6-K
BANK OF MONTREAL /CAN/ (BMO)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
| For the month of: August, 2025 | Commission File Number: <br>001-13354 |
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BANK OF MONTREAL
(Name of Registrant)
| 100 King Street West | 129 rue Saint-Jacques |
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| 1 First Canadian Place | Montreal, Quebec |
| Toronto, Ontario | Canada, H2Y 1L6 |
| Canada, M5X 1A1 | |
| (Executive Offices) | (Head Office) |
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Form 20-F ☐ Form 40-F
☒
INCORPORATION BY REFERENCE
The information contained in this Form 6-K and any exhibits hereto shall be deemed filed with the Securities and Exchange Commission (“SEC”) solely for purposes of incorporation by reference into and as part of the following registration statements of the registrant on file with and declared effective by the SEC:
| 1. | Registration Statement – Form <br>F-3<br> – File <br>No. 333-214934 |
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| 2. | Registration Statement – Form <br>F-3<br> – File <br>No. 333-285508 |
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| 3. | Registration Statement – Form <br>S-8<br> – File <br>No. 333-191591 |
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| 4. | Registration Statement – Form <br>S-8<br> – File <br>No. 333-180968 |
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| 5. | Registration Statement – Form <br>S-8<br> – File <br>No. 333-177579 |
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| 6. | Registration Statement – Form <br>S-8<br> – File <br>No. 333-177568 |
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| 7. | Registration Statement – Form <br>S-8<br> – File <br>No. 333-176479 |
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| 8. | Registration Statement – Form <br>S-8<br> – File <br>No. 333-175413 |
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| 9. | Registration Statement – Form <br>S-8<br> – File <br>No. 333-175412 |
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| 10. | Registration Statement – Form <br>S-8<br> – File <br>No. 333-113096 |
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| 11. | Registration Statement – Form <br>S-8<br> – File <br>No. 333-14260 |
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| 12. | Registration Statement – Form <br>S-8<br> – File <br>No. 33-92112 |
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| 13. | Registration Statement – Form <br>S-8<br> – File <br>No. 333-207739 |
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| 14. | Registration Statement – Form <br>S-8<br> – File <br>No. 333-237522 |
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| 15. | Registration Statement – Form <br>S-8<br> – File <br>No. 333-276007 |
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EXHIBIT INDEX
| Exhibit | Description of Exhibit |
|---|---|
| 99.1 | Third Quarter 2025 Management’s Discussion and Analysis of Results of Operations and Financial Condition |
| 99.2 | Third Quarter 2025 Consolidated Financial Statements |
| 99.3 | Third Quarter 2025 Consolidated Capitalization of Bank of Montreal |
| 101. | Interactive Data File (formatted as Inline XBRL) |
| 104. | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| BANK OF MONTREAL | ||
|---|---|---|
| By: | /s/ Tayfun Tuzun | |
| Name: | Tayfun Tuzun | |
| Title: | Chief Financial Officer | |
| Date<br>: August 26, 2025 | By: | /s/ Pascale Elharrar |
| Name: | Pascale Elharrar | |
| Title: | Corporate Secretary |
EX-99.1
BMO Financial Group Reports Third Quarter 2025 Results
REPORT TO SHAREHOLDERS
BMO’s Third Quarter 2025 Report to Shareholders, including the unaudited interim consolidated financial statements for the period ended July 31, 2025, is available online at www.bmo.com/investorrelations, on the Canadian Securities Administrators’ website at www.sedarplus.ca, and on the EDGAR section of the U.S. Securities and Exchange Commission’s website at www.sec.gov.
Financial Results Highlights
Third Quarter 2025 compared with Third Quarter 2024:
| • | Reported net income^1^ of<br>$2,330 million, an increase of 25% from $1,865 million; adjusted net income^1^ of $2,399 million, an increase of 21% from $1,981 million |
|---|---|
| • | Reported earnings per share (EPS)^2^ of<br>$3.14, an increase of 26% from $2.48; adjusted EPS^1, 2^ of $3.23, an increase of 22% from $2.64 |
| --- | --- |
| • | Provision for credit losses (PCL) of $797 million, compared with $906 million |
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| • | Reported return on equity (ROE) of 11.6%, compared with 10.0%; adjusted ROE^1^ of 12.0%, compared with 10.6% |
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| • | Common Equity Tier 1 (CET1) Ratio^3^<br>of 13.5%, compared with 13.0% |
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Year-to-Date 2025 compared with Year-to-Date 2024:
| • | Reported net income^1^ of<br>$6,430 million, an increase of 28% from $5,023 million; adjusted net income^1^ of $6,734 million, an increase of 14% from $5,907 million |
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| • | Reported EPS^2^ of $8.47, an increase<br>of 29% from $6.57; adjusted EPS^1, 2^of $8.89, an increase of 14% from $7.78 |
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| • | PCL of $2,862 million, compared with $2,238 million |
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| • | Reported ROE of 10.5%, compared with 9.0%; adjusted ROE^1^of 11.1%, compared with 10.7% |
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Toronto, August 26, 2025 – BMO Financial Group (TSX:BMO) (NYSE:BMO) today announced financial results for the third quarter ended July 31, 2025. Reported net income was $2,330 million and reported EPS was $3.14, an increase from $1,865 million and $2.48 in the prior year. Adjusted net income was $2,399 million and adjusted EPS was $3.23, an increase from $1,981 million and $2.64 in the prior year.
“BMO delivered another quarter of strong earnings growth, with solid revenue performance and good expense management. Disciplined execution against each of our ROE rebuild strategies is driving tangible results through consistent positive operating leverage, improving credit performance and strengthening profitability, especially across our U.S. businesses,” said Darryl White, Chief Executive Officer, BMO Financial Group.
“We continue to invest to drive sustainable growth across our businesses, including our recently announced acquisition of Burgundy Asset Management Ltd., adding talent and advancing digital and AI capabilities to deliver a differentiated client experience. We’re leveraging our strong balance sheet to support client growth, while returning excess capital to our shareholders,” concluded Mr. White.
Concurrent with the release of results, BMO announced a fourth quarter 2025 dividend of $1.63 per common share, unchanged from the prior quarter and an increase of $0.08 or 5% from the prior year. The quarterly dividend of $1.63 per common share is equivalent to an annual dividend of $6.52 per common share.
On August 26, 2025, we announced our intention to terminate our existing normal course issuer bid (NCIB) to purchase for cancellation up to 20 million common shares, and establish a new NCIB to purchase for cancellation up to 30 million common shares, subject to the approval of the Office of the Superintendent of Financial Institutions Canada (OSFI) and the Toronto Stock Exchange. As of August 22, 2025, the bank had repurchased 15.7 million shares. The existing NCIB will be terminated prior to commencing purchases under the new NCIB. Once approvals are obtained, the timing and amount of purchases under the new NCIB will be at management’s discretion, based on factors such as market conditions and capital levels.
On June 19, 2025, we announced the signing of a definitive agreement to acquire Burgundy Asset Management Ltd., a leading independent wealth manager in Canada. This acquisition will expand BMO’s wealth management and financial planning capabilities focused on high-net-worth and ultra-high-net-worth individuals, families, and institutions. The transaction is expected to close by the end of calendar 2025, subject to customary closing conditions, including regulatory approvals.
Caution
The foregoing section contains forward-looking statements. Please refer to the Caution Regarding Forward-Looking Statements section.
| (1) | Results and measures in this document are presented on a generally accepted accounting principles (GAAP) basis. They are<br>also presented on an adjusted basis that excludes the impact of certain specified items from reported results. Adjusted results and ratios are non-GAAP and are detailed in the<br>Non-GAAP and Other Financial Measures section. Unless otherwise indicated, all amounts are in Canadian dollars. All ratios and percentage changes in this document are based on unrounded numbers.<br> |
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| (2) | All EPS measures in this document refer to diluted EPS, unless specified otherwise. |
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| (3) | The CET1 Ratio is disclosed in accordance with the Capital Adequacy Requirements (CAR) Guideline, as set out by the Office<br>of the Superintendent of Financial Institutions (OSFI), as applicable. |
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| BMO Financial Group Third Quarter Report 2025 1 | |
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Enhanced Disclosure Task Force
Disclosures related to recommendations from the Financial Stability Board’s Enhanced Disclosure Task Force (EDTF) to provide high-quality, transparent risk disclosures are detailed in the index below, as presented in BMO’s 2024 Annual Report, the Third Quarter 2025 Report to Shareholders (RTS), Supplemental Financial Information (SFI) or Supplemental Regulatory Capital Information (SRCI). Information on BMO’s website, including information within the SFI or SRCI, is not and should not be considered incorporated by reference into our Third Quarter 2025 Report to Shareholders.
