Bank of Montreal Secures Approvals for New Share Buyback Program

In a significant announcement for its stakeholders, the Bank of Montreal (BMO) has recently received regulatory nods from both the Toronto Stock Exchange (TSX) and the Office of the Superintendent of Financial Institutions Canada. The approvals allow BMO to initiate a new normal course issuer bid (NCIB), which will enable the bank to repurchase and cancel up to 30 million of its common shares. This development signals the bank's ongoing commitment to enhancing shareholder value through strategic capital management.

Context and Existing Buyback Scheme

Previously, BMO had an existing normal course issuer bid that commenced on January 22, 2025, aiming to buy back up to 20 million common shares before its planned conclusion on January 21, 2026. As of August 29, 2025, BMO had repurchased approximately 15.95 million shares, reflecting an average acquisition cost of $143.39 per share, totaling around $2.287 billion. When this buyback program concludes, the bank plans to transition seamlessly into the new scheme starting September 5, 2025, which is set to run until September 4, 2026.

The new NCIB structure presents an increase in the volume of shares BMO can repurchase, designed to provide greater flexibility and reflect the bank's ongoing dedication to returning excess capital to its shareholders. According to regulations set by TSX, the new plan allows BMO to repurchase about 4.2% of its public float, a testament to the bank's strong market position and financial prudence.

Mechanism of Share Repurchase

Under the new NCIB, the shares can be acquired through TSX facilities, as well as other designated markets and alternative Canadian trading systems. The repurchase plans can also be executed via various other means permitted under securities laws, including block purchases, private agreements, or automatic purchase plans.

BMO intends to establish an automatic securities purchase plan designated for the new bid, enabling its broker, BMO Nesbitt Burns Inc., to execute share purchases within a pre-defined framework during favorable market conditions. This strategic approach allows BMO to manage its share repurchases dynamically, ensuring alignment with market dynamics and shareholder interests.

Shareholder and Market Impact

Shareholders may benefit from this strategic move, as canceling these shares effectively reduces the overall share count, potentially enhancing earnings per share (EPS) over time. It is also an affirmation of BMO’s robust financial health, instilling confidence among investors regarding its capability to generate returns efficiently.

As of July 31, 2025, BMO reported approximately 716.36 million common shares outstanding with a public float of approximately 716.12 million shares. The data indicates that the average daily trading volume leading into August was around 2.87 million shares, providing ample liquidity for both the existing bid and the upcoming program.

Looking Ahead – Strategic Considerations

In concert with BMO’s growth trajectory, the new NCIB seeks to balance reinvestment opportunities within its core operations while simultaneously allowing for shareholder return strategies. As the bank navigates a competitive landscape marked by macroeconomic uncertainties, including inflation and evolving consumer behaviors, this buyback initiative underscores BMO's strategic priority of market resilience.

Moreover, BMO's leadership has indicated a cautious yet optimistic perspective on economic recovery phases. They anticipate potential impacts from factors such as fluctuating interest rates, currency valuations, and geopolitical developments. Given these dynamics, BMO’s management remains diligent in executing its policies surrounding capital provisions.

Conclusion

The approval of the new normal course issuer bid is poised to reinforce Bank of Montreal's commitment to value maximization for its stakeholders. By opting to repurchase common shares, BMO is demonstrating its capacity to adapt and thrive even amid fluctuating market conditions, showcasing an alignment between capital acquisition strategies and shareholder interests. Moving forward, market participants will closely monitor the execution of this buyback scheme as an integral part of BMO’s broader financial strategy and commitment to sustainable growth.

For further details, stakeholders can access BMO's announcements and other financial communications through their official channels.