BMO Financial Group Reports Third Quarter 2025 Results
BMO's Third Quarter 2025 Report to Shareholders, including the unaudited interim consolidated financial statements for the period ended July 31, 2025, is available online at www.bmo.com/investorrelations, on the Canadian Securities Administrators' website at www.sedarplus.ca, and on the EDGAR section of the U.S. Securities and Exchange Commission's website at www.sec.gov.
Financial Results Highlights
Third Quarter 2025 compared with Third Quarter 2024:
• Reported net income1 of $2,330 million, an increase of 25% from $1,865 million; adjusted net income1 of $2,399 million, an increase of 21% from $1,981 million• Reported earnings per share (EPS)2 of $3.14, an increase of 26% from $2.48; adjusted EPS1, 2 of $3.23, an increase of 22% from $2.64• Provision for credit losses (PCL) of $797 million, compared with $906 million• Reported return on equity (ROE) of 11.6%, compared with 10.0%; adjusted ROE1 of 12.0%, compared with 10.6%• Common Equity Tier 1 (CET1) Ratio3 of 13.5%, compared with 13.0%
Year-to-Date 2025 compared with Year-to-Date 2024:
• Reported net income1 of $6,430 million, an increase of 28% from $5,023 million; adjusted net income1 of $6,734 million, an increase of 14% from $5,907 million• Reported EPS2 of $8.47, an increase of 29% from $6.57; adjusted EPS1, 2 of $8.89, an increase of 14% from $7.78• PCL of $2,862 million, compared with $2,238 million• Reported ROE of 10.5%, compared with 9.0%; adjusted ROE1 of 11.1%, compared with 10.7%
TORONTO, Aug. 26, 2025 /PRNewswire/ - BMO Financial Group (TSX:BMO) (NYSE:BMO) today announced financial results for the third quarter ended July 31, 2025. Reported net income was $2,330 million and reported EPS was $3.14, an increase from $1,865 million and $2.48 in the prior year. Adjusted net income was $2,399 million and adjusted EPS was $3.23, an increase from $1,981 million and $2.64 in the prior year.
"BMO delivered another quarter of strong earnings growth, with solid revenue performance and good expense management. Disciplined execution against each of our ROE rebuild strategies is driving tangible results through consistent positive operating leverage, improving credit performance and strengthening profitability, especially across our U.S. businesses," said Darryl White, Chief Executive Officer, BMO Financial Group.
"We continue to invest to drive sustainable growth across our businesses, including our recently announced acquisition of Burgundy Asset Management Ltd., adding talent and advancing digital and AI capabilities to deliver a differentiated client experience. We're leveraging our strong balance sheet to support client growth, while returning excess capital to our shareholders," concluded Mr. White.
Concurrent with the release of results, BMO announced a fourth quarter 2025 dividend of $1.63 per common share, unchanged from the prior quarter and an increase of $0.08 or 5% from the prior year. The quarterly dividend of $1.63 per common share is equivalent to an annual dividend of $6.52 per common share.
On August 26, 2025, we announced our intention to terminate our existing normal course issuer bid (NCIB) to purchase for cancellation up to 20 million common shares, and establish a new NCIB to purchase for cancellation up to 30 million common shares, subject to the approval of the Office of the Superintendent of Financial Institutions Canada (OSFI) and the Toronto Stock Exchange. As of August 22, 2025, the bank had repurchased 15.7 million shares. The existing NCIB will be terminated prior to commencing purchases under the new NCIB. Once approvals are obtained, the timing and amount of purchases under the new NCIB will be at management's discretion, based on factors such as market conditions and capital levels.
On June 19, 2025, we announced the signing of a definitive agreement to acquire Burgundy Asset Management Ltd., a leading independent wealth manager in Canada. This acquisition will expand BMO's wealth management and financial planning capabilities focused on high-net-worth and ultra-high-net-worth individuals, families, and institutions. The transaction is expected to close by the end of calendar 2025, subject to customary closing conditions, including regulatory approvals.
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.
Third Quarter 2025 Performance ReviewAdjusted 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. The order in which the impact on net income is discussed in this section follows the order of revenue, expenses and provision for credit losses, regardless of their relative impact.
