$3.96 in adjusted earnings per share, up 22% year-over-year, headlined BMO Financial Group's (BMO) third-quarter fiscal 2026 results released August 25. Adjusted net income reached a record $2.9 billion, with pre-provision pretax earnings (PPPT) climbing 13% to $4.5 billion across all four operating segments. Reported EPS was $2.38, after a $973 million goodwill charge tied to the announced sale of the transportation finance and vendor finance businesses.
| Metric | Q3 2026 | Change |
|---|---|---|
| Adjusted EPS | $3.96 | +22% YoY |
| Adjusted net income | $2.9B | record |
| PPPT | $4.5B | +13% YoY; record all 4 segments |
| ROE (adjusted) | 14.0% | +200bps YoY |
| ROTCE (adjusted) | 18.0% | +240bps YoY |
| ROA | 72bps | reported |
| NIM ex Markets | 226bps | +5bps YoY; -3bps QoQ |
| Total PCL | $722M | from $739M prior quarter |
| CET1 ratio | 13.0% | flat QoQ |
Revenue grew 11% year-over-year. Non-interest revenue rose 26% (15% excluding trading) on higher wealth management fees, debt underwriting, TPS fees, and lending fees. The efficiency ratio was 54.9%; operating leverage, 1.6%.
Capital deployment and the commodity thesis
BMO announced the exit from 138 U.S. branches (carrying approximately $5 billion in deposits), the transportation finance portfolio (approximately USD 10 billion in loan balances), and Moneris Canada. CFO Rahul Nalgirkar said these dispositions are expected to generate 50 basis points of CET1 on closing, with the lost earnings split roughly two-thirds from U.S. Banking and one-third from Canadian P&C. Redeployment toward higher-return segments, Nalgirkar said, keeps BMO's Investor Day EPS and PPPT growth commitments intact. BMO also announced a new normal-course issuer bid covering up to 25 million shares (approximately 3.6% of shares outstanding), pending regulatory approval.
Capital Markets produced record PPPT of $903 million, up 39%, on strong equity trading and debt underwriting. Global Markets revenue rose 27%. BMO also announced an agreement to acquire the Capital Markets business of Euroz Hartleys Group in Australia, combining its metals and mining franchise with one of Australia's leading investment banking and equity distribution platforms as demand for critical minerals and energy infrastructure grows globally. Group Head Alan Tannenbaum named metals and mining, power utilities and infrastructure, and industrial sectors as the business lines with the clearest runway, crediting a multi-year investment cycle in people and product breadth for the durability of the results.
Credit quality and the tariff variable
Chief Risk Officer Piyush Agrawal reported total PCL of $722 million, down from $739 million the prior quarter. Impaired losses came to $708 million (41 basis points), the lowest in ten quarters. Gross impaired loans stand at $6.8 billion (97 basis points), down 4 basis points sequentially; the performing allowance is $4.8 billion, covering 69 basis points of performing loans. Agrawal said BMO expects Q4 impaired PCL to track in line with Q3, with no change to the 2026 full-year guidance.
The live variable is Canada-U.S. trade policy. The latest round of 338 tariffs applies to 5% of Canada-to-U.S. exports, and CEO Darryl White called the direct credit exposure "very, very manageable," noting that less than 1% of the loan book carries direct trade exposure, with a significant portion of that to investment-grade borrowers. U.S. Banking ROE was 9.8% (up 90 basis points year-over-year) with ROTCE of 17.3%. White reiterated the medium-term target of 15% ROE exiting fiscal 2027.