Financial Results Highlights
Second Quarter 2026 compared with Second Quarter 2025:
Reported net income1 of $2,630 million, an increase of 34% from $1,962 million; adjusted net income1 of $2,733 million, an increase of 34% from $2,046 million
Reported earnings per share (EPS)2 of $3.53, an increase of 41% from $2.50; adjusted EPS1, 2 of $3.67, an increase of 40% from $2.62
Provision for credit losses (PCL) of $739 million, a decrease from $1,054 million
Reported return on equity (ROE) of 13.0%, compared with 9.4%; adjusted ROE1 of 13.5%, compared with 9.8%
Common Equity Tier 1 (CET1) Ratio3 of 13.0%, compared with 13.5%
Declared a quarterly dividend of $1.71 per common share, an increase of $0.08 or 5% from the prior year and $0.04 or 2% from the prior quarter
Year-to-Date 2026 compared with Year-to-Date 2025:
Reported net income1 of $5,119 million, an increase of 25% from $4,100 million; adjusted net income1 of $5,284 million, an increase of 22% from $4,335 million
Reported EPS2 of $6.92, an increase of 30% from $5.34; adjusted EPS1, 2 of $7.15, an increase of 26% from $5.66
PCL of $1,485 million, a decrease from $2,065 million
Reported ROE of 12.5%, compared with 10.0%; adjusted ROE1 of 12.9%, compared with 10.6%
TORONTO, May 27, 2026 /CNW/ - BMO Financial Group (TSX:BMO) (NYSE:BMO) reported net income for the second quarter ended April 30, 2026 was $2,630 million, compared with $1,962 million in the prior year, and EPS of $3.53, compared with $2.50. Reported ROE was 13.0%, compared with 9.4% in the prior year. Adjusted net income was $2,733 million and adjusted EPS was $3.67, an increase from $2,046 million and $2.62, respectively, in the prior year. Adjusted ROE was 13.5%, compared with 9.8% in the prior year.
"At our March Investor Day, we reviewed our plan to elevate returns and accelerate growth. Our second quarter results continued to demonstrate meaningful progress and momentum against these commitments. We once again strengthened ROE and delivered strong EPS growth, driven by robust fee revenue across Capital Markets, Wealth Management and Treasury and Payments. We delivered solid sequential commercial banking loan growth in both Canada and the United States, reflecting improving client activity and the strength of our bankers. These outcomes are driven by our focus on deepening client relationships, innovating to drive business value, and optimizing performance," said Darryl White, CEO of BMO Financial Group.
"Our value‑driven approach to human‑ and AI‑powered client experiences is delivering tangible benefits. To continue to advance our innovation strategy, we recently established the BMO Institute for Applied Artificial Intelligence & Quantum, dedicated to the responsible application, governance and oversight of AI at scale, and support our clients as they integrate AI into their companies and households. Disciplined investment, capital and risk management continue to strengthen our earnings quality, creating sustainable long‑term value for our shareholders," concluded Mr. White.
Concurrent with the release of results, BMO announced a third quarter 2026 dividend of $1.71 per common share, an increase of $0.04 or 2% from the prior quarter and an increase of $0.08 or 5% from the prior year. The quarterly dividend of $1.71 is equivalent to an annual dividend of $6.84 per common share. During the quarter, we purchased for cancellation 6.0 million common shares under the normal course issuer bid, at an average price of $193.47 per share.
On May 11, 2026, we entered into a definitive agreement with Stonepeak for the sale of BMO's Transportation Finance and Vendor Finance businesses, including related loan portfolios which are part of our U.S. Banking and Canadian P&C operating segments. Stonepeak will acquire the assets of these businesses for cash consideration and an earn-out contingent upon the business achieving specified future performance targets. BMO will use a portion of the consideration to invest an approximate 19.9% equity interest in the new entity.
The transaction met the accounting requirements for assets held for sale in the third quarter of fiscal 2026, and as a result, we expect to recognize a charge of approximately $1.1 billion pre-tax ($0.9 billion after-tax), primarily related to goodwill recorded in Corporate Services and treated as an adjusting item. The final amount is subject to closing adjustments and foreign exchange rates prevailing at the date of closing. This transaction is expected to close in the fourth quarter of fiscal 2026, subject to regulatory approvals and customary closing conditions.
Caution
The foregoing section contains forward-looking statements. Please refer to the Caution Regarding Forward-Looking Statements section.
(1)
Results and measures in this document are presented on a generally accepted accounting principles (GAAP) basis. They are also presented on an adjusted basis that excludes the impact of certain specified items from reported results. Adjusted results and ratios are non-GAAP and are detailed in the Non-GAAP and Other Financial Measures section. Unless otherwise indicated, all amounts are in Canadian dollars. All ratios and percentage changes in this document are based on unrounded numbers.
(2)
All EPS measures in this document refer to diluted EPS, unless specified otherwise.
(3)
The CET1 Ratio is disclosed in accordance with the Capital Adequacy Requirements (CAR) Guideline, as set out by the Office of the Superintendent of Financial Institutions (OSFI), as applicable.