| Topic | EDTF Disclosure | Page Number | |||
|---|---|---|---|---|---|
| 2024 Annual<br><br><br>Report | Q3 2025 | ||||
| RTS | SFI | SRCI | |||
| General | 1. Risk-related information in each report, including an index for easy navigation | 68-109 | 4 | Index | Index |
| 2. Risk<br>terminology, measures and key parameters | 72-109,<br>117-119 | 35 | - | - | |
| 3. Top and<br>emerging risks | 68-70 | 6,35 | - | - | |
| 4. Plans to<br>meet new key regulatory ratios once applicable rules are finalized | 62 | 19 | - | - | |
| Risk Governance, Risk Management and Business Model | 5. Risk<br>management and governance framework, processes and key functions | 72-76 | - | - | - |
| 6. Risk<br>culture, risk appetite and procedures to support the culture | 76 | - | - | - | |
| 7. Risks<br>that arise from business models and activities | 74-75 | - | - | - | |
| 8. Stress<br>testing within the risk governance and capital frameworks | 76 | - | - | - | |
| Capital Adequacy and Risk-Weighted Assets (RWA) | 9. Pillar 1<br>capital requirements | 60-63 | - | - | 5-6,15 |
| 10. Composition of<br>capital components and reconciliation of the accounting balance sheet to<br>the regulatory balance sheet. A main features template can be found at<br>https://www.bmo.com/main/about-bmo/investor-relations/regulatory-disclosure | 63-64 | 19-20 | - | 5-7,17-18 | |
| 11. Flow statement<br>of movements in regulatory capital, including changes in Common Equity Tier 1 Capital, Additional Tier 1 Capital and Tier 2 Capital | - | - | - | 8 | |
| 12. Capital<br>management and strategic planning | 59,65-66 | - | - | - | |
| 13. Risk-weighted<br>assets (RWA) by operating group | 64 | - | - | 16 | |
| 14. Analysis of<br>capital requirements for each method used in calculating RWA | 63-64,77-80 | - | - | 16,22-49,<br>55-67,70-71,<br> <br>78-81,84-89 | |
| 15. Tabulate credit<br>risk in the banking book for Basel asset classes and major portfolios | - | - | - | 22-49,<br><br><br>51-67,87-89 | |
| 16. Flow statement<br>that reconciles movements in RWA by risk type | - | - | - | 50,71,83 | |
| 17. Basel<br>validation and back-testing process, including estimated and actual loss parameter information | 103-104 | - | - | 90 | |
| Liquidity | 18. Management of<br>liquidity needs, and liquidity reserve held to meet those needs | 91-97 | 39,42 | - | - |
| Funding | 19. Encumbered and<br>unencumbered assets disclosed by balance sheet category | 93 | 40 | 45 | - |
| 20. Consolidated<br>total assets, liabilities and off-balance sheet commitments by remaining contractual maturity | 98-99 | 44-45 | - | - | |
| 21. Analysis of<br>funding sources and funding strategy | 94-95 | 40-41 | - | - | |
| Market Risk | 22. Linkage of<br>trading and non-trading market risk to the Consolidated Balance Sheet | 89 | 37 | - | - |
| 23. Significant<br>trading and non-trading market risk factors | 85-89 | 37-38 | - | - | |
| 24. Market risk<br>model assumptions, validation procedures and back-testing | 85-89,104 | - | - | - | |
| 25. Primary<br>techniques for risk measurement and risk assessment, including risk of loss | 85-89 | 37-38 | - | - | |
| Credit Risk | 26. Analysis of<br>credit risk profile, exposure and concentration | 77-84,<br>148-155 | 15-16,<br> <br>54-59 | 25-42 | 16-81 |
| 27. Policies to<br>identify impaired loans and renegotiated loans | 148-150,155 | - | - | - | |
| 28. Reconciliation<br>of opening and closing balances of impaired loans and allowance for credit losses | 83,151 | 16,54-56 | - | - | |
| 29. Counterparty<br>credit risk arising from derivative transactions | 77-78,84,<br>167-168 | - | - | 55-73 | |
| 30. Credit risk<br>mitigation | 77-78,150,<br>159,200-201 | - | - | 21,51-52,68 | |
| Other Risks | 31. Discussion of<br>other risks | 72-74,<br>100-109 | - | - | - |
| 32. Publicly known<br>risk events involving material or potentially material loss events | 100-109 | - | - | - | |
| 2 BMO Financial Group Third Quarter Report 2025 | |||||
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Management’s Discussion and Analysis
Management’s Discussion and Analysis (MD&A) commentary is as at August 25, 2025 for the period ended July 31, 2025. The material that precedes this section comprises part of this MD&A. The MD&A should be read in conjunction with the unaudited interim consolidated financial statements for the period ended July 31, 2025, included in this document, as well as the audited annual consolidated financial statements for the year ended October 31, 2024, and the 2024 annual MD&A, contained in Bank of Montreal’s 2024 Annual Report.
The 2024 annual MD&A includes a comprehensive discussion of our businesses, strategies and objectives, and can be accessed on our website, together with other disclosure materials, including interim filings, Annual Information Form and Notice of Annual Meeting of Shareholders and Proxy Circular at www.bmo.com/investorrelations. Readers are also encouraged to visit the site to view other quarterly financial information.
Bank of Montreal uses a unified branding approach that links all of the organization’s member companies. Bank of Montreal, together with its subsidiaries, is known as BMO Financial Group. In this document, the names BMO and BMO Financial Group, as well as the words “bank”, “we” and “our”, mean Bank of Montreal, together with its subsidiaries.
Table of Contents
| 4 | Caution Regarding Forward-Looking Statements | |
|---|---|---|
| 5 | Economic Developments and Outlook | |
| 6 | Financial Highlights | |
| 7 | Non-GAAP and Other Financial Measures | |
| 12 | Foreign Exchange | |
| 12 | Net Income | |
| 13 | Revenue | |
| 14 | Total Provision for Credit Losses | |
| 15 | Impaired Loans | |
| 16 | Non-Interest Expense | |
| 16 | Provision for Income Taxes | |
| 17 | Balance Sheet | |
| 18 | Capital Management | |
| 21 | Review of Operating Groups’ Performance | |
| 21 | Personal and Commercial Banking (P&C) | |
| 22 | Canadian Personal and Commercial Banking (Canadian P&C) | |
| 24 | U.S. Personal and Commercial Banking (U.S. P&C) | |
| 26 | BMO Wealth Management | |
| 28 | BMO Capital Markets | |
| 30 | Corporate Services | |
| 31 | Summary Quarterly Earnings Trends | |
| 32 | Transactions with Related Parties | |
| 32 | Off-Balance Sheet Arrangements | |
| --- | --- | --- |
| 32 | Accounting Policies and Critical Accounting Estimates and Judgments | |
| 32 | Allowance for Credit Losses | |
| 33 | Disclosure for Global Systemically Important Banks (G-SIB) | |
| 33 | Future Changes in Accounting Policies | |
| 33 | Other Regulatory Developments | |
| 34 | Risk Management | |
| 34 | Top and Emerging Risks That May Affect Future Results | |
| 34 | Real Estate Secured Lending | |
| 35 | International Exposures | |
| 36 | Market Risk | |
| 37 | Insurance Market Risk | |
| 38 | Liquidity and Funding Risk | |
| 40 | Credit Ratings | |
| 45 | Glossary of Financial Terms | |
| 47 | Interim Consolidated Financial Statements | |
| 47 | Consolidated Statement of Income | |
| 48 | Consolidated Statement of Comprehensive Income | |
| 49 | Consolidated Balance Sheet | |
| 50 | Consolidated Statement of Changes in Equity | |
| 51 | Consolidated Statement of Cash Flows | |
| 52 | Notes to Interim Consolidated Financial Statements | |
| 72 | Investor and Media Information |
Bank of Montreal’s management, under the supervision of the Chief Executive Officer and the Chief Financial Officer, has evaluated the effectiveness, as at July 31, 2025, of Bank of Montreal’s disclosure controls and procedures (as defined in the rules of the U.S. Securities and Exchange Commission and the Canadian Securities Administrators) and has concluded that such disclosure controls and procedures are effective.
There were no changes in our internal control over financial reporting during the quarter ended July 31, 2025, which materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Because of inherent limitations, disclosure controls and procedures and internal control over financial reporting can provide only reasonable assurance and may not prevent or detect misstatements.
As in prior quarters, Bank of Montreal’s Audit and Conduct Review Committee reviewed this document and Bank of Montreal’s Board of Directors approved the document prior to its release.
| BMO Financial Group Third Quarter Report 2025 3 |
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Caution Regarding Forward-Looking Statements
Bank of Montreal’s public communications often include written or oral forward-looking statements. Statements of this type are included in this document and may be included in other filings with Canadian securities regulators or the U.S. Securities and Exchange Commission, or in other communications. All such statements are made pursuant to the “safe harbor” provisions of, and are intended to be forward-looking statements under, the United States Private Securities Litigation Reform Act of 1995 and any applicable Canadian securities legislation. Forward-looking statements in this document may include, but are not limited to: statements with respect to our objectives and priorities for fiscal 2025 and beyond; our strategies or future actions; our targets and commitments (including with respect to net zero emissions); expectations for our financial condition, capital position, the regulatory environment in which we operate, the results of, or outlook for, our operations or the Canadian, U.S. and international economies; and include statements made by our management. Forward-looking statements are typically identified by words such as “will”, “would”, “should”, “believe”, “expect”, “anticipate”, “project”, “intend”, “estimate”, “plan”, “goal”, “commit”, “target”, “may”, “might”, “schedule”, “forecast”, “outlook”, “timeline”, “suggest”, “seek” and “could” or negative or grammatical variations thereof.
