BMO Financial Group reported sharply divergent third-quarter 2026 GAAP and adjusted earnings as a large charge related to the planned sale of its Transportation and Vendor Finance businesses weighed on reported profit.
Reported net income fell 25% year-over-year to C$1.75 billion from C$2.33 billion, while reported diluted EPS declined 24% to C$2.38 from C$3.14.
Adjusted net income moved in the opposite direction, increasing 19% to C$2.86 billion from C$2.40 billion. Adjusted EPS increased 22% to C$3.96, and adjusted return on equity improved to 14% from 12%.
The gap between reported and adjusted performance was primarily attributable to the announced divestiture of BMO’s Transportation Finance and Vendor Finance businesses.
Corporate Services recorded a C$1.15 billion reported net loss that included a C$962 million after-tax charge, or C$1.09 billion before taxes, primarily associated with reducing goodwill related to those businesses.
Excluding the divestiture impact, Corporate Services posted an adjusted net loss of C$178 million.
Underlying performance across several of BMO’s operating businesses improved.
Capital Markets net income jumped 46% to C$645 million, with adjusted net income up 45% to C$649 million as Global Markets and Investment and Corporate Banking revenue increased and credit-loss provisions declined.
Wealth Management adjusted net income increased 22% to C$480 million. Within that segment, Wealth and Asset Management adjusted profit rose 31% to C$392 million.
Credit trends also improved. Provision for credit losses declined to C$722 million from C$797 million, including C$708 million related to impaired loans.
BMO ended the quarter with a Common Equity Tier 1 ratio of 13%, unchanged sequentially.
The bank also repurchased 3.8 million common shares during the quarter and announced plans to establish a new normal course issuer bid covering as many as 25 million shares, subject to regulatory and exchange approvals.
KEY QUOTES:
“BMO delivered another strong quarter, driven by disciplined execution against the commitments we made at our March Investor Day to elevate ROE and accelerate growth.”
“Every business segment delivered record pre-provision pre-tax earnings.”
Darryl White, CEO of BMO Financial Group
