’s reporting date.
Consensus is $2.76 EPS for Oct 2026 across 2 estimates, ranging $2.71 to $2.80.
BMO Jul 2026
- 4.80%
- $2.71
- $2.84
- —
- —
Highlights
- Earnings beat: Reported EPS was $2.84 versus consensus of $2.71, a 4.8% surprise.
- Divestiture charge: Net income fell to $1.75 billion from $2.33 billion a year ago and $2.63 billion in the prior quarter, primarily reflecting a $1.087 billion net loss on divestitures recorded in Corporate Services.
- Revenue growth: Total revenue rose 10% year over year to $9.896 billion and 3% sequentially, led by non-interest revenue of $4.329 billion, up 24% year over year.
- Underlying businesses: Canadian P&C net income increased 15% year over year to $980 million, U.S. Banking rose 13% to $867 million, Wealth Management rose 4% to $408 million and Capital Markets rose 46% to $645 million.
- Credit costs: Provision for credit losses declined to $722 million from $797 million a year ago and $739 million in the prior quarter, although business and government loan provisions remained elevated at $379 million.
- Expense pressure: Non-interest expense increased to $6.678 billion from $5.330 billion a year ago, with the comparison distorted by $1.388 billion of Other expense versus $268 million in the prior-year quarter.
- Balance-sheet growth: Gross loans increased 3% from October 2025 to $701.7 billion, while total deposits rose 4% to $1.018 trillion.
- Capital return: BMO repurchased 3.8 million common shares for $922 million during the quarter and announced a new normal-course issuer bid for up to 25 million shares, subject to approvals; the quarterly dividend increased to $1.71 per share from $1.63 a year ago.
Analysis
BMO’s July 2026 quarter was a beat on the supplied EPS measure, with reported EPS of $2.84 versus the $2.71 consensus estimate. The headline earnings result was weaker against both comparisons: net income was $1.75 billion, down from $2.33 billion a year ago and $2.63 billion in April. The decline was largely driven by a $1.087 billion net loss on divestitures, which pushed Corporate Services to a $1.152 billion loss attributable to bank shareholders. The interim statement separately reports diluted EPS of $2.38, so the supplied $2.84 reported EPS appears to reflect a different earnings measure.
Operationally, the print showed broad revenue momentum and lower credit costs. Revenue rose 10% year over year to $9.896 billion, with non-interest revenue up 24% to $4.329 billion and net interest income up 1% to $5.567 billion. Canadian P&C, U.S. Banking, Wealth Management and Capital Markets all grew year over year. Provision for credit losses fell to $722 million, but business and government credit costs remained the largest component at $379 million. Expense growth was substantial because of the divestiture-related charge, while loans and deposits grew 3% and 4%, respectively, from October.
Divestiture-related earnings distortion
The defining feature of the quarter was a large Corporate Services charge rather than deterioration across the operating franchises. Other non-interest expense was $1.388 billion, compared with $268 million a year earlier, and the company recorded a $1.087 billion net loss on divestitures. Corporate Services therefore reported a $1.152 billion loss attributable to bank shareholders, versus a $121 million loss in the prior-year quarter. This more than offset growth in the four operating segments.
- Headline result: Net income attributable to bank shareholders was $1.748 billion, down 25% from $2.327 billion a year ago and 33% from $2.626 billion in the prior quarter.
- EPS reconciliation: The supplied earnings comparison cites reported EPS of $2.84, above the $2.71 consensus; the interim financial statements show diluted EPS of $2.38 for the quarter, versus $3.14 a year ago and $3.53 in the prior quarter.
Broad operating revenue growth
Revenue growth was broad-based despite lower net income. Total revenue reached $9.896 billion, up from $8.988 billion a year ago and $9.567 billion in the prior quarter. Net interest income increased modestly, while capital markets, wealth and fee businesses supplied most of the non-interest revenue growth.
- Net interest income: NII was $5.567 billion, up from $5.496 billion a year ago and $5.268 billion in the prior quarter.
- Non-interest revenue: Revenue was $4.329 billion, up from $3.492 billion a year ago and $4.299 billion in the prior quarter. Trading revenue was $850 million, investment management and custodial fees were $741 million, and mutual fund revenue was $463 million.
- Canadian P&C: Revenue increased to $3.257 billion from $3.076 billion, while net income rose to $980 million from $849 million.
- U.S. Banking: Revenue reached $3.034 billion versus $2.830 billion, and net income increased to $867 million from $765 million.
- Wealth and Capital Markets: Wealth Management net income was $408 million versus $392 million, while Capital Markets reached $645 million versus $442 million.
Credit costs and portfolio risk
Credit costs improved year over year and sequentially, but the provision remained concentrated in commercial lending. BMO’s economic scenarios continue to incorporate tariff, geopolitical and energy-price risks, and the allowance retains a meaningful buffer above the modelled base-case requirement.
- Provision for credit losses: Total PCL was $722 million, down from $797 million a year ago and $739 million in the prior quarter. Impaired-loan provisions were $708 million, while performing-loan provisions were $14 million.
- Commercial exposure: Business and government loans generated $379 million of PCL, compared with $432 million a year ago. Canadian P&C generated $507 million of total PCL and U.S. Banking generated $173 million.
- Allowance: Total allowance for credit losses was $6.030 billion at July 31, including $5.247 billion against loans and $783 million against other credit instruments, versus $5.739 billion at October 31.
- Sensitivity: The reported allowance for performing loans was $4.762 billion, compared with approximately $3.325 billion under a 100%-weighted base case and approximately $8.350 billion under the severe downside case.
Balance sheet and capital
BMO continued to expand its funding and lending base while returning capital to shareholders. The bank remained above regulatory capital requirements, although ratios declined from October as risk-weighted assets grew.
- Loans and deposits: Gross loans were $701.742 billion at July 31, up from $682.211 billion at October 31, while deposits were $1.017834 trillion versus $976.202 billion.
- Capital: CET1 capital was $59.273 billion and the CET1 ratio was 13.0%, compared with 13.3% at October 31. Risk-weighted assets rose to $454.757 billion from $437.945 billion.
- Share repurchases: BMO bought 3.8 million shares for cancellation at an average price of $239.37, spending $922 million including tax; nine-month repurchases totalled 15.8 million shares and $3.193 billion.
- Dividend: Dividends per common share were $1.71 for the quarter, versus $1.63 a year ago. BMO also announced plans for a new issuer bid covering up to 25 million shares, subject to OSFI and TSX approval.