By their nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties, both general and specific in nature. There is significant risk that predictions, forecasts, conclusions or projections will not prove to be accurate, that our assumptions may not be correct, and that actual results may differ materially from such predictions, forecasts, conclusions or projections. We caution readers of this document not to place undue reliance on our forward-looking statements, as a number of factors – many of which are beyond our control and the effects of which can be difficult to predict – could cause actual future results, conditions, actions or events to differ materially from the targets, expectations, estimates or intentions expressed in the forward-looking statements.
The future outcomes that relate to forward-looking statements may be influenced by many factors, including, but not limited to: general economic and market conditions in the countries in which we operate, including labour challenges and changes in foreign exchange and interest rates; political conditions, including changes relating to, or affecting, economic or trade matters, including tariffs, countermeasures and tariff mitigation policies; changes to our credit ratings; cyber and information security, including the threat of data breaches, hacking, identity theft and corporate espionage, as well as the possibility of denial of service resulting from efforts targeted at causing system failure and service disruption; technology resilience, innovation and competition; failure of third parties to comply with their obligations to us; disruptions of global supply chains; environmental and social risk, including climate change; the Canadian housing market and consumer leverage; inflationary pressures; changes in laws, including tax legislation and interpretation, or in supervisory expectations or requirements, including capital, interest rate and liquidity requirements and guidance, including if the bank were designated a global systemically important bank, and the effect of such changes on funding costs and capital requirements; changes in monetary, fiscal or economic policy; weak, volatile or illiquid capital or credit markets; the level of competition in the geographic and business areas in which we operate; exposure to, and the resolution of, significant litigation or regulatory matters, our ability to successfully appeal adverse outcomes of such matters and the timing, determination and recovery of amounts related to such matters; the accuracy and completeness of the information we obtain with respect to our customers and counterparties; our ability to successfully execute our strategic plans, complete acquisitions or dispositions and integrate acquisitions, including obtaining regulatory approvals, and realize any anticipated benefits from such plans and transactions; critical accounting estimates and judgments, and the effects of changes in accounting standards, rules and interpretations on these estimates; operational and infrastructure risks, including with respect to reliance on third parties; global capital markets activities; the emergence or continuation of widespread health emergencies or pandemics, and their impact on local, national or international economies, as well as their heightening of certain risks that may affect our future results; the possible effects on our business of war or terrorist activities; natural disasters, such as earthquakes or flooding, and disruptions to public infrastructure, such as transportation, communications, power or water supply; and our ability to anticipate and effectively manage risks arising from all of the foregoing factors.
We caution that the foregoing list is not exhaustive of all possible factors. Other factors and risks could adversely affect our results. For more information, please refer to the discussion in the Risks That May Affect Future Results section, and the sections related to credit and counterparty, market, insurance, liquidity and funding, operational non-financial, legal and regulatory, strategic, environmental and social, and reputation risk, in the Enterprise-Wide Risk Management section of BMO’s 2024 Annual Report, and the Risk Management section in our Third Quarter 2025 Report to Shareholders, all of which outline certain key factors and risks that may affect our future results. Investors and others should carefully consider these factors and risks, as well as other uncertainties and potential events, and the inherent uncertainty of forward-looking statements. We do not undertake to update any forward-looking statements, whether written or oral, that may be made from time to time by the organization or on its behalf, except as required by law. The forward-looking information contained in this document is presented for the purpose of assisting shareholders and analysts in understanding our financial position as at and for the periods ended on the dates presented, as well as our strategic priorities and objectives, and may not be appropriate for other purposes.
Material economic assumptions underlying the forward-looking statements contained in this document include those set out in the Economic Developments and Outlook section of BMO’s 2024 Annual Report, as updated in the Economic Developments and Outlook section in our Third Quarter 2025 Report to Shareholders, as well as in the Allowance for Credit Losses section of BMO’s 2024 Annual Report, as updated in the Allowance for Credit Losses section in our Third Quarter 2025 Report to Shareholders. Assumptions about the performance of the Canadian and U.S. economies, as well as overall market conditions and their combined effect on our business, are material factors we consider when determining our strategic priorities, objectives and expectations for our business. In determining our expectations for economic growth, we primarily consider historical economic data, past relationships between economic and financial variables, changes in government policies, and the risks to the domestic and global economy.
| 4 BMO Financial Group Third Quarter Report 2025 |
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Economic Developments and Outlook ^(1)^
The ongoing changes in U.S. trade policies have created a heightened sense of economic uncertainty that is impacting both Canada and the United States. The full impact of the uncertainty on economic growth in both countries will depend on the level and duration of tariffs and the outcome of future trade negotiations. Global trade uncertainties and reciprocal tariffs will likely cause the global economy to weaken in 2025. However, recent U.S. trade agreements with several regions, including the European Union, the United Kingdom and Japan, mark some progress toward stabilization in the economic environment.
Canada’s real GDP is expected to contract modestly in the second quarter of 2025, due to weakness in exports and business investment arising from U.S. tariffs. Along with continued softness in the housing market, economic growth is projected to struggle in the third quarter of 2025. However, consumer spending remains somewhat resilient amid lower interest rates and, together with expansionary fiscal policies, should support stronger economic growth later in the year and through 2026. Annual real GDP is anticipated to grow 1.3% in 2025 and 1.4% in 2026, compared with 1.6% in 2024. The unemployment rate has risen year-over-year from 6.4% to 6.9% in July 2025, largely due to rapid labour force growth. While immigration curbs are now slowing growth in the labour force, the unemployment rate is projected to increase to 7.3% by the end of 2025 due to weakness in the economy, before turning lower in 2026 as economic growth is expected to improve. Consumer price index inflation remains low at 1.7% year-over-year in July 2025, partially due to the elimination of the consumer carbon tax. Retaliatory tariffs applied to some U.S. imports will temporarily lift inflation, but the annual rate is anticipated to remain around 2.0% in both 2025 and 2026. The Bank of Canada held interest rates steady in July 2025 for the third consecutive meeting, maintaining a cautious stance due to tariff-related uncertainty. However, we anticipate the central bank will resume easing policy in the fall to address a weaker labour market, and will ultimately reduce the policy rate by 75 basis points before March 2026. Industry-wide growth in residential mortgage balances of 4.7% year-over-year in June 2025 is expected to moderate as the economy weakens in the near term, before improving in 2026 as housing market activity responds to a firmer economy and lower borrowing costs. Year-over-year growth in consumer credit (excluding mortgages) remained moderate at 3.8% in June 2025, and is anticipated to decelerate somewhat as unemployment rises. Industry-wide growth in non-financial corporate credit balances remained moderate at 3.9% year-over-year in June 2025, but will likely slow this year due to trade protectionism.
After contracting slightly in the first quarter of 2025, U.S. real GDP rebounded 3.0% annualized in the second quarter, largely due to a sharp decline in imports following earlier actions by businesses to avoid tariffs. Consumer and business spending rose moderately, while residential construction declined. Economic growth is anticipated to moderate in the second half of 2025, due to the adverse effects of tariffs, deportations and cutbacks in the federal government, and is expected to strengthen in 2026, supported by reductions in business and personal taxes, as well as easing monetary policy. Annual GDP growth is projected to average 1.7% in 2025 and 1.6% in 2026, compared with 2.8% in 2024. A moderation in job growth has lifted the unemployment rate to 4.2% in July 2025 from a cycle-low of 3.4% in April 2023, and the rate is expected to rise to 4.6% by the end of 2025. Consumer price index inflation rose to 2.7% year-over-year in July 2025 from a recent low of 2.3% in April 2025, partially due to the impact of tariffs. Annual inflation is projected to move above 3% later this year, before moderating in response to a higher unemployment rate. The Federal Reserve has held policy rates steady this year, due to the uncertain effect of tariffs on economic growth and inflation. However, the central bank is anticipated to reduce rates by 150 basis points between September 2025 and December 2026 to restore policy neutrality. Growth in residential mortgage balances was modest at 1.3% year-over-year in July 2025 amid continued weakness in home sales, but will likely strengthen in 2026 as mortgage rates decline. Year-over-year growth in consumer loan balances was moderate at 2.6% in July 2025 and is projected to firm in 2026. Year-over-year growth in business, industrial and commercial real estate credit was modest at 2.3% in July 2025, due to still-elevated borrowing costs and uncertain trade policies, though it is expected to strengthen as economic growth improves in 2026.
The above economic outlook is subject to several risks that could lead to a less favourable outcome for the North American economy. The most immediate threat is from a possible escalation of U.S. tariffs. Canadian businesses face longer-term risks in the event of an unsuccessful renegotiation of the United States-Mexico-Canada Agreement (USMCA), as tariffs could then apply to all goods exported to the U.S., rather than just a small share. Other risks stem from the continued conflicts in Ukraine and the Middle East.
Our operations, clients, and customers may be affected by significant changes to the economic environment and increased economic uncertainty. An increase in provisions for credit losses, volatility in capital markets and slower loan growth could result if tariffs are high and persistent. Management regularly monitors the economic environment to take proactive actions to respond to uncertainties and reduce the impact on our results.
