BMO Financial Group reported sharply divergent GAAP and adjusted third-quarter 2026 results as a large charge tied to the planned sale of its Transportation Finance and Vendor Finance businesses reduced reported earnings.
Reported net income fell 25% year-over-year to C$1.75 billion from C$2.33 billion, while diluted EPS declined 24% to C$2.38. Adjusted net income moved in the opposite direction, increasing 19% to C$2.86 billion, while adjusted EPS rose 22% to C$3.96.
The primary difference was recorded in Corporate Services. BMO recognized a C$962 million after-tax charge, or C$1.09 billion before tax, primarily related to goodwill associated with the announced sale of the Transportation Finance and Vendor Finance businesses.
Underlying business trends were substantially stronger. Every operating business segment delivered record pre-provision pre-tax earnings. Canadian P&C reported net income of C$980 million, up 16%, while U.S. Banking reported C$868 million, up 13%.
Capital Markets net income jumped 46% to C$645 million, driven by higher revenue in Global Markets and Investment and Corporate Banking and lower credit-loss provisions. Adjusted Wealth Management net income increased 22% to C$480 million.
Credit performance also improved. Total provision for credit losses declined to C$722 million from C$797 million, while BMO’s CET1 ratio remained 13%. The bank announced its intention to establish a new normal-course issuer bid for up to 25 million common shares, subject to regulatory and exchange approval.
KEY QUOTES:
“Every business segment delivered record pre-provision pre-tax earnings, with sustained momentum in Capital Markets and Wealth Management, and continued commercial loan growth in both Canada and the U.S.”
Darryl White, CEO of BMO Financial Group
