Bank of Montreal (TSX: BMO) reported Q3 2026 net income of $1.75 billion, down from $2.33 billion a year earlier, after taking a large charge tied to the planned sale of its Transportation Finance and Vendor Finance businesses.
Adjusted net income moved in the opposite direction, rising to $2.86 billion from $2.40 billion last year. Adjusted EPS increased to $3.96 from $3.23 a year earlier, topping the $3.76 average analyst estimate compiled by LSEG.
By segment, Capital Markets posted the strongest year-over-year percentage increase. Reported net income rose to $645.0 million from $442.0 million last year, while adjusted net income reached $649.0 million from $446.0 million.
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Canadian P&C earned $980.0 million, up from $849.0 million last year. US Banking reported $868.0 million, versus $767.0 million a year earlier while Wealth Management earned $408.0 million, up from $392.0 million last year.
Revenue rose to $9.90 billion from $8.99 billion a year earlier. Net interest income increased to $5.57 billion from $5.50 billion last year, while non-interest revenue rose to $4.33 billion from $3.49 billion.
Provision for credit losses declined to $722.0 million from $797.0 million last year as impaired-loan provisions fall to $708.0 million from $773.0 million a year earlier.
Reported ROE dropped to 8.4% from 11.6% last year, while adjusted ROE increased to 14.0% from 12.0%. BMO’s medium-term objective remains adjusted ROE of at least 15%.
The reported earnings decline was largely driven by $1.11 billion of pre-tax divestiture-related adjustments, including a $1.09 billion charge associated with the Transportation Finance and Vendor Finance sale. The after-tax impact of divestiture items totaled $973.0 million.
BMO’s CET1 ratio was 13.0% as of July 31, unchanged from the prior quarter and down from 13.5% a year earlier.
The board maintained its quarterly dividend at $1.71 per common share, up 5% year over year. BMO also repurchased 3.8 million shares during the quarter at an average price of $239.37 and announced plans for a new buyback covering up to 25 million shares, subject to regulatory and exchange approval.
Bank of Montreal last traded at $238.63 on the TSX.
