Earnings season among the Big Six banks is well underway
BMO Financial Group opened fiscal 2026 with a jump in profit and double‑digit earnings growth, as lower credit provisions and record revenue across all business lines helped offset higher expenses.
The bank reported first‑quarter net income of $2.489 billion for the period ended January 31, up from $2.138 billion a year earlier, with diluted earnings per share rising to $3.39 from $2.83.
Adjusted net income came in at $2.551 billion and adjusted EPS at $3.48, compared with $2.289 billion and $3.04, respectively, in the same quarter last year.
Provision for credit losses fell to $746 million from $1.011 billion, while return on equity improved to 12.1% on a reported basis and 12.4% on an adjusted basis. Reported revenue increased to $9.824 billion.
“BMO had a very strong start to the year. Building on last year's momentum we are executing on our commitments, delivering higher return on equity and double‑digit earnings growth,” BMO chief executive Darryl White said.
“We earned record revenue in each of our operating segments this quarter, with strong fee growth in our market‑driven businesses. Our focus on closely managing expenses and operational efficiency is creating capacity for strategic investments in technology and talent that deliver value for today and the future. Credit is well‑managed and in‑line with our expectations,” he said.
White added that “through disciplined execution of our strategy we are making meaningful progress on the clear path we set to elevate returns and drive profitable earnings growth as we focus on delivering value for our clients and shareholders.”
Analysts on average expected adjusted earnings of $3.20 per share in the quarter, according to LSEG Data & Analytics, meaning BMO’s adjusted EPS of $3.48 came in ahead of consensus.
The quarter also reflected $147 million after tax in severance costs tied to advancing operational efficiencies across the enterprise, with those expenses booked across operating segments.
Dividend, capital and business mix
Concurrently with the results, BMO declared a second‑quarter dividend of $1.67 per common share, unchanged from the previous quarter and 5% higher than a year earlier, equivalent to $6.68 annually.
The bank repurchased 6 million common shares under its normal course issuer bid.
Its Common Equity Tier 1 ratio stood at 13.1% at quarter‑end, down slightly from 13.3% at the end of fiscal 2025 but still comfortably above regulatory minimums.
Segment performance remained broad‑based. Canadian personal and commercial banking posted reported net income of $948 million, up 8% year over year, helped by higher net interest income and non‑interest revenue, including above‑trend card fees.
US banking delivered $742 million in reported net income, up 17%, driven largely by lower credit provisions, while wealth management posted $352 million and capital markets $657 million in reported net income, each up high single to low double digits.
Strong 2025 finish
The quarter followed a strong 2025 finish for BMO, when full‑year net income reached $8.73 billion and the dividend was lifted to $1.67 per share as the bank emphasized return‑on‑equity discipline and balance‑sheet strength.
BMO also streamlined its US footprint, including the planned sale of 138 US branches to First Citizens to sharpen focus in priority markets, and its earlier message that realigning US operations was designed to support the rebuilding of our ROE by combining US personal, business and wealth units under a unified structure.
Aside from BMO, National Bank and Scotiabank also posted their Q1 2026 financials. The Royal Bank of Canada, Toronto‑Dominion Bank and CIBC are expected to report tomorrow, February 26.
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