Bank of Montreal reported adjusted earnings per share of CAD 3.96 for the third quarter of 2026, a 22% increase from the prior year and above analyst expectations of CAD 3.74. Revenue rose 11% year-over-year to CAD 9.96 billion, exceeding forecasts of CAD 9.70 billion by CAD 260 million. Adjusted net income reached CAD 2.9 billion, up from CAD 2.3 billion a year earlier.
The bank’s reported earnings per share stood at CAD 2.38, impacted by a CAD 973 million goodwill charge related to divestitures, including the planned sale of Transportation Finance and Vendor Finance businesses. Pre-provision, pre-tax earnings totaled CAD 4.5 billion, a 13% increase from the prior year, with every segment achieving record levels. Return on equity improved to 14.0%, up 200 basis points from 12.0% a year earlier, while return on tangible common equity rose to 18.0% from 15.6%. The efficiency ratio tightened to 54.9% from 56.0%, and the CET1 capital ratio remained unchanged at 13.0%.
Net interest income outside markets increased 5% to CAD 3.4 billion, while non-interest revenue rose 26%, or 15% excluding trading. Provision for credit losses declined to CAD 722 million from CAD 739 million in the prior quarter. Operating leverage was positive at 1.6%. The bank maintained its CET1 target range of 12.5% to 13.0% and reaffirmed its guidance for a sustainable 15% ROE by fiscal 2027.
Canadian personal and commercial banking reported a 7% year-over-year increase in operating deposits, with mutual fund sales through financial centers up 33% and commercial lending momentum at 3%. In U.S. banking, return on equity rose to 9.8%, while core customer deposits grew 2%, led by a 3% increase in California. Capital markets delivered a record CAD 903 million in pre-provision, pre-tax earnings.
BMO announced a new normal course issuer bid allowing repurchases of up to 25 million shares starting in September 2026. The bank also outlined plans to sell 138 U.S. branches outside its core footprint and other non-core assets, which are expected to add approximately 50 basis points to CET1 upon completion. The stock traded down 0.67% in pre-market activity at CAD 238.63, with a 52-week range of CAD 159.50 to CAD 259.20. The bank’s total return over the past year stood at 56.6%, with a year-to-date gain of 36%.