Second Quarter 2026 Performance Review
Adjusted results and ratios in this section are on a non-GAAP basis. Refer to the Non-GAAP and Other Financial Measures section for further information on adjusting items.
Canadian P&C
Reported net income was $884 million, an increase of $120 million or 15% from the prior year, and adjusted net income was $887 million, an increase of $119 million or 15%, primarily due to a 5% increase in revenue, as well as a lower provision for credit losses, partially offset by higher expenses. Revenue growth was driven by increases in net interest income, primarily due to higher net interest margin, and non-interest revenue due to higher card-related and mutual fund distribution fees, partially offset by lower deposit fee revenue.
U.S. Banking
Reported net income was $790 million, an increase of $189 million or 32% from the prior year, and adjusted net income was $847 million, an increase of $172 million or 25%. The impact of the weaker U.S. dollar decreased net income by 5%, revenue by 4% and expenses by 3%.
On a U.S. dollar basis, reported net income was $575 million, an increase of $154 million or 37% from the prior year, and adjusted net income was $616 million, an increase of $143 million or 30%, primarily due to a 5% increase in revenue and a lower provision for credit losses, with expenses relatively unchanged from the prior year. Revenue growth was driven by higher non-interest revenue, including the impact of a loss on the sale of a non-relationship U.S. credit card portfolio in the prior year, and higher net interest income due to higher net interest margin, partially offset by lower balances.
Wealth Management
Reported net income was $428 million, an increase of $108 million or 34% from the prior year, and adjusted net income was $444 million, an increase of $124 million or 39%. Wealth and Asset Management reported net income was $342 million, an increase of $81 million or 31%, and adjusted net income was $358 million, an increase of $97 million or 37%, reflecting higher revenue, primarily due to the impact of stronger global markets and net sales, higher net interest income, as well as the inclusion of Burgundy Asset Management (Burgundy), partially offset by higher expenses. Insurance net income was $86 million, an increase of $27 million or 47% from the prior year, primarily due to favourable market movements in the current year.
Capital Markets
Reported net income was $638 million, an increase of $204 million or 47% from the prior year, and adjusted net income was $641 million, an increase of $204 million or 46%, reflecting higher revenue in Global Markets and Investment and Corporate Banking, and a lower provision for credit losses, partially offset by higher expenses.
Corporate Services
Reported net loss was $110 million, compared with a reported net loss of $157 million in the prior year, and adjusted net loss was $86 million, compared with an adjusted net loss of $154 million, with changes driven by higher treasury-related revenue.
Credit Quality
Total provision for credit losses was $739 million, compared with a provision of $1,054 million in the prior year. The provision for credit losses on impaired loans was $734 million, a decrease of $31 million, primarily due to lower provisions in Capital Markets and U.S. Banking. The provision for credit losses on performing loans was $5 million, compared with $289 million in the prior year. The performing provision in the current quarter was primarily driven by the net impact of model changes, largely offset by portfolio credit migration and lower portfolio balances, while the prior year reflected changes in the macroeconomic environment.
Refer to the Critical Accounting Estimates and Judgments section of BMO's 2025 Annual Report and Note 3 of the audited annual consolidated financial statements for further information on the allowance for credit losses as at October 31, 2025.
Capital
BMO's Common Equity Tier 1 (CET1) Ratio was 13.0% as at April 30, 2026, a decrease from 13.1% at the end of the first quarter of 2026, as internal capital generation was more than offset by the impact of the purchase of common shares for cancellation and higher source currency risk-weighted assets.
Non-GAAP and Other Financial Measures
Results and measures in this document are presented on a generally accepted accounting principles (GAAP) basis. Unless otherwise indicated, all amounts are in Canadian dollars and have been derived from our audited annual consolidated financial statements and our unaudited interim consolidated financial statements, prepared in accordance with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB). References to GAAP mean IFRS. We use a number of financial measures to assess our performance, as well as the performance of our operating segments, including amounts, measures and ratios that are presented on a non‑GAAP basis, as described below. We believe that these non‑GAAP amounts, measures and ratios, read together with our GAAP results, provide readers with a better understanding of how management assesses results.
Non-GAAP amounts, measures and ratios do not have standardized meanings under GAAP. They are unlikely to be comparable to similar measures presented by other companies and should not be viewed in isolation from, or as a substitute for, GAAP results.
Certain information contained in BMO's Second Quarter 2026 Management's Discussion and Analysis dated May 27, 2026, for the period ended April 30, 2026, is incorporated by reference into this document. For further details on the composition of our supplementary financial measures, refer to the Glossary of Financial Terms section of BMO's Second Quarter 2026 Report to Shareholders, which is available online at www.bmo.com/investorrelations and at www.sedarplus.ca.
Adjusted measures and ratios
Management considers both reported and adjusted results and measures to be useful in assessing underlying ongoing business performance. Adjusted results and measures remove certain specified items from revenue, non‑interest expense and income taxes, as detailed in the following table. Adjusted results and measures presented in this document are non‑GAAP. Presenting results on both a reported and an adjusted basis permits readers to assess the impact of certain items on results for the periods presented, and to better assess results excluding those items that may not reflect ongoing business performance. As such, the presentation may facilitate readers' analysis of underlying trends. Except as otherwise noted, management's discussion of changes in reported results in this document applies equally to changes in the corresponding adjusted results.
