Bank of Montreal (TSX: BMO) reported Q2 2026 net income of $2.63 billion, up from $1.96 billion a year earlier.
By segment, Capital Markets delivered the biggest year-over-year percentage gain. Reported net income rose to $638.0 million from $434.0 million last year, while adjusted net income increased to $641.0 million from $437.0 million. Canadian P&C earned $884.0 million, up from $764.0 million last year.
US Banking reported net income of $790.0 million, up from $601.0 million a year earlier while Wealth Management earned $428.0 million, compared with $320.0 million last year .
Revenue rose to $9.57 billion from $8.68 billion a year earlier. Breaking it down, net interest income increased to $5.27 billion from $5.10 billion last year while non-interest revenue climbed to $4.30 billion from $3.58 billion a year earlier.
The earnings improvement also came from credit. BMO’s provision for credit losses fell to $739.0 million from $1.05 billion a year earlier. Impaired-loan provisions were $734.0 million, down $31.0 million year-over-year, while performing-loan provisions dropped to $5.0 million from $289.0 million a year earlier.
BMO said the current quarter’s performing-loan provision reflected model changes that were largely offset by portfolio migration and lower portfolio balances, while the prior year reflected macroeconomic changes.
Diluted EPS rose to $3.53 from $2.50 a year earlier. Adjusted net income was $2.73 billion, up from $2.05 billion last year, while adjusted EPS increased to $3.67 from $2.62 a year ago.
Reuters reported that the adjusted EPS figure topped the average analyst estimate of $3.45, based on LSEG data.
BMO’s reported return on equity improved to 13.0% from 9.4% a year earlier and 12.1% in the prior quarter, while adjusted ROE rose to 13.5% from 9.8% a year earlier and 12.4% sequentially. BMO’s medium-term objective is adjusted ROE of 15% or more, so the quarter moved the bank closer to that target without fully clearing it.
The board declared a third-quarter dividend of $1.71 per common share, up $0.08 from last year and $0.04 from the prior quarter.
The bank also bought back 6.0 million common shares during the quarter at an average price of $193.47, equal to roughly $1.16 billion of repurchases.
BMO’s CET1 ratio was 13.0% as of April 30, 2026, down from 13.5% a year earlier and 13.1% at the end of the first quarter. The bank said internal capital generation was more than offset by common-share repurchases and higher source-currency risk-weighted assets.
Year-to-date net income was $5.12 billion, up 25% from $4.10 billion in the same period last year. Adjusted net income was $5.28 billion, up 22% from $4.34 billion. Year-to-date reported EPS rose to $6.92 from $5.34, while adjusted EPS increased to $7.15 from $5.66.
The biggest forward-looking item was the pending sale of BMO’s Transportation Finance and Vendor Finance businesses to Stonepeak. BMO entered into the agreement on May 11, 2026, with Stonepeak set to acquire the assets for cash consideration and a performance-based earn-out. BMO also plans to reinvest part of the consideration into an approximately 19.9% equity interest in the new entity.
The transaction met held-for-sale accounting requirements in the third quarter of fiscal 2026. BMO expects to recognize a charge of about $1.10 billion pre-tax, or $900.0 million after-tax, mainly tied to goodwill in Corporate Services and treated as an adjusting item. The transaction is expected to close in the fourth quarter of fiscal 2026, subject to regulatory approvals and customary conditions.
Bank of Montreal last traded at $223.64 on the TSX.
Information for this story was found via the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
