BMO Financial quarterly profit rises on lower provisions (updated)
25/02/2026 11:11
Adds details from conference call throughout, National Bank results in paragraph 4, shares in paragraph 5 BMO's balance sheet optimization will be completed next quarter, CEO says Expects commercial loan growth in the second half of the year Provisions for credit losses at BMO lower than expected Earnings per share of C$3.48 exceed estimate of C$3.20 By Nivedita Balu and Pritam Biswas Feb 25 (Reuters) - Canadian bank BMO Financial BMO.TO beat analysts' estimates for first-quarter profit, after it set aside less money than expected to cover potential loan defaults, sending shares to a record high on Wednesday. So far three of the big six Canadian banks have reported strong results as Prime Minister Mark Carney has diversified trade ties, helping Canada's economy to weather U.S. tariffs better than expected in the November-January quarter. BMO, the third-largest Canadian bank by market capitalization, reported record revenue in each of its segments, helped by strong fee growth at its wealth management and capital markets business, where adjusted earnings rose 16% and 11% respectively. Its peer National Bank of Canada NA.TO also beat profit estimates after its acquisition of Canadian Western Bank boosted its loan book and its domestic personal and commercial banking business. BMO's shares rose as much as 4.7% to touch a record high of C$204.57. National Bank's shares also hit a record of C$187.05 and rose as much as 5.4% in Toronto. "Strong across the board," RBC Capital Markets analyst Darko Mihelic said on BMO's results. BALANCE SHEET OPTIMIZATION IS NEARLY COMPLETE BMO has strengthened its U.S. business by cleaning up bad loans to ease loan loss provisions and closed some branches after the acquisition of Bank of the West. It also shifted its loan book toward higher-margin, faster-growing commercial markets. That helped the U.S. segment, its second-largest business, to record 13% growth in adjusted net income. In Canada, where it is focused on growing deposits and new areas of lending, earnings grew 8%. "By the end of next quarter, we will be effectively complete with our balance sheet optimization efforts and expect to see positive commercial loan growth in the second half of the year, supported by currently strong pipelines," CEO Darryl White told analysts. "With the U.S. economy expected to outpace Canada for a fourth straight year, and with our business mix, we're well-positioned to capture growth opportunities as business activity expands." In the first quarter, loan growth and deposits in the U.S. suffered. In Canada, loans grew just 2% and deposits fell 1%. Provisions for credit losses at BMO came in at C$746 million, compared with C$1.01 billion a year ago. Analysts had forecast C$825.8 million, according to LSEG data. BMO Financial posted an adjusted profit of C$2.55 billion ($1.86 billion), for the quarter ended January 31, compared with C$2.29 billion. On a per-share basis, it earned C$3.48, beating the estimate of C$3.20. ($1 = 1.3695 Canadian dollars) (Reporting by Pritam Biswas in Bengaluru and Nivedita Balu in Toronto; Editing by Shilpi Majumdar and Barbara Lewis) ((Pritam.Biswas@thomsonreuters.com;))