Caution
This Economic Developments and Outlook section contains forward-looking statements. Please refer to the Caution Regarding Forward-Looking Statements.
| (1) | All periods in this section refer to the calendar quarter and calendar year, rather than the fiscal quarter or fiscal<br>year. |
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| BMO Financial Group Third Quarter Report 2025 5 | |
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Financial Highlights
| TABLE 1 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| (Canadian in millions, except as noted) | Q2-2025 | Q3-2024 | YTD-2025 | YTD-2024 | |||||
| Summary Income Statement (1) | |||||||||
| Net interest income | 5,496 | 5,097 | 4,794 | **** | 15,991 | 14,030 | |||
| Non-interest revenue | 3,492 | 3,582 | 3,398 | **** | 10,942 | 9,808 | |||
| Revenue | 8,988 | 8,679 | 8,192 | **** | 26,933 | 23,838 | |||
| Provision for credit losses on impaired loans | 773 | 765 | 828 | **** | 2,397 | 1,959 | |||
| Provision for credit losses on performing loans | 24 | 289 | 78 | **** | 465 | 279 | |||
| Total provision for credit losses (PCL) | 797 | 1,054 | 906 | **** | 2,862 | 2,238 | |||
| Non-interest expense | 5,105 | 5,019 | 4,839 | **** | 15,551 | 15,072 | |||
| Provision for income taxes | 756 | 644 | 582 | **** | 2,090 | 1,505 | |||
| Net income | 2,330 | 1,962 | 1,865 | **** | 6,430 | 5,023 | |||
| Net income attributable to non-controlling interest in<br>subsidiaries | 3 | 2 | - | **** | 9 | 6 | |||
| Dividends on preferred shares and distributions on other equity<br>instruments | 66 | 142 | 51 | **** | 273 | 234 | |||
| Net income available to common shareholders | 2,261 | 1,818 | 1,814 | **** | 6,148 | 4,783 | |||
| Adjusted net income | 2,399 | 2,046 | 1,981 | **** | 6,734 | 5,907 | |||
| Adjusted net income available to common shareholders | 2,330 | 1,902 | 1,930 | **** | 6,452 | 5,667 | |||
| Common Share Data (, except as noted) (1) | |||||||||
| Basic earnings per share | 3.14 | 2.51 | 2.49 | **** | 8.48 | 6.58 | |||
| Diluted earnings per share | 3.14 | 2.50 | 2.48 | **** | 8.47 | 6.57 | |||
| Adjusted diluted earnings per share | 3.23 | 2.62 | 2.64 | **** | 8.89 | 7.78 | |||
| Book value per share | 108.29 | 108.03 | 102.05 | **** | 108.29 | 102.05 | |||
| Closing share price | 152.94 | 132.09 | 116.45 | **** | 152.94 | 116.45 | |||
| Number of common shares outstanding (in millions) | |||||||||
| End of period | 716.3 | 722.1 | 729.4 | **** | 716.3 | 729.4 | |||
| Average basic | 719.5 | 725.4 | 729.4 | **** | 724.8 | 727.2 | |||
| Average diluted | 720.8 | 726.4 | 730.2 | **** | 726.0 | 728.0 | |||
| Market capitalization ( billions) | 109.6 | 95.4 | 84.9 | **** | 109.6 | 84.9 | |||
| Dividends declared per share | 1.63 | 1.59 | 1.55 | **** | 4.81 | 4.57 | |||
| Dividend yield (%) | 4.3 | 4.8 | 5.3 | **** | 4.2 | 5.2 | |||
| Dividend payout ratio (%) | 51.9 | 63.4 | 62.4 | **** | 56.7 | 69.5 | |||
| Adjusted dividend payout ratio (%) | 50.3 | 60.6 | 58.6 | **** | 54.0 | 58.6 | |||
| Financial Measures and Ratios (%) (1) (2) | |||||||||
| Return on equity (ROE) | 11.6 | 9.4 | 10.0 | **** | 10.5 | 9.0 | |||
| Adjusted return on equity | 12.0 | 9.8 | 10.6 | **** | 11.1 | 10.7 | |||
| Return on tangible common equity (ROTCE) | 15.6 | 12.8 | 13.9 | **** | 14.3 | 12.7 | |||
| Adjusted return on tangible common equity | 15.6 | 12.8 | 14.2 | **** | 14.5 | 14.4 | |||
| Efficiency ratio | 56.8 | 57.8 | 59.1 | **** | 57.7 | 63.2 | |||
| Adjusted efficiency ratio | 55.8 | 56.5 | 57.3 | **** | 56.2 | 58.7 | |||
| Operating leverage | 4.2 | 5.2 | 14.8 | **** | 9.8 | 16.3 | |||
| Adjusted operating leverage | 2.9 | 2.7 | 5.2 | **** | 4.7 | 1.3 | |||
| Net interest margin on average earning assets | 1.69 | 1.60 | 1.52 | **** | 1.64 | 1.53 | |||
| Adjusted net interest margin, excluding trading net interest income, and trading and insurance<br>assets | 1.99 | 1.97 | 1.83 | **** | 1.96 | 1.83 | |||
| Effective tax rate | 24.52 | 24.70 | 23.80 | **** | 24.53 | 23.06 | |||
| Adjusted effective tax rate | 24.54 | 24.73 | 23.89 | **** | 24.59 | 23.21 | |||
| Total PCL-to-average net<br>loans and acceptances | 0.47 | 0.63 | 0.54 | **** | 0.56 | 0.46 | |||
| PCL on impaired loans-to-average net loans and acceptances | 0.45 | 0.46 | 0.50 | **** | 0.47 | 0.40 | |||
| Balance Sheet and Other Information (as at, millions, except as noted) | |||||||||
| Assets | 1,431,553 | 1,440,269 | 1,400,470 | **** | 1,431,553 | 1,400,470 | |||
| Average earning assets | 1,287,815 | 1,308,774 | 1,258,977 | **** | 1,305,339 | 1,223,370 | |||
| Gross loans and acceptances | 682,750 | 681,102 | 677,995 | **** | 682,750 | 677,995 | |||
| Net loans and acceptances | 677,585 | 676,142 | 673,719 | **** | 677,585 | 673,719 | |||
| Deposits | 955,363 | 958,267 | 965,239 | **** | 955,363 | 965,239 | |||
| Common shareholders’ equity | 77,567 | 78,008 | 74,439 | **** | 77,567 | 74,439 | |||
| Total risk weighted assets (3) | 430,134 | 425,066 | 428,860 | **** | 430,134 | 428,860 | |||
| Assets under administration | 810,244 | 799,054 | 750,527 | **** | 810,244 | 750,527 | |||
| Assets under management | 464,182 | 437,911 | 409,627 | **** | 464,182 | 409,627 | |||
| Capital and Liquidity Measures (%) (3) | |||||||||
| Common Equity Tier 1 Ratio | 13.5 | 13.5 | 13.0 | **** | 13.5 | 13.0 | |||
| Tier 1 Capital Ratio | 15.5 | 15.3 | 14.8 | **** | 15.5 | 14.8 | |||
| Total Capital Ratio | 17.8 | 17.9 | 17.1 | **** | 17.8 | 17.1 | |||
| Leverage Ratio | 4.5 | 4.4 | 4.3 | **** | 4.5 | 4.3 | |||
| TLAC Ratio | 29.5 | 29.9 | 28.5 | **** | 29.5 | 28.5 | |||
| Liquidity Coverage Ratio (LCR) | 130 | 134 | 129 | **** | 130 | 129 | |||
| Net Stable Funding Ratio (NSFR) | 118 | 117 | 116 | **** | 118 | 116 | |||
| Foreign Exchange Rates () | |||||||||
| As at Canadian/U.S. dollar | 1.3847 | 1.3786 | 1.3795 | **** | 1.3847 | 1.3795 | |||
| Average Canadian/U.S. dollar | 1.3730 | 1.4203 | 1.3705 | **** | 1.4077 | 1.3574 |
All values are in US Dollars.
| (1) | Adjusted results exclude certain items from reported results and are used to calculate our adjusted measures as presented<br>in the table above. Management assesses performance on a reported basis and an adjusted basis, and considers both to be useful. For further information, refer to the Non-GAAP and Other Financial Measures<br>section. |
|---|---|
| (2) | PCL, ROE and ROTCE ratios are presented on an annualized basis. |
| --- | --- |
| (3) | Capital and liquidity measures are disclosed in accordance with the Capital Adequacy Requirements (CAR) Guideline and the<br>Liquidity Adequacy Requirements (LAR) Guideline, as set out by the Office of the Superintendent of Financial Institutions (OSFI), as applicable. |
| --- | --- |
Certain comparative figures have been reclassified to conform with the current period’s presentation.
| 6 BMO Financial Group Third Quarter Report 2025 |
|---|
Non-GAAP and Other Financial Measures
Results and measures in this document are presented on a generally accepted accounting principles (GAAP) basis. Unless otherwise indicated, all amounts are in Canadian dollars and have been derived from our audited annual consolidated financial statements and our unaudited interim consolidated financial statements, prepared in accordance with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board. References to GAAP mean IFRS. We use a number of financial measures to assess our performance, as well as the performance of our operating segments, including amounts, measures and ratios that are presented on a non-GAAP basis, as described below. We believe that these non-GAAP amounts, measures and ratios, read together with our GAAP results, provide readers with a better understanding of how management assesses results.
Non-GAAP amounts, measures and ratios do not have standardized meanings under GAAP. They are unlikely to be comparable to similar measures presented by other companies and should not be viewed in isolation from, or as a substitute for, GAAP results.
For further information regarding the composition of our non-GAAP and other financial measures, including supplementary financial measures, refer to the Glossary of Financial Terms.