Canadian P&CReported net income was $867 million, a decrease of $47 million or 5% from the prior year, and adjusted net income was $870 million, a decrease of $50 million or 5%. Results reflected a 6% increase in revenue, primarily driven by higher net interest income due to balance growth and higher net interest margin, more than offset by higher expenses and a higher provision for credit losses.
U.S. P&CReported net income was $709 million, an increase of $239 million or 51% from the prior year, and adjusted net income was $769 million, an increase of $230 million or 42%.
On a U.S. dollar basis, reported net income was $516 million, an increase of $172 million or 50% from the prior year, and adjusted net income was $560 million, an increase of $165 million or 42%. Results reflected a 3% increase in revenue, driven by higher net interest income and non-interest revenue, lower expenses and a lower provision for credit losses.
BMO Wealth ManagementReported net income was $436 million, an increase of $74 million or 20% from the prior year, and adjusted net income was $441 million, an increase of $77 million or 21%. Wealth and Asset Management reported net income was $341 million, an increase of $41 million or 14%, reflecting higher revenue due to the impact of stronger global markets and net sales, as well as strong growth in loan and deposit balances, partially offset by higher expenses. Insurance net income was $95 million, an increase of $33 million or 53% from the prior year, due to a gain on the sale of a non-strategic portfolio of insurance contracts.
BMO Capital MarketsReported net income was $438 million, an increase of $49 million or 13% from the prior year, and adjusted net income was $442 million, an increase of $48 million or 12%. Results reflected higher revenue in both Global Markets and Investment and Corporate Banking, higher expenses and a lower provision for credit losses.
Corporate ServicesReported net loss was $120 million, compared with reported net loss of $270 million in the prior year, and adjusted net loss was $123 million, compared with adjusted net loss of $236 million. The lower net loss was driven by higher revenue, partially offset by higher expenses.
Credit QualityTotal provision for credit losses was $797 million, compared with a provision of $906 million in the prior year. The provision for credit losses on impaired loans was $773 million, a decrease of $55 million, largely due to lower provisions in U.S. Commercial Banking and BMO Capital Markets, partially offset by higher provisions in Canadian Commercial Banking and Canadian unsecured consumer lending. There was a $24 million provision for credit losses on performing loans, compared with a $78 million provision in the prior year. The provision for credit losses on performing loans in the current quarter reflected an improvement in the macro-economic scenarios, as well as lower balances in certain portfolios, which were more than offset by the impact of uncertainty in credit conditions and portfolio credit migration.
Refer to the Critical Accounting Estimates and Judgments section of BMO's 2024 Annual Report and Note 4 of the audited annual consolidated financial statements for further information on the allowance for credit losses as at October 31, 2024.
CapitalBMO's Common Equity Tier 1 (CET1) Ratio was 13.5% as at July 31, 2025, relatively unchanged from the second quarter of 2025, as internal capital generation was offset by the impact of the purchase of common shares for cancellation under BMO's normal course issuer bid and higher source currency risk-weighted assets.
Non-GAAP and Other Financial MeasuresResults 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. 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 Third Quarter 2025 Management's Discussion and Analysis dated August 25, 2025 for the period ended July 31, 2025, 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 Third Quarter 2025 Report to Shareholders, which is available online at www.bmo.com/investorrelations and at www.sedarplus.ca.
Adjusted measures and ratiosManagement 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, provision for credit losses 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 basis 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 be reflective of ongoing business performance. As such, the presentation may facilitate readers' analysis of 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.
Tangible common equity and return on tangible common equityTangible 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 because it measures the performance of businesses consistently, whether they were acquired or developed organically.
Adjusting ItemsAdjusted results in the current quarter and prior periods excluded the following items:
Amortization of acquisition-related intangible assets and any impairments of $69 million ($93 million pre-tax) in Q3-2025, recorded in non-interest expense in the related operating group. Prior periods included $81 million ($109 million pre-tax) in Q2-2025, $79 million ($106 million pre-tax) in Q1-2025, $79 million ($107 million pre-tax) in Q3-2024 and Q2-2024, and $84 million ($112 million pre-tax) in Q1-2024.
