BMO Financial Group (TSX: BMO) reported Q4 fiscal 2025 results showing flat reported earnings but sharply higher adjusted profitability as credit loss provisions fell hard and revenue grew.
Quarterly revenue rose 4% YoY to $9.34 billion from $8.96 billion, driven by non-interest revenue up 9% to $3.85 billion and net interest income up 1% to $5.50 billion. The revenue mix was noisy, with trading shifting between net interest income and non-interest revenue, while reported net interest margin slipped to 1.67% from 1.70%.
Non-interest expense jumped 26% YoY to $5.56 billion from $4.43 billion, pushing the reported efficiency ratio to 59.5% from 49.4%. Even adjusted, expenses still rose 9% to $5.29 billion, led by higher employee compensation ($2.98 billion vs $2.69 billion) and premises and equipment ($1.22 billion vs $1.06 billion).
Total PCL fell to $755 million from $1.52 billion, as impaired-loan PCL declined to $750 million from $1.11 billion and performing-loan PCL dropped to $5 million from $416 million. Still, credit quality remained a swing factor, with gross impaired loans and acceptances rising to $7.09 billion from $6.95 billion sequentially and the impaired ratio edging up to 1.04% from 1.02%.
Pre-tax income increased marginally to $3.03 billion from $3.01 billion, while taxes rose to $735 million from $703 million. That left reported net income at $2.30 billion, down $9 million YoY, with diluted EPS at $2.97 versus $2.94.
Adjusted net income rose to $2.51 billion from $1.54 billion, and adjusted EPS increased to $3.28 from $1.90. Adjusting items reduced Q4 2025 net income by $219 million after tax, versus boosting Q4 2024 reported net income by $762 million after tax, largely tied to a prior-year legal provision reversal versus current-year goodwill write-downs and higher amortization, including an AIR MILES impairment.
By segment, Q4 reported net income was $752 million in Canadian P&C, $807 million in US Banking, $383 million in Wealth Management, and $521 million in Capital Markets. Corporate Services swung to a reported net loss of $168 million from reported net income of $721 million, while its adjusted net loss narrowed to $73 million from $147 million.
For fiscal 2025, revenue rose 11% to $36.27 billion, reported net income increased 19% to $8.73 billion, and reported EPS climbed 20% to $11.44. Full-year adjusted net income rose 24% to $9.25 billion and adjusted EPS rose 26% to $12.16, while PCL eased to $3.62 billion from $3.76 billion.
Capital softened modestly as buybacks and higher RWAs offset internal generation, with CET1 at 13.3% versus 13.6% a year earlier. BMO repurchased 8.0 million shares in the quarter and announced a $1.67 quarterly dividend for Q1 fiscal 2026, while Q4 dividends declared were $1.63 per share. Book value per share rose to $111.57 from $104.40, and the quarter-end closing share price was $174.23 versus $126.88 a year earlier.
The company showed Q4 dividends declared per common share of $1.63, while separately stating a $1.67 dividend declared for Q1 fiscal 2026.
BMO last traded at $177.02 on the TSX.
Information for this briefing was found via Sedar and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