Adjusted measures and ratios
Management considers both reported and adjusted results and measures to be useful in assessing underlying ongoing business performance. Adjusted results and measures remove certain specified items from revenue, non-interest expense, provision for credit losses and income taxes, as detailed in the following table. Adjusted results and measures presented in this document are non-GAAP. Presenting results on both a reported basis and an adjusted basis permits readers to assess the impact of certain items on results for the periods presented, and to better assess results excluding those items that may not be reflective of ongoing business performance. As such, the presentation may facilitate readers’ analysis of trends. Except as otherwise noted, management’s discussion of changes in reported results in this document applies equally to changes in the corresponding adjusted results.
Tangible common equity and return on tangible common equity
Tangible common equity is calculated as common shareholders’ equity, less goodwill and acquisition-related intangible assets, net of related deferred tax liabilities. Return on tangible common equity (ROTCE) is calculated as net income available to common shareholders, adjusted for the amortization of acquisition-related intangible assets and any impairments, as a percentage of average tangible common equity. ROTCE is commonly used in the North American banking industry and is meaningful because it measures the performance of businesses consistently, whether they were acquired or developed organically.
Adjusting Items
Adjusted results in the current quarter and prior periods excluded the following items:
| • | Amortization of acquisition-related intangible assets and any impairments of $69 million ($93 million pre-tax) in Q3-2025, recorded in non-interest expense in the related operating group. Prior periods included $81 million<br>($109 million pre-tax) in Q2-2025, $79 million ($106 million pre-tax) in<br>Q1-2025, $79 million ($107 million pre-tax) in Q3-2024 and Q2-2024, and<br>$84 million ($112 million pre-tax) in Q1-2024. |
|---|---|
| • | Acquisition and integration costs of $4 million ($5 million<br>pre-tax) in Q3-2025, recorded in non-interest expense in the related operating group. Costs related to the announced acquisition<br>of Burgundy Asset Management Ltd. were recorded in BMO Wealth Management, Bank of the West in Corporate Services, AIR Miles in Canadian P&C, and Radicle and Clearpool in BMO Capital Markets. Prior periods included a reversal of $1 million<br>($2 million pre-tax) in Q2-2025, and expenses of $7 million ($10 million pre-tax) in Q1-2025, $19 million ($25 million pre-tax) in Q3-2024, $26 million ($36 million<br>pre-tax) in Q2-2024, and $57 million ($76 million pre-tax) in Q1-2024.<br> |
| --- | --- |
| • | Impact of a partial reversal of a U.S. Federal Deposit Insurance Corporation (FDIC) special assessment of<br>$4 million ($5 million pre-tax) in Q3-2025, recorded in non-interest expense in Corporate Services. Prior periods<br>included a $4 million ($5 million pre-tax) expense in Q2-2025, a $5 million ($7 million pre-tax) partial<br>reversal in Q1-2025, a $5 million ($6 million pre-tax) expense in Q3-2024, a $50 million ($67 million pre-tax) expense in Q2-2024 and a $313 million ($417 million pre-tax) expense in<br>Q1-2024. |
| --- | --- |
| • | Impact of aligning accounting policies for employee vacation across legal entities of $70 million<br>($96 million pre-tax) in Q1-2025, recorded in non-interest expense in Corporate Services. |
| --- | --- |
| • | Impact of a lawsuit associated with a predecessor bank, M&I Marshall and Ilsley Bank, recorded in Corporate<br>Services in the prior year. Prior periods included $13 million ($18 million pre-tax) in Q3-2024, comprising interest expense of $14 million and non-interest expense of $4 million, and $12 million ($15 million pre-tax) in Q2-2024 and $11 million<br>($15 million pre-tax) in Q1-2024, both comprising interest expense of $14 million and non-interest expense<br>of $1 million. For further information, refer to the Provisions and Contingent Liabilities section in Note 25 of the audited annual consolidated financial statements of BMO’s 2024 Annual Report. |
| --- | --- |
| • | Net accounting loss of $136 million ($164 million pre-tax) on the<br>sale of a portfolio of recreational vehicle loans related to balance sheet optimization in Q1-2024, recorded in non-interest revenue in Corporate Services.<br> |
| --- | --- |
Adjusting items in aggregate decreased net income by $69 million in the current quarter, compared with a decrease of $116 million in the prior year and a decrease of $84 million in the prior quarter. On a year-to-date basis, adjusting items in aggregate decreased net income by $304 million in the current year, compared with a decrease of $884 million in the prior year.
| BMO Financial Group Third Quarter Report 2025 7 |
|---|
Non-GAAP and Other Financial Measures ^(1)^ ****
| TABLE 2 | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Canadian in millions, except as noted) | Q2-2025 | Q3-2024 | YTD-2025 | YTD-2024 | ||||||||||
| Reported Results | ||||||||||||||
| Net interest income | 5,496 | **** | 5,097 | 4,794 | **** | 15,991 | **** | 14,030 | ||||||
| Non-interest revenue | 3,492 | **** | 3,582 | 3,398 | **** | 10,942 | **** | 9,808 | ||||||
| Revenue | 8,988 | **** | 8,679 | 8,192 | **** | 26,933 | **** | 23,838 | ||||||
| Provision for credit losses | (797 | ) | (1,054 | ) | (906 | ) | **** | (2,862 | ) | (2,238 | ) | |||
| Non-interest expense | (5,105 | ) | (5,019 | ) | (4,839 | ) | **** | (15,551 | ) | (15,072 | ) | |||
| Income before income taxes | 3,086 | **** | 2,606 | 2,447 | **** | 8,520 | **** | 6,528 | ||||||
| Provision for income taxes | (756 | ) | (644 | ) | (582 | ) | **** | (2,090 | ) | (1,505 | ) | |||
| Net income | 2,330 | **** | 1,962 | 1,865 | **** | 6,430 | **** | 5,023 | ||||||
| Dividends on preferred shares and distributions on other equity instruments | 66 | **** | 142 | 51 | **** | 273 | **** | 234 | ||||||
| Net income attributable to<br>non-controlling interest in subsidiaries | 3 | **** | 2 | - | **** | 9 | **** | 6 | ||||||
| Net income available to common shareholders | 2,261 | **** | 1,818 | 1,814 | **** | 6,148 | **** | 4,783 | ||||||
| Diluted EPS () | 3.14 | **** | 2.50 | 2.48 | **** | 8.47 | **** | 6.57 | ||||||
| Adjusting Items Impacting Revenue (Pre-tax) | ||||||||||||||
| Legal provision/reversal (including related interest expense and legal fees) | - | **** | - | (14 | ) | **** | - | **** | (42 | ) | ||||
| Impact of loan portfolio sale | - | **** | - | - | **** | - | **** | (164 | ) | |||||
| Impact of adjusting items on revenue<br>(pre-tax) | - | **** | - | (14 | ) | **** | - | **** | (206 | ) | ||||
| Adjusting Items Impacting Non-Interest Expense (Pre-tax) | ||||||||||||||
| Acquisition and integration costs/reversal | (5 | ) | 2 | (25 | ) | **** | (13 | ) | (137 | ) | ||||
| Amortization of acquisition-related intangible assets | (93 | ) | (109 | ) | (107 | ) | **** | (308 | ) | (326 | ) | |||
| Legal provision/reversal (including related interest expense and legal fees) | - | **** | - | (4 | ) | **** | - | **** | (6 | ) | ||||
| FDIC special assessment | 5 | **** | (5 | ) | (6 | ) | **** | 7 | **** | (490 | ) | |||
| Impact of alignment of accounting policies | - | **** | - | - | **** | (96 | ) | - | ||||||
| Impact of adjusting items on<br>non-interest expense (pre-tax) | (93 | ) | (112 | ) | (142 | ) | **** | (410 | ) | (959 | ) | |||
| Impact of adjusting items on reported net income (pre-tax) | (93 | ) | (112 | ) | (156 | ) | **** | (410 | ) | (1,165 | ) | |||
| Adjusting Items Impacting Revenue (After-tax) | ||||||||||||||
| Legal provision/reversal (including related interest expense and legal fees) | - | **** | - | (11 | ) | **** | - | **** | (32 | ) | ||||
| Impact of loan portfolio sale | - | **** | - | - | **** | - | **** | (136 | ) | |||||
| Impact of adjusting items on revenue<br>(after-tax) | - | **** | - | (11 | ) | **** | - | **** | (168 | ) | ||||
| Adjusting Items Impacting Non-Interest Expense (After-tax) | ||||||||||||||
| Acquisition and integration costs/reversal | (4 | ) | 1 | (19 | ) | **** | (10 | ) | (102 | ) | ||||
| Amortization of acquisition-related intangible assets | (69 | ) | (81 | ) | (79 | ) | **** | (229 | ) | (242 | ) | |||
| Legal provision/reversal (including related interest expense and legal fees) | - | **** | - | (2 | ) | **** | - | **** | (4 | ) | ||||
| FDIC special assessment | 4 | **** | (4 | ) | (5 | ) | **** | 5 | **** | (368 | ) | |||
| Impact of alignment of accounting policies | - | **** | - | - | **** | (70 | ) | - | ||||||
| Impact of adjusting items on<br>non-interest expense (after-tax) | (69 | ) | (84 | ) | (105 | ) | **** | (304 | ) | (716 | ) | |||
| Impact of adjusting items on reported net income (after-tax) | (69 | ) | (84 | ) | (116 | ) | **** | (304 | ) | (884 | ) | |||
| Impact on diluted EPS () | (0.09 | ) | (0.12 | ) | (0.16 | ) | **** | (0.42 | ) | (1.21 | ) | |||
| Adjusted Results | ||||||||||||||
| Net interest income | 5,496 | **** | 5,097 | 4,808 | **** | 15,991 | **** | 14,072 | ||||||
| Non-interest revenue | 3,492 | **** | 3,582 | 3,398 | **** | 10,942 | **** | 9,972 | ||||||
| Revenue | 8,988 | **** | 8,679 | 8,206 | **** | 26,933 | **** | 24,044 | ||||||
| Provision for credit losses | (797 | ) | (1,054 | ) | (906 | ) | **** | (2,862 | ) | (2,238 | ) | |||
| Non-interest expense | (5,012 | ) | (4,907 | ) | (4,697 | ) | **** | (15,141 | ) | (14,113 | ) | |||
| Income before income taxes | 3,179 | **** | 2,718 | 2,603 | **** | 8,930 | **** | 7,693 | ||||||
| Provision for income taxes | (780 | ) | (672 | ) | (622 | ) | **** | (2,196 | ) | (1,786 | ) | |||
| Net income | 2,399 | **** | 2,046 | 1,981 | **** | 6,734 | **** | 5,907 | ||||||
| Net income available to common shareholders | 2,330 | **** | 1,902 | 1,930 | **** | 6,452 | **** | 5,667 | ||||||
| Diluted EPS () | 3.23 | **** | 2.62 | 2.64 | **** | 8.89 | **** | 7.78 |
All values are in US Dollars.