Acquisition and integration costs of $4 million ($5 million pre-tax) in Q3-2025, recorded in non-interest expense in the related operating group. Costs related to the announced acquisition of Burgundy Asset Management Ltd. were recorded in BMO Wealth Management, Bank of the West in Corporate Services, AIR Miles in Canadian P&C, and Radicle and Clearpool in BMO Capital Markets. Prior periods included a reversal of $1 million ($2 million pre-tax) in Q2-2025, and expenses of $7 million ($10 million pre-tax) in Q1-2025, $19 million ($25 million pre-tax) in Q3-2024, $26 million ($36 million pre-tax) in Q2-2024, and $57 million ($76 million pre-tax) in Q1-2024.
Impact of a partial reversal of a U.S. Federal Deposit Insurance Corporation (FDIC) special assessment of $4 million ($5 million pre-tax) in Q3-2025, recorded in non-interest expense in Corporate Services. Prior periods included a $4 million ($5 million pre-tax) expense in Q2-2025, a $5 million ($7 million pre-tax) partial reversal in Q1-2025, a $5 million ($6 million pre-tax) expense in Q3-2024, a $50 million ($67 million pre-tax) expense in Q2-2024 and a $313 million ($417 million pre-tax) expense in Q1-2024.
Impact of aligning accounting policies for employee vacation across legal entities of $70 million ($96 million pre-tax) in Q1-2025, recorded in non-interest expense in Corporate Services.
Impact of a lawsuit associated with a predecessor bank, M&I Marshall and Ilsley Bank, recorded in Corporate Services in the prior year. Prior periods included $13 million ($18 million pre-tax) in Q3-2024, comprising interest expense of $14 million and non-interest expense of $4 million, and $12 million ($15 million pre-tax) in Q2-2024 and $11 million ($15 million pre-tax) in Q1-2024, both comprising interest expense of $14 million and non-interest expense of $1 million. For further information, refer to the Provisions and Contingent Liabilities section in Note 25 of the audited annual consolidated financial statements of BMO's 2024 Annual Report.
Net accounting loss of $136 million ($164 million pre-tax) on the sale of a portfolio of recreational vehicle loans related to balance sheet optimization in Q1-2024, recorded in non-interest revenue in Corporate Services.
Adjusting items in aggregate decreased net income by $69 million in the current quarter, compared with a decrease of $116 million in the prior year and a decrease of $84 million in the prior quarter. On a year-to-date basis, adjusting items in aggregate decreased net income by $304 million in the current year, compared with a decrease of $884 million in the prior year.
Non-GAAP and Other Financial Measures (1)
TABLE 1
(Canadian $ in millions, except as noted)
Q3-2025
Q2-2025
Q3-2024
YTD-2025
YTD-2024
Reported Results
Net interest income
5,496
5,097
4,794
15,991
14,030
Non-interest revenue
3,492
3,582
3,398
10,942
9,808
Revenue
8,988
8,679
8,192
26,933
23,838
Provision for credit losses
(797)
(1,054)
(906)
(2,862)
(2,238)
Non-interest expense
(5,105)
(5,019)
(4,839)
(15,551)
(15,072)
Income before income taxes
3,086
2,606
2,447
8,520
6,528
Provision for income taxes
(756)
(644)
(582)
(2,090)
(1,505)
Net income
2,330
1,962
1,865
6,430
5,023
Dividends on preferred shares and distributions on other equity instruments
66
142
51
273
234
Net income attributable to non-controlling interest in subsidiaries
3
2
–
9
6
Net income available to common shareholders
2,261
1,818
1,814
6,148
4,783
Diluted EPS ($)
3.14
2.50
2.48
8.47
6.57
Adjusting Items Impacting Revenue (Pre-tax)
Legal provision/reversal (including related interest expense and legal fees)
–
–
(14)
–
(42)
Impact of loan portfolio sale
–
–
–
–
(164)
Impact of adjusting items on revenue (pre-tax)
–
–
(14)
–
(206)
Adjusting Items Impacting Non-Interest Expense (Pre-tax)
Acquisition and integration costs/reversal
(5)
2
(25)
(13)
(137)
Amortization of acquisition-related intangible assets
(93)
(109)
(107)
(308)
(326)
Legal provision/reversal (including related interest expense and legal fees)
–
–
(4)
–
(6)
FDIC special assessment
5
(5)
(6)
7
(490)
Impact of alignment of accounting policies
–
–
–
(96)
–
Impact of adjusting items on non-interest expense (pre-tax)
