TLDR
- BMO stock climbs as Q2 profit jumps 34% and credit losses fall sharply
- Bank of Montreal gains after stronger EPS, lower provisions, and dividend hike
- BMO rises as earnings beat last year and credit quality shows improvement
- BMO stock edges higher after profit growth, lower PCL, and stronger returns
- Bank of Montreal shares gain as Q2 income rises and dividend moves higher
Bank of Montreal (BMO) stock rose after the lender reported stronger second-quarter profit and lower credit losses. BMO closed at $163.14, up $1.30, or 0.80%, before slipping slightly after hours. The results showed better earnings quality, stronger returns, and firmer revenue across key business lines.
BMO Stock Gains After Strong Second-Quarter Earnings
Bank of Montreal reported net income of $2.63 billion for the quarter ended April 30, 2026. That marked a 34% increase from $1.96 billion in the same quarter last year. Additionally, reported earnings per share rose 41% to $3.53.
Adjusted net income reached $2.73 billion, compared with $2.05 billion a year earlier. Adjusted earnings per share climbed 40% to $3.67. The bank delivered broad profit growth despite a competitive banking market.
BMO also improved profitability as reported return on equity reached 13.0%. Adjusted return on equity rose to 13.5%, compared with 9.8% last year. Stronger fee revenue helped support gains across several divisions.
Credit Losses Fall as Core Banking Units Improve
Provision for credit losses dropped to $739 million from $1.05 billion a year earlier. The decline gave BMO more support for earnings growth. Besides, lower provisions helped offset pressure from expenses and capital use.
Canadian personal and commercial banking reported net income of $884 million. That result increased 15% from the prior year. Revenue rose because net interest income improved and card-related fees increased.
U.S. Banking also posted stronger results, with reported net income of $790 million. Adjusted net income rose to $847 million, supported by lower credit losses. A weaker U.S. dollar reduced reported growth in Canadian-dollar terms.
Wealth, Capital Markets, and Dividend Support Momentum
Wealth Management reported net income of $428 million, up 34% from last year. The division benefited from stronger global markets and net sales. Burgundy Asset Management contributed to growth after its inclusion in results.
Capital Markets delivered net income of $638 million, up 47% year over year. The unit gained from higher revenue in Global Markets and Investment and Corporate Banking. Lower credit losses added further support to the segment.
BMO raised its quarterly dividend to $1.71 per common share. That marked a 2% increase from the prior quarter and 5% from last year. During the quarter, the bank also bought back 6.0 million common shares.
BMO Plans Asset Sale While Capital Ratio Eases
BMO entered a deal to sell its Transportation Finance and Vendor Finance businesses to Stonepeak. The transaction includes related loan portfolios in U.S. Banking and Canadian P&C. BMO will also take about a 19.9% equity stake in the new entity.
The bank expects a pre-tax charge of about $1.1 billion from the planned sale. The after-tax impact may reach about $0.9 billion. The deal should close in the fourth quarter of fiscal 2026, subject to approvals.
BMO’s CET1 ratio stood at 13.0% at quarter-end. That declined from 13.1% in the first quarter. However, the ratio remained solid as earnings growth balanced buybacks and higher risk-weighted assets.
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