| (1) | Adjusted results exclude certain items from reported results and are used to calculate our adjusted measures as presented<br>in the table above. Refer to the commentary in this Non-GAAP and Other Financial Measures section for further information on adjusting items. |
|---|---|
| 8 BMO Financial Group Third Quarter Report 2025 | |
| --- |
Summary of Reported and Adjusted Results by Operating Segment
| TABLE 3 | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Canadian $ in millions, except as noted) | Canadian P&C | U.S. P&C | Total P&C | BMO WealthManagement | BMO CapitalMarkets | CorporateServices | Total Bank | U.S. Segment (1)(US in millions) | ||||||||||||
| Q3-2025 | ||||||||||||||||||||
| Reported net income (loss) | **** | 867 | **** | 709 | **** | **** | 1,576 | **** | **** | 436 | **** | 438 | **** | (120 | ) | **** | 2,330 | **** | **** | |
| Dividends on preferred shares and distributions on other equity instruments | **** | 12 | **** | 14 | **** | **** | 26 | **** | **** | 2 | **** | 11 | **** | 27 | **** | **** | 66 | **** | **** | |
| Net income attributable to non-controlling interest in<br>subsidiaries | **** | - | **** | 2 | **** | **** | 2 | **** | **** | - | **** | - | **** | 1 | **** | **** | 3 | **** | **** | |
| Net income (loss) available to common shareholders | **** | 855 | **** | 693 | **** | **** | 1,548 | **** | **** | 434 | **** | 427 | **** | (148 | ) | **** | 2,261 | **** | **** | |
| Acquisition and integration costs/reversal (2) | **** | - | **** | - | **** | **** | - | **** | **** | 3 | **** | - | **** | 1 | **** | **** | 4 | **** | **** | |
| Amortization of acquisition-related intangible assets | **** | 3 | **** | 60 | **** | **** | 63 | **** | **** | 2 | **** | 4 | **** | - | **** | **** | 69 | **** | **** | |
| Impact of FDIC special assessment | **** | - | **** | - | **** | **** | - | **** | **** | - | **** | - | **** | (4 | ) | **** | (4 | ) | ) | |
| Adjusted net income (loss) (3) | **** | 870 | **** | 769 | **** | **** | 1,639 | **** | **** | 441 | **** | 442 | **** | (123 | ) | **** | 2,399 | **** | **** | |
| Adjusted net income (loss) available to common shareholders<br>(3) | **** | 858 | **** | 753 | **** | **** | 1,611 | **** | **** | 439 | **** | 431 | **** | (151 | ) | **** | 2,330 | **** | **** | |
| Q2-2025 | ||||||||||||||||||||
| Reported net income (loss) | 782 | 546 | 1,328 | 361 | 431 | (158 | ) | 1,962 | ||||||||||||
| Dividends on preferred shares and distributions on other equity instruments | 11 | 14 | 25 | 3 | 10 | 104 | 142 | |||||||||||||
| Net income (loss) attributable to non-controlling interest in<br>subsidiaries | - | 5 | 5 | - | - | (3 | ) | 2 | ||||||||||||
| Net income (loss) available to common shareholders | 771 | 527 | 1,298 | 358 | 421 | (259 | ) | 1,818 | ||||||||||||
| Acquisition and integration costs (2) | - | - | - | - | - | (1 | ) | (1 | ) | ) | ||||||||||
| Amortization of acquisition-related intangible assets | 4 | 72 | 76 | 2 | 3 | - | 81 | |||||||||||||
| Impact of FDIC special assessment | - | - | - | - | - | 4 | 4 | |||||||||||||
| Adjusted net income (loss) (3) | 786 | 618 | 1,404 | 363 | 434 | (155 | ) | 2,046 | ||||||||||||
| Adjusted net income (loss) available to common shareholders<br>(3) | 775 | 599 | 1,374 | 360 | 424 | (256 | ) | 1,902 | ||||||||||||
| Q3-2024 | ||||||||||||||||||||
| Reported net income (loss) | 914 | 470 | 1,384 | 362 | 389 | (270 | ) | 1,865 | ||||||||||||
| Dividends on preferred shares and distributions on other equity instruments | 10 | 14 | 24 | 3 | 9 | 15 | 51 | |||||||||||||
| Net income (loss) attributable to non-controlling interest in<br>subsidiaries | - | (3 | ) | (3 | ) | - | - | 3 | - | |||||||||||
| Net income (loss) available to common shareholders | 904 | 459 | 1,363 | 359 | 380 | (288 | ) | 1,814 | ||||||||||||
| Acquisition and integration costs (2) | 2 | - | 2 | - | 1 | 16 | 19 | |||||||||||||
| Amortization of acquisition-related intangible assets | 4 | 69 | 73 | 2 | 4 | - | 79 | |||||||||||||
| Legal provision/reversal (including related interest expense and legal fees) | - | - | - | - | - | 13 | 13 | |||||||||||||
| Impact of FDIC special assessment | - | - | - | - | - | 5 | 5 | |||||||||||||
| Adjusted net income (loss) (3) | 920 | 539 | 1,459 | 364 | 394 | (236 | ) | 1,981 | ||||||||||||
| Adjusted net income (loss) available to common shareholders<br>(3) | 910 | 528 | 1,438 | 361 | 385 | (254 | ) | 1,930 | ||||||||||||
| YTD-2025 | ||||||||||||||||||||
| Reported net income (loss) | **** | 2,543 | **** | 1,835 | **** | **** | 4,378 | **** | **** | 1,166 | **** | 1,456 | **** | (570 | ) | **** | 6,430 | **** | **** | |
| Dividends on preferred shares and distributions on other equity instruments | **** | 35 | **** | 43 | **** | **** | 78 | **** | **** | 7 | **** | 31 | **** | 157 | **** | **** | 273 | **** | **** | |
| Net income attributable to non-controlling interest in<br>subsidiaries | **** | - | **** | 7 | **** | **** | 7 | **** | **** | - | **** | - | **** | 2 | **** | **** | 9 | **** | **** | |
| Net income (loss) available to common shareholders | **** | 2,508 | **** | 1,785 | **** | **** | 4,293 | **** | **** | 1,159 | **** | 1,425 | **** | (729 | ) | **** | 6,148 | **** | **** | |
| Acquisition and integration costs (2) | **** | - | **** | - | **** | **** | - | **** | **** | 3 | **** | - | **** | 7 | **** | **** | 10 | **** | **** | |
| Amortization of acquisition-related intangible assets | **** | 10 | **** | 202 | **** | **** | 212 | **** | **** | 6 | **** | 11 | **** | - | **** | **** | 229 | **** | **** | |
| Impact of FDIC special assessment | **** | - | **** | - | **** | **** | - | **** | **** | - | **** | - | **** | (5 | ) | **** | (5 | ) | ) | |
| Impact of alignment of accounting policies | **** | - | **** | - | **** | **** | - | **** | **** | - | **** | - | **** | 70 | **** | **** | 70 | **** | **** | |
| Adjusted net income (loss) (3) | **** | 2,553 | **** | 2,037 | **** | **** | 4,590 | **** | **** | 1,175 | **** | 1,467 | **** | (498 | ) | **** | 6,734 | **** | **** | |
| Adjusted net income (loss) available to common shareholders<br>(3) | **** | 2,518 | **** | 1,987 | **** | **** | 4,505 | **** | **** | 1,168 | **** | 1,436 | **** | (657 | ) | **** | 6,452 | **** | **** |
All values are in US Dollars.
