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BMO: BMO Financial Group Delivers Strong Q4 2025 Results with Record Net Income

BMO Financial Group reported adjusted EPS of $3.28 for Q4 2025 and $12.16 for the year, with actual EPS coming in at $3.26, beating analyst estimates of $3.02. The bank delivered record net income of $9.2 billion and increased full-year ROE by 150 basis points to 11.3%, exiting Q4 with momentum at 11.8%. Pre-provision pre-tax profit (PPPT) grew 18% to $15.8 billion, and the efficiency ratio improved by 230 basis points to 56.3%. Impaired provisions moderated to 44 basis points.

BMO.TO

CAD 178.24

0.8%

A-Score: 6.7/10

Publication date: December 4, 2025

Full Report

Author: Analystock.ai

📋 Highlights
  • Record Net Income & ROE Growth: BMO posted record net income of $9.2B in 2025, with full-year ROE rising 150 bps to 11.3% (11.8% in Q4).
  • Capital Returns & Dividend Increase: Returned $8B+ to shareholders via buybacks and dividends, including a 5% hike to $1.67/share.
  • PPPT Growth & Efficiency Gains: Pre-provision profit (PPPT) surged 18% to $15.8B, with efficiency ratio dropping 230 bps to 56.3%.
  • Business Segment Highlights: Canadian P&C achieved 8% PPPT growth; U.S. Banking improved ROE by 170 bps to 8.1%; Capital Markets saw 32% PPPT growth.
  • 2026 Outlook & Strategic Goals: Targets 15% ROE over 3–5 years, plans mid-single-digit core expense growth, and anticipates mid-single-digit U.S. loan growth by year-end.

Segment Performance

In business highlights, Canadian P&C delivered record revenue and strong PPPT growth of 8%. U.S. Banking saw ROE improvement of 170 basis points to 8.1% and PPPT growth of 7%. Wealth Management had a strong year with record revenues and net income driven by growth in client assets. Capital Markets had strong PPPT performance, up 32%. The bank's diversified business model and strong performance across segments contributed to its overall success.

Outlook and Guidance

For 2026, the bank expects core expense growth in the mid-single-digit range and plans to continue buying back shares while supporting business growth opportunities. The bank will host an All Bank Investor Day on March 26 to share more details on strategy and progress. Economic growth is expected to be modest, with GDP growth of 1.8% in the U.S. and 1.4% in Canada. The bank is well-positioned to benefit from a renewed CapEx cycle.

Valuation and Dividend Yield

With a P/TBV ratio of 1.48, investors are pricing in a certain level of growth and profitability for BMO. The bank's dividend yield of 3.61% is attractive, especially given the recent 5% dividend increase to $1.67 per share. The bank's strong capital position, with a CET1 ratio of 13.3%, provides flexibility to support business growth and return capital to shareholders.

Growth Prospects

Analysts estimate revenue growth of 4.8% for next year, driven by the bank's diversified business model and strong performance across segments. The bank's U.S. business is seeing signs of optimism, with clients expressing cautious positivity and pipelines growing. The bank expects loan growth to pick up in 2026, driven by its strengthened commercial relationships and investments in technology.

BMO's A-Score