BMO Financial Group (BMO) — Q3 2026 Earnings Preview
Key Points: What to Watch for in Q3 2026
| Factor | Details & Signals to Watch |
|---|---|
| Revenue Growth | Consensus: $6,963M (+3% QoQ, +4% YoY). Look for continued double-digit YoY growth in fee revenue (Capital Markets, Wealth, TPS), and signs of stabilization or acceleration in NII as loan growth resumes. |
| Net Income / EPS | Consensus: $1,847M net income, $1.84 EPS. Compare to Q2 2026 actuals ($2,630M, $3.53 EPS) and Q3 2025 actuals ($1,962M, $2.50 EPS). Watch for sustainability of recent strong YoY EPS growth (+41% in Q2). |
| Net Interest Margin (NIM) | Q2 2026: 2.29% (ex-Markets/Insurance), down 4 bps QoQ but up 12 bps YoY. Guidance is for "relatively stable" NIM; watch for any sequential pressure from liquidity/corporate mix or deposit competition. |
| Operating Leverage | Q2 2026: +4.1%. Management targets positive operating leverage for FY26. Monitor expense discipline and efficiency ratio (Q2: 54.4%). |
| Credit Quality | Q2 2026 PCL: $739M (45 bps), flat QoQ, down YoY. Guidance: impaired PCL to remain in mid-40s bps range. Watch for trends in Canadian unsecured consumer credit and U.S. commercial recoveries. |
| U.S. Banking Loan Growth | Q2 2026: Commercial loans up 4% QoQ (as-at), broad-based. Management expects mid-single-digit loan growth for the rest of FY26. Watch for confirmation of this inflection and sustainability. |
| Capital & Buybacks | CET1: 13.0% at Q2, with 28 bps uplift expected from Transportation Finance sale in Q4. Ongoing NCIB buybacks (6M shares in Q2). Watch for capital deployment updates and pro forma ratios. |
| Dividend | Q3 2026 dividend declared: $1.71/share (+5% YoY, +2% QoQ). Monitor for commentary on payout intentions and future increases. |
| Segment Performance | Capital Markets: Q2 2026 net income +47% YoY, Wealth +34% YoY, U.S. Banking +32% YoY, Canadian P&C +15% YoY. Watch for continued outperformance and fee momentum. |
| Guidance/Outlook Updates | Any changes to FY26/FY27 ROE targets (15% exit FY27), expense growth (mid-single digits), loan growth (Canada/U.S.), and credit normalization path. |
Q3 2026 Consensus Estimates
| Metric | Q3 2026E (Consensus) | Q2 2026 Actual | Q3 2025 Actual | QoQ Change | YoY Change |
|---|---|---|---|---|---|
| Revenue ($M) | 6,963 | 6,744 | 6,416 | +3% | +9% |
| Net Income ($M) | 1,847 | 1,751 | 1,534 | +5% | +20% |
| EPS (GAAP, $) | 1.84 | 2.37 | 2.06 | -22% | -11% |
Note: Consensus figures are in USD, company reports in CAD. Use for directional comparison only.
Q3 2025 Actuals (Restated Where Available)
| Metric | Q3 2025 Actual (CAD) | Notes |
|---|---|---|
| Revenue ($M) | $8,988 | Reported, per Q3 2025 press release |
| Net Income ($M) | $2,330 | Reported, per Q3 2025 press release |
| Adjusted Net Income | $2,399 | Adjusted, per Q3 2025 press release |
| Diluted EPS ($) | $3.14 | Reported |
| Adjusted EPS ($) | $3.23 | Adjusted |
| ROE (%) | 11.6 | Reported |
| Adjusted ROE (%) | 12.0 | Adjusted |
| PCL ($M) | $797 | Total provision for credit losses |
| CET1 Ratio (%) | 13.5 |
Q2 2026 Actuals (Most Recent Quarter)
| Metric | Q2 2026 Actual (CAD) | QoQ Change | YoY Change |
|---|---|---|---|
| Revenue ($M) | $9,567 | -3% | +10% |
| Net Income ($M) | $2,630 | +6% | +34% |
| Adjusted Net Income | $2,733 | +7% | +34% |
| Diluted EPS ($) | $3.53 | +4% | +41% |
| Adjusted EPS ($) | $3.67 | +6% | +40% |
| ROE (%) | 13.0 | +90 bps | +370 bps |
| Adjusted ROE (%) | 13.5 | +110 bps | +370 bps |
| PCL ($M) | $739 | -1% | -30% |
| CET1 Ratio (%) | 13.0 | -10 bps | -50 bps |
Q3 2026 Preview: Most Important Factors
1. Revenue and Fee Momentum
- Q2 2026 saw robust fee growth in Capital Markets (+19% YoY), Wealth Management (+21% YoY), and Treasury & Payments (+12% YoY).
