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Bank of Montreal Q3 Earnings Rise on Higher NII, Lower Provisions

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Key Takeaways

  • Bank of Montreal's Q3 adjusted EPS rose 22.3% Y/Y to C$3.23.
  • Results were boosted by higher net interest income and lower credit loss provisions.
  • Adjusted revenues rose 9.7%, while expenses climbed 6.7% during the quarter.

Bank of Montreal (BMO - Free Report) reported third-quarter fiscal 2025 (ended July 31) adjusted earnings per share of C$3.23, up 22.3% year over year.

Results benefited from higher net interest income (NII) and non-interest income. Further, the reduction in the provision for credit losses also supported performance. However, a slight decline in deposits and higher non-interest expenses acted as headwinds.

After considering non-recurring items, net income was C$2.33 billion ($1.68 billion), which rose 24.9% from the year-ago quarter.

BMO’s Q3 Revenues & Expenses Increase

Total revenues (on an adjusted basis), net of insurance claims, commissions and changes in policy benefit liabilities (CCPB), were C$8.99 billion ($6.52 billion), up 9.7% year over year.

NII rose 14.6% year over year to C$5.5 billion ($3.9 billion). Also, non-interest income came in at C$3.49 billion ($2.53 billion), up 2.8%.

Adjusted non-interest expenses increased 6.7% to C$5.01 billion ($3.63 billion).

The adjusted efficiency ratio (net of CCPB) was 55.8%, down from 57.3% as of July 31, 2024.

Provision for credit losses (adjusted) was C$797 million ($577.7 million) in the reported quarter, down 12% from the year-ago quarter.

Loans Rise & Deposits Decline for Bank of Montreal

As of July 31, 2025, total assets were C$1.43 trillion ($1 trillion), down slightly from the prior-quarter end.

Total net loans grew slightly on a sequential basis to C$677.1 billion ($490.9 billion). Total deposits decreased slightly to C$955.4 billion ($692.5 billion).

BMO’s Profitability Ratios & Capital Ratios Improve

Bank of Montreal’s return on common equity (as adjusted) was 12.0% in the fiscal third quarter compared with 10.6% on July 31, 2024. Adjusted return on tangible common equity was 15.6% compared with 14.2% in the year-ago quarter.

As of July 31, 2025, the Common Equity Tier-I ratio was 13.5%, up from 13.0% a year ago. The Tier-I capital ratio was 15.5% compared with the previous year’s 14.8%.

Our Take on Bank of Montreal

Bank of Montreal’s focus and efforts align with its organic and business restructuring strategies and are anticipated to support revenues in the upcoming period. However, elevated expenses and an uncertain macroeconomic backdrop stemming from tariffs are headwinds.

Bank Of Montreal Price, Consensus and EPS Surprise

 
   

Bank Of Montreal Price, Consensus and EPS Surprise

   
 

Currently, BMO carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of BMO’s Peers

Toronto-Dominion Bank’s (TD - Free Report) third-quarter fiscal 2025 (ended July 31) results were encouraging. Quarterly adjusted net income of $3.9 billion ($2.81 billion) up 6.2% year over year.

TD’s quarterly performance was aided by growth in net interest income, non-interest income, and higher deposit balances. A decline in provisions for credit losses also provided support. However, lower loan balances and higher expenses acted as headwinds.

Canadian Imperial Bank of Commerce (CM - Free Report) reported third-quarter fiscal 2025 (ended July 31) adjusted earnings per share of C$2.16, which increased 11.9% from the prior-year quarter.

CM’s results benefited from an improvement in revenues. Also, loans and deposit balances increased in the quarter. However, higher provisions and expenses  were an undermining factor.


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