| (1) | U.S. segment comprises reported and adjusted results recorded in U.S. P&C and our U.S. operations in BMO Wealth<br>Management, BMO Capital Markets and Corporate Services. |
|---|---|
| (2) | Acquisition and integration costs are recorded in non-interest expense in the<br>related operating groups. Expenses related to the announced acquisition of Burgundy Asset Management Ltd. were recorded in BMO Wealth Management; expenses related to the acquisition of Bank of the West were recorded in Corporate Services; expenses<br>related to the acquisition of Clearpool and Radicle were recorded in BMO Capital Markets; and expenses related to the acquisition of AIR MILES were recorded in Canadian P&C. |
| --- | --- |
| (3) | Refer to the commentary in this Non-GAAP and Other Financial Measures section for<br>details on adjusting items. |
| --- | --- |
| BMO Financial Group Third Quarter Report 2025 9 | |
| --- |
Summary of Reported and Adjusted Results by Operating Segment (Continued)
| TABLE 3 (Continued) | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Canadian $ in millions, except as noted) | Canadian P&C | U.S. P&C | Total P&C | BMO WealthManagement | BMO CapitalMarkets | CorporateServices | Total Bank | U.S. Segment (1)(US in millions) | ||||||||
| YTD-2024 | ||||||||||||||||
| Reported net income (loss) | 2,707 | 1,573 | 4,280 | 922 | 1,241 | (1,420 | ) | 5,023 | ||||||||
| Dividends on preferred shares and distributions on other equity instruments | 31 | 40 | 71 | 7 | 27 | 129 | 234 | |||||||||
| Net income attributable to non-controlling interest in<br>subsidiaries | - | 1 | 1 | - | - | 5 | 6 | |||||||||
| Net income (loss) available to common shareholders | 2,676 | 1,532 | 4,208 | 915 | 1,214 | (1,554 | ) | 4,783 | ||||||||
| Acquisition and integration costs (2) | 5 | - | 5 | - | 13 | 84 | 102 | |||||||||
| Amortization of acquisition-related intangible assets | 10 | 213 | 223 | 5 | 14 | - | 242 | |||||||||
| Legal provision/reversal (including related interest expense and legal fees) | - | - | - | - | - | 36 | 36 | |||||||||
| Impact of loan portfolio sale | - | - | - | - | - | 136 | 136 | |||||||||
| Impact of FDIC special assessment | - | - | - | - | - | 368 | 368 | |||||||||
| Adjusted net income (loss) (3) | 2,722 | 1,786 | 4,508 | 927 | 1,268 | (796 | ) | 5,907 | ||||||||
| Adjusted net income (loss) available to common shareholders<br>(3) | 2,691 | 1,745 | 4,436 | 920 | 1,241 | (930 | ) | 5,667 |
All values are in US Dollars.
| (1) | U.S. segment comprises reported and adjusted results recorded in U.S. P&C and our U.S. operations in BMO Wealth<br>Management, BMO Capital Markets and Corporate Services. |
|---|---|
| (2) | Acquisition and integration costs are recorded in non-interest expense in the<br>related operating groups. Expenses related to the announced acquisition of Burgundy Asset Management Ltd. were recorded in BMO Wealth Management; expenses related to the acquisition of Bank of the West were recorded in Corporate Services; expenses<br>related to the acquisition of Clearpool and Radicle were recorded in BMO Capital Markets; and expenses related to the acquisition of AIR MILES were recorded in Canadian P&C. |
| --- | --- |
| (3) | Refer to the commentary in this Non-GAAP and Other Financial Measures section for<br>details on adjusting items. |
| --- | --- |
Return on Equity and Return on Tangible Common Equity
| TABLE 4 | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Canadian $ in millions, except as noted) | Q3-2025 | Q2-2025 | Q3-2024 | YTD-2025 | YTD-2024 | ||||||||||
| Reported net income | **** | 2,330 | **** | 1,962 | 1,865 | **** | 6,430 | **** | 5,023 | ||||||
| Net income attributable to<br>non-controlling interest in subsidiaries | **** | 3 | **** | 2 | - | **** | 9 | **** | 6 | ||||||
| Net income attributable to bank shareholders | **** | 2,327 | **** | 1,960 | 1,865 | **** | 6,421 | **** | 5,017 | ||||||
| Dividends on preferred shares and distributions on other equity<br>instruments | **** | 66 | **** | 142 | 51 | **** | 273 | **** | 234 | ||||||
| Net income available to common shareholders (A) | **** | 2,261 | **** | 1,818 | 1,814 | **** | 6,148 | **** | 4,783 | ||||||
| After-tax amortization of<br>acquisition-related intangible assets | **** | 69 | **** | 81 | 79 | **** | 229 | **** | 242 | ||||||
| Net income available to common shareholders after adjusting for<br>amortization of acquisition-related intangible assets (B) | **** | 2,330 | **** | 1,899 | 1,893 | **** | 6,377 | **** | 5,025 | ||||||
| After-tax impact of other<br>adjusting items (1) | **** | - | **** | 3 | 37 | **** | 75 | **** | 642 | ||||||
| Adjusted net income available to common shareholders (C) | **** | 2,330 | **** | 1,902 | 1,930 | **** | 6,452 | **** | 5,667 | ||||||
| Average common shareholders’ equity (D) | **** | 77,048 | **** | 79,288 | 72,305 | **** | 77,996 | **** | 70,750 | ||||||
| Goodwill | **** | (16,536 | ) | (17,089 | ) | (16,519 | ) | **** | (16,943 | ) | (16,369 | ) | |||
| Acquisition-related intangible assets | **** | (2,234 | ) | (2,400 | ) | (2,617 | ) | **** | (2,382 | ) | (2,685 | ) | |||
| Net of related deferred tax liabilities | **** | 935 | **** | 986 | 923 | **** | 976 | **** | 970 | ||||||
| Average tangible common equity (E) | **** | 59,213 | **** | 60,785 | 54,092 | **** | 59,647 | **** | 52,666 | ||||||
| Return on equity (%) (= A/D) (2) | **** | 11.6 | **** | 9.4 | 10.0 | **** | 10.5 | **** | 9.0 | ||||||
| Adjusted return on equity (%) (= C/D) (2) | **** | 12.0 | **** | 9.8 | 10.6 | **** | 11.1 | **** | 10.7 | ||||||
| Return on tangible common equity (%) (= B/E) (2) | **** | 15.6 | **** | 12.8 | 13.9 | **** | 14.3 | **** | 12.7 | ||||||
| Adjusted return on tangible common equity (%) (= C/E) (2) | **** | 15.6 | **** | 12.8 | 14.2 | **** | 14.5 | **** | 14.4 | ||||||
| (1) | Refer to the commentary in this Non-GAAP and Other Financial Measures section for<br>details on adjusting items. | ||||||||||||||
| --- | --- | ||||||||||||||
| (2) | Quarterly calculations are on an annualized basis. | ||||||||||||||
| --- | --- | ||||||||||||||
| 10 BMO Financial Group Third Quarter Report 2025 | |||||||||||||||
| --- |
Return on Equity by Operating Segment ^(1)^ ****
| TABLE 5 | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Q3-2025 | ||||||||||||||||
| (Canadian $ in millions, except as noted) | Canadian P&C | U.S. P&C | Total P&C | BMO WealthManagement | BMO CapitalMarkets | CorporateServices | Total Bank | U.S. Segment (2)(US in millions) | ||||||||
| Reported | ||||||||||||||||
| Net income (loss) available to common shareholders | **** | 855 | **** | 693 | **** | 1,548 | **** | 434 | **** | 427 | **** | (148 | ) | **** | 2,261 | |
| Total average common equity | **** | 16,764 | **** | 34,317 | **** | 51,081 | **** | 4,973 | **** | 13,586 | **** | 7,408 | **** | **** | 77,048 | |
| Return on equity (%) | **** | 20.2 | **** | 8.0 | **** | 12.0 | **** | 34.6 | **** | 12.5 | **** | na | **** | **** | 11.6 | |
| Adjusted (3) | ||||||||||||||||
| Net income (loss) available to common shareholders | **** | 858 | **** | 753 | **** | 1,611 | **** | 439 | **** | 431 | **** | (151 | ) | **** | 2,330 | |
| Total average common equity | **** | 16,764 | **** | 34,317 | **** | 51,081 | **** | 4,973 | **** | 13,586 | **** | 7,408 | **** | **** | 77,048 | |
| Return on equity (%) | **** | 20.3 | **** | 8.7 | **** | 12.5 | **** | 35.0 | **** | 12.6 | **** | na | **** | **** | 12.0 | |
| Q2-2025 | ||||||||||||||||
| (Canadian $ in millions, except as noted) | Canadian P&C | U.S. P&C | Total P&C | BMO Wealth<br>Management | BMO Capital<br>Markets | Corporate<br>Services | Total Bank | U.S. Segment (2)(US in millions) | ||||||||
| Reported | ||||||||||||||||
| Net income (loss) available to common shareholders | 771 | 527 | 1,298 | 358 | 421 | (259 | ) | 1,818 | ||||||||
| Total average common equity | 16,760 | 35,461 | 52,221 | 5,092 | 13,931 | 8,044 | 79,288 | |||||||||
| Return on equity (%) | 18.9 | 6.1 | 10.2 | 28.9 | 12.4 | na | 9.4 | |||||||||
| Adjusted (3) | ||||||||||||||||
| Net income (loss) available to common shareholders | 775 | 599 | 1,374 | 360 | 424 | (256 | ) | 1,902 | ||||||||
