beat analysts' fourth-quarter earnings expectations after reporting higher earnings in its U.S. capital markets and asset management segments and setting aside less money to deal with loans that could potentially fail.
Net income for the three months ended Oct. 31 was $2.29 billion, compared with $2.3 billion in the same period a year ago, resulting in net earnings per share of $2.97.
The company's adjusted net income (excluding the impact of one-time items) was $2.51 billion, up from $1.54 billion a year ago, resulting in adjusted earnings per share of $3.28, beating analysts' expectations of about $3.04 per share.
BMO also announced it would raise its dividend by four cents to $1.67 per common share at the end of the first quarter of 2026.
For fiscal 2025, which ended Oct. 31, the bank reported net income of $8.72 billion, up 19% from the $7.3 billion it earned last year, while its adjusted net income was $9.2 billion, up 24% from last year.
“Fiscal 2025 was a strong year for BMO,” Chief Executive Darryl White said Thursday. “We have achieved both sustainable earnings growth and improved return on equity. We are investing capital to drive future growth and improve shareholder returns.”
The bank reported adjusted net income of $871 million in its U.S. business segment, up $518 million from the same quarter last year. Adjusted net income in the asset management and capital markets segments increased 27 percent and 97 percent, respectively.
The bank's total provision for credit losses (PCL) – the money banks set aside to deal with potentially bad loans – was $755 million in the fourth quarter, significantly lower than the $1.5 billion it set aside in the same period last year. Its PCL also decreased by $42 million compared to the third quarter.
“BMO enjoyed a relative tailwind from a credit perspective this quarter, with provisions coming in well below expectations as both working and impaired provisions declined from the third quarter,” John Aiken, an analyst at Jefferies Inc., said in a note.
Matthew Lee, an analyst at Canaccord Genuity Corp., said in a note that BMO's success “was driven primarily by better-than-expected performance in the U.S., including a turnaround in PCL execution.”
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