#Canada #Toronto #financial results #BMO Financial Group #Earnings Growth

BMO Financial Group Reports First Quarter 2026 Results

On February 25, 2026, BMO Financial Group (TSX: BMO, NYSE: BMO) unveiled its first-quarter report for the fiscal year ending January 31, 2026. The financial results reflect a strong performance, marking an upward trajectory in net income and earnings per share compared to the previous year.

Key Financial Highlights

During Q1 2026, BMO reported net income of $2,489 million, a substantial increase of 16% from $2,138 million reported in the same quarter last year. The adjusted net income rose to $2,551 million, an 11% boost from last year's $2,289 million. Earnings per share (EPS) also witnessed a notable increase, with reported EPS climbing 20% to $3.39 from $2.83, while adjusted EPS reached $3.48, growing 15% from the previous year’s $3.04.

Additionally, the provision for credit losses decreased to $746 million from $1,011 million in the prior year, indicating improved credit quality. The return on equity (ROE) improved to 12.1%, up from 10.6% a year earlier, and the adjusted ROE stood at 12.4%, compared to 11.3% in the previous year. BMO's Common Equity Tier 1 (CET1) Ratio was reported at 13.1%, slightly down from 13.6% in the previous quarter, primarily impacted by the acquisition expenditures and share buybacks.

Operational Efficiency and Revenue Growth

BMO's CEO Darryl White expressed confidence in the results, stating, "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."

All of BMO's operating segments reported record revenues this quarter, with significant fee growth in market-driven businesses. The strategic focus on managing expenses and enhancing operational efficiency has created opportunities for investments in technology and talent, vital for sustaining future growth. BMO's effective credit management strategy has also aligned well with the organization’s anticipations, supporting its overall financial health.

Segment Performance Breakdown

The strong earnings performance was evident across various operational segments:

• - Canadian Personal and Commercial Banking: Reported net income surged to $948 million, up 8% driven by a 7% increase in revenue, aided by higher net interest income and increased non-interest revenue from card fees.
• - U.S. Banking: The segment saw a reported net income rise of 17% to $742 million, bolstered by a lower provision for credit losses, although they faced a 5% negative impact from currency fluctuations.
• - Wealth Management: This sector reported net income of $352 million, showing a 7% increase, positively influenced by robust market performance and strong asset growth, despite facing higher expenses.
• - Capital Markets: Reported net income of $657 million, an increase of 11%, primarily driven by heightened equities trading revenue and advisory fees.
• - Corporate Services: This segment reported a narrower loss of $210 million, improving from a loss of $291 million in the prior year, correlating with the alignment of accounting policies and partial reversals of assessments.

Future Strategic Directions

BMO's commitment to disciplined execution in line with its strategic goals is underscored by these favorable results, as cited by Mr. White. The bank aims to elevate returns while concentrating on profitable earnings growth and delivering substantial value for clients and shareholders. In line with this, BMO has declared a quarterly dividend of $1.67 per common share, reflecting a consistent payout that has increased by 5% from last year.

Conclusion

BMO's strong start to 2026 sets a positive precedent as the financial institution continues to navigate market challenges and opportunities. The focus on operational efficiency, sound credit management, and strategic investments in technology and talent will be pivotal for BMO’s trajectory moving forward. With sustained momentum in key performance indicators, the outlook remains positive for the coming quarters, aiming to maintain competitive advantage and stakeholder value in an evolving financial landscape.