Canada's third-largest bank posts its strongest Q2 earnings growth in years, raising its quarterly dividend and beating analyst forecasts
Bank of Montreal delivered a sharper-than-expected second-quarter profit on Wednesday. Its net income climbed to $2.63 billion for the quarter ended April 30, up from $1.96 billion a year ago. That's a gain of more than 30% that surpassed what analysts had pencilled in.
On an adjusted basis, BMO earned $3.67 per diluted share, beating the average analyst estimate of $3.45 per share, according to LSEG Data & Analytics.
The result marks a continuation of the bank's recovery trajectory, building on a Q1 2026 that also came in ahead of consensus.
Capital markets and US division lead the charge
The standout performers were BMO's capital markets unit and its United States banking operations.
Capital markets delivered a 47% profit surge to $638 million, fuelled by stronger global markets activity and investment and corporate banking revenue. The US division, meanwhile, posted $790 million, compared with $601 million a year earlier.
Fee-driven revenue across global markets and investment and corporate banking drove much of the capital markets jump.
Quarterly revenue climbed 10% to $9.57 billion, while provisions for credit losses — funds set aside against potential loan defaults — dropped to $739 million from $1.05 billion a year earlier, a decline that added considerable lift to the bottom line.
CEO Darryl White pointed to broad-based momentum across the bank's divisions.
"We once again strengthened ROE and delivered strong EPS growth, driven by robust fee revenue across capital markets, wealth management and treasury and payments," White said in the bank's earnings statement.
"We delivered solid sequential commercial banking loan growth in both Canada and the United States, reflecting improving client activity and the strength of our bankers."
Canadian banking and wealth management hold firm
Canadian personal and commercial banking contributed $884 million to the quarter's result, a 16% gain on the $764 million posted a year earlier, driven by higher revenue and easing credit costs despite a rise in expenses.
For mortgage brokers monitoring the appetite of Canada's Big Six for residential and commercial lending, the numbers suggest a lender that is leaning into growth rather than pulling back.
Wealth management added $428 million in profit, a 34% jump from $320 million a year earlier.
The division's performance was bolstered by the ongoing integration of Burgundy Asset Management, the Toronto-based firm BMO acquired to deepen its high-net-worth client offering.
Read more: Bank of Montreal weighs sale of select US branches after major acquisition
The board declared a quarterly dividend of $1.71 per common share, up from $1.67 per share — the latest in a sequence of increases that reflects the bank's improving capital position.
Wednesday's results make BMO the second major Canadian bank to report for the fiscal second quarter.
Bank of Nova Scotia posted results earlier in the week that also topped analyst expectations, with National Bank, Royal Bank of Canada, TD Bank, and CIBC all scheduled to release figures later this week.
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