Net Interest Margin, excluding Global Markets and Insurance
Effective the first quarter of fiscal 2026, we report net interest margin on a basis that excludes net interest income from our Global Markets business in Capital Markets, and average earning assets from our Global Markets and Insurance businesses. Management considers this measure to be useful in allowing readers to assess performance of BMO's lending, investing and deposit-raising activities without the volatility that may be associated with market and trading-related activities. This measure replaces net interest margin, excluding trading and insurance previously disclosed, and prior periods have been reclassified to conform with the current period's presentation.
Tangible common equity and return on tangible common equity
Tangible common equity is calculated as common shareholders' equity, less goodwill and acquisition-related intangible assets, net of related deferred tax liabilities. Return on tangible common equity (ROTCE) is calculated as net income available to common shareholders, adjusted for the amortization of acquisition-related intangible assets and any impairments, as a percentage of average tangible common equity. ROTCE is commonly used in the North American banking industry and is meaningful as a consistent measure of the performance of businesses, whether they were acquired or developed organically.
Adjusting Items
Adjusted results in the current quarter and prior periods excluded the following items:
Impact of divestitures related to the announced sale of 138 branches in select U.S. markets, recorded in non-interest expense in Corporate Services. Q2-2026 included expenses of $26 million ($24 million after-tax), comprising a write-down of goodwill of $18 million and divestiture-related costs of $8 million. Prior periods included divestiture-related costs of $4 million ($3 million after-tax) in Q1-2026.
Acquisition and integration costs of $3 million ($2 million after-tax) in the current quarter. Prior periods included expenses of $9 million ($7 million after-tax) in Q1-2026, a reversal of $2 million ($1 million after-tax) in Q2-2025 and expenses of $10 million ($7 million after-tax) in Q1-2025. Amounts are recorded in non-interest expense in the related operating segment: Burgundy in Wealth Management and Bank of the West in Corporate Services.
Amortization of acquisition-related intangible assets of $93 million ($70 million after-tax) in the current quarter. Prior periods included $96 million ($71 million after-tax) in Q1-2026, $109 million ($81 million after-tax) in Q2-2025 and $106 million ($79 million after-tax) in Q1-2025. Amounts are recorded in non-interest expense in the related operating segment.
Change in the fair value of contingent consideration related to the acquisition of Burgundy, which reduced non-interest revenue in the current quarter by $7 million (pre-tax and after-tax), recorded in Wealth Management. Q1-2026 included a reduction of $16 million (pre-tax and after-tax). For further information, refer to Note 13 of the unaudited interim consolidated financial statements and Note 9 of the audited annual consolidated financial statements of BMO's 2025 Annual Report.
U.S. Federal Deposit Insurance Corporation (FDIC) special assessment recorded in non-interest expense in Corporate Services. Q1-2026 included a partial reversal of a prior charge of $47 million ($35 million after-tax). Prior periods included expenses of $5 million ($4 million after-tax) in Q2-2025 and a partial reversal of $7 million ($5 million after-tax) in Q1-2025.
Impact of aligning accounting policies for employee vacation across legal entities of $96 million ($70 million after-tax) in Q1-2025, recorded in non-interest expense in Corporate Services.
Adjusting items in aggregate decreased net income by $103 million in the current quarter, compared with a $84 million decrease in the prior year and a decrease of $62 million in the prior quarter. On a year-to-date basis, adjusting items in aggregate decreased net income by $165 million, compared with a decrease of $235 million in the prior year.
Non-GAAP and Other Financial Measures (1)
TABLE 1
(Canadian $ in millions, except as noted)
Q2-2026
Q1-2026
Q2-2025
YTD-2026
YTD-2025
Reported Results
Net interest income
5,268
5,643
5,097
10,911
10,495
Non-interest revenue
4,299
4,181
3,582
8,480
7,450
Revenue
9,567
9,824
8,679
19,391
17,945
Provision for credit losses
739
746
1,054
1,485
2,065
Non-interest expense
5,330
5,753
5,019
11,083
10,446
Income before income taxes
3,498
3,325
2,606
6,823
5,434
Provision for income taxes
868
836
644
1,704
1,334
Net income
2,630
2,489
1,962
5,119
4,100
Dividends on preferred shares and distributions on other equity instruments
139
81
142
220
207
Net income (loss) attributable to non-controlling interest in subsidiaries
4
(1)
2
3
6
Net income available to common shareholders
2,487
2,409
1,818
4,896
3,887
Diluted EPS ($)
3.53
3.39
2.50
6.92
5.34
Adjusting Items Impacting Revenue (Pre-tax)
Change in fair value of contingent consideration (2)
(7)
(16)
–
(23)
–
Impact of adjusting items on revenue (pre-tax)
(7)
(16)
–
(23)
–
Adjusting Items Impacting Non-Interest Expense (Pre-tax)
Acquisition and integration costs/reversal
(3)
(9)
2
(12)
(8)