- Watch for continued double-digit YoY growth in these segments, especially as management has highlighted "broad-based revenue momentum" and "continued strong fee growth."
- NII growth will be scrutinized for signs of stabilization or acceleration as loan growth resumes.
2. Loan Growth Inflection
- U.S. Banking: Commercial loans up 4% QoQ (as-at), with management stating "inflection point" reached and expecting "mid-single-digit loan growth for the rest of the year."
- Canadian Commercial Banking: Sequential loan growth of 2% in Q2, described as an "inflection point," with expectations for continued low single-digit growth.
- Investors will look for confirmation that these trends are sustainable and broad-based.
3. Net Interest Margin (NIM) Stability
- Q2 2026 NIM ex-Markets/Insurance: 2.29%, down 4 bps QoQ, up 12 bps YoY.
- Management expects "relatively stable" NIM, with tailwinds from ladder reinvestments and deposit mix, but notes some pressure from higher liquidity/corporate assets and competitive deposit pricing.
- Any sequential NIM compression or expansion will be closely watched.
4. Credit Quality and PCLs
- Q2 2026 PCL: $739M (45 bps), flat QoQ, down YoY.
- Guidance: Impaired PCL to remain in the mid-40s bps range.
- Key risks: Canadian unsecured consumer credit (delinquencies, insolvencies), U.S. commercial recoveries, and any spillover into secured portfolios.
- Any deviation from guidance or signs of deterioration/improvement will be a focus.
5. Expense Discipline and Operating Leverage
- Q2 2026 adjusted efficiency ratio: 54.4%, operating leverage +4.1%.
- Management maintains outlook for mid-single-digit core expense growth and positive operating leverage for FY26.
- Investors will look for evidence of continued cost control and realization of announced efficiency programs ($250M annualized savings targeted).
6. Capital and Buybacks
- CET1 at 13.0% in Q2, with 28 bps uplift expected from Transportation Finance sale in Q4.
- Ongoing NCIB buybacks (6M shares in Q2).
- Watch for capital deployment updates, pro forma ratios, and any commentary on further buybacks or dividend increases.
7. Guidance and Strategic Progress
- Management reiterated target to exit FY27 at 15% ROE, with U.S. Banking at 12%.
- Any updates to these targets, or commentary on the pace of progress, will be important.
- Commentary on macro risks (oil prices, inflation, trade policy, Middle East conflict) and their impact on outlook.
How Did They Report Last Year? (Q3 2025)
- Q3 2025 was a strong quarter, but Q2 2026 and recent quarters have seen even stronger YoY growth, making for a tougher comparable.
- Q3 2025 revenue: $8,988M (+10% YoY at the time), net income: $2,330M (+25% YoY), adjusted EPS: $3.23 (+22% YoY).
- Q3 2026 will be compared against this high base, especially for fee revenue and EPS growth.
Summary and Conclusions
- BMO enters Q3 2026 with strong momentum: double-digit YoY growth in net income, EPS, and fee revenue; positive operating leverage; and improving ROE.
- Key focus areas for Q3: sustainability of fee growth, confirmation of loan growth inflection (especially in U.S. commercial), NIM stability, and credit quality.
- Expense discipline and capital deployment remain critical, with investors watching for continued buybacks and realization of efficiency gains.
- Year-over-year comparables are tough: Q3 2025 was a strong quarter, so maintaining high growth rates will be challenging.
- Management’s tone is confident: reiterating medium-term ROE targets, highlighting completion of U.S. portfolio optimization, and emphasizing strategic investments in AI and digital.
- Risks: Macro headwinds (oil, inflation, trade, geopolitics), Canadian consumer credit, and competitive deposit environment.
Bottom Line: The market will be looking for confirmation that BMO can sustain its recent strong performance, deliver on loan growth and margin stability, and continue progressing toward its 15% ROE target, despite tougher YoY comps and a more uncertain macro backdrop.