| Total average common equity | 16,760 | 35,461 | 52,221 | 5,092 | 13,931 | 8,044 | 79,288 | |||||||||
| Return on equity (%) | 19.0 | 6.9 | 10.8 | 29.1 | 12.5 | na | 9.8 | |||||||||
| Q3-2024 | ||||||||||||||||
| (Canadian $ in millions, except as noted) | Canadian P&C | U.S. P&C | Total P&C | BMO Wealth<br>Management | BMO Capital<br>Markets | Corporate<br>Services | Total Bank | U.S. Segment (2)(US in millions) | ||||||||
| Reported | ||||||||||||||||
| Net income (loss) available to common shareholders | 904 | 459 | 1,363 | 359 | 380 | (288 | ) | 1,814 | ||||||||
| Total average common equity | 16,104 | 33,303 | 49,407 | 4,823 | 13,232 | 4,843 | 72,305 | |||||||||
| Return on equity (%) | 22.3 | 5.5 | 11.0 | 29.7 | 11.4 | na | 10.0 | |||||||||
| Adjusted (3) | ||||||||||||||||
| Net income (loss) available to common shareholders | 910 | 528 | 1,438 | 361 | 385 | (254 | ) | 1,930 | ||||||||
| Total average common equity | 16,104 | 33,303 | 49,407 | 4,823 | 13,232 | 4,843 | 72,305 | |||||||||
| Return on equity (%) | 22.4 | 6.3 | 11.6 | 29.8 | 11.6 | na | 10.6 | |||||||||
| YTD-2025 | ||||||||||||||||
| (Canadian $ in millions, except as noted) | Canadian P&C | U.S. P&C | Total P&C | BMO WealthManagement | BMO CapitalMarkets | CorporateServices | Total Bank | U.S. Segment (2)(US in millions) | ||||||||
| Reported | ||||||||||||||||
| Net income (loss) available to common shareholders | **** | 2,508 | **** | 1,785 | **** | 4,293 | **** | 1,159 | **** | 1,425 | **** | (729 | ) | **** | 6,148 | |
| Total average common equity | **** | 16,679 | **** | 35,280 | **** | 51,959 | **** | 5,024 | **** | 13,688 | **** | 7,325 | **** | **** | 77,996 | |
| Return on equity (%) | **** | 20.1 | **** | 6.8 | **** | 11.0 | **** | 30.8 | **** | 13.9 | **** | na | **** | **** | 10.5 | |
| Adjusted (3) | ||||||||||||||||
| Net income (loss) available to common shareholders | **** | 2,518 | **** | 1,987 | **** | 4,505 | **** | 1,168 | **** | 1,436 | **** | (657 | ) | **** | 6,452 | |
| Total average common equity | **** | 16,679 | **** | 35,280 | **** | 51,959 | **** | 5,024 | **** | 13,688 | **** | 7,325 | **** | **** | 77,996 | |
| Return on equity (%) | **** | 20.2 | **** | 7.5 | **** | 11.6 | **** | 31.1 | **** | 14.0 | **** | na | **** | **** | 11.1 | |
| YTD-2024 | ||||||||||||||||
| (Canadian $ in millions, except as noted) | Canadian P&C | U.S. P&C | Total P&C | BMO Wealth<br>Management | BMO Capital<br>Markets | Corporate<br>Services | Total Bank | U.S. Segment (2)(US in millions) | ||||||||
| Reported | ||||||||||||||||
| Net income (loss) available to common shareholders | 2,676 | 1,532 | 4,208 | 915 | 1,214 | (1,554 | ) | 4,783 | ||||||||
| Total average common equity | 15,901 | 33,210 | 49,111 | 4,746 | 13,148 | 3,745 | 70,750 | |||||||||
| Return on equity (%) | 22.5 | 6.2 | 11.4 | 25.7 | 12.3 | na | 9.0 | |||||||||
| Adjusted (3) | ||||||||||||||||
| Net income (loss) available to common shareholders | 2,691 | 1,745 | 4,436 | 920 | 1,241 | (930 | ) | 5,667 | ||||||||
| Total average common equity | 15,901 | 33,210 | 49,111 | 4,746 | 13,148 | 3,745 | 70,750 | |||||||||
| Return on equity (%) | 22.6 | 7.0 | 12.1 | 25.9 | 12.6 | na | 10.7 |
All values are in US Dollars.
| (1) | Return on equity is based on allocated capital. Effective the first quarter of fiscal 2025, the capital allocation rate<br>increased to 12.0% of risk weighted assets, compared with 11.5% in fiscal 2024. Capital is allocated to the operating segments based on the amount of regulatory capital required to support business activities, with unallocated capital reported in<br>Corporate Services. Capital allocation methodologies are reviewed at least annually. For further information, refer to the How BMO Reports Operating Group Results section. Return on equity ratios are presented on an annualized basis.<br> |
|---|---|
| (2) | U.S. segment comprises reported and adjusted results and allocated capital recorded in U.S. P&C and our U.S.<br>operations in BMO Wealth Management, BMO Capital Markets and Corporate Services. |
| --- | --- |
| (3) | Refer to the commentary in this Non-GAAP and Other Financial Measures section for<br>details on adjusting items. |
| --- | --- |
na – not applicable
Caution
This Non-GAAP and Other Financial Measures section contains forward-looking statements. Please refer to the Caution Regarding Forward-Looking Statements.
| BMO Financial Group Third Quarter Report 2025 11 |
|---|
Foreign Exchange
| TABLE 6 | ||||||||
|---|---|---|---|---|---|---|---|---|
| YTD-2025 | ||||||||
| (Canadian in millions, except as noted) | vs. Q2-2025 | vs. YTD-2024 | ||||||
| Canadian/U.S. dollar exchange rate (average) | ||||||||
| Current period | 1.3730 | 1.3730 | 1.4077 | |||||
| Prior period | 1.3705 | 1.4203 | 1.3574 | |||||
| Effects on U.S. segment reported results | ||||||||
| Increased (Decreased) net interest income | 4 | (85 | ) | 241 | ||||
| Increased (Decreased)<br>non-interest revenue | 2 | (38 | ) | 142 | ||||
| Increased (Decreased) total revenue | 6 | (123 | ) | 383 | ||||
| Decreased (Increased) provision for credit losses | (1 | ) | 14 | (41 | ) | |||
| Decreased (Increased) non-interest expense | (4 | ) | 78 | (270 | ) | |||
| Decreased (Increased) provision for income taxes | - | 7 | (12 | ) | ||||
| Increased (Decreased) net income | 1 | (24 | ) | 60 | ||||
| Impact on earnings per share () | - | (0.03 | ) | 0.08 | ||||
| Effects on U.S. segment adjusted results | ||||||||
| Increased (Decreased) net interest income | 4 | (85 | ) | 243 | ||||
| Increased (Decreased)<br>non-interest revenue | 3 | (38 | ) | 148 | ||||
| Increased (Decreased) total revenue | 7 | (123 | ) | 391 | ||||
| Decreased (Increased) provision for credit losses | (1 | ) | 14 | (41 | ) | |||
| Decreased (Increased) non-interest expense | (4 | ) | 74 | (236 | ) | |||
| Decreased (Increased) provision for income taxes | (1 | ) | 8 | (23 | ) | |||
| Increased (Decreased) net income | 1 | (27 | ) | 91 | ||||
| Impact on earnings per share () | - | (0.04 | ) | 0.12 |
All values are in US Dollars.
Adjusted results in this table are on a non-GAAP basis and are discussed in the Non-GAAP and Other Financial Measures section.
The table above indicates the relevant average Canadian/U.S. dollar exchange rates and the impact of changes in those rates on BMO’s U.S. segment reported and adjusted results. Our U.S. segment comprises reported and adjusted results recorded in U.S. P&C and our U.S. operations in BMO Wealth Management, BMO Capital Markets and Corporate Services.
The Canadian dollar equivalents of BMO’s U.S. segment results that are denominated in U.S. dollars decreased in the third quarter of fiscal 2025, relative to the second quarter of fiscal 2025 and increased relative to the third quarter of fiscal 2024, due to changes in the Canadian/U.S. dollar exchange rate. References in this document to the impact of the U.S. dollar do not include U.S. dollar-denominated amounts recorded outside of BMO’s U.S. segment.
Economically, our U.S. dollar income stream was not hedged against the risk of changes in foreign exchange rates during fiscal 2025 and fiscal 2024. Changes in exchange rates will affect future results measured in Canadian dollars, and the impact on those results is a function of the periods in which revenue, expenses and provisions for (or recoveries of) credit losses and income taxes arise.
Refer to the Enterprise-Wide Capital Management section of BMO’s 2024 Annual MD&A for a discussion of the impact that changes in foreign exchange rates can have on BMO’s capital position.
Net Income
Q3 2025 vs. Q3 2024
Reported net income was $2,330 million, an increase of $465 million or 25% from the prior year, and adjusted net income was $2,399 million, an increase of $418 million or 21%. Reported earnings per share (EPS) was $3.14, an increase of $0.66 from the prior year, and adjusted EPS was $3.23, an increase of $0.59.
The increase in reported and adjusted net income reflected higher revenue and a lower provision for credit losses, partially offset by higher expenses. Reported and adjusted net income increased in U.S. P&C, BMO Wealth Management and BMO Capital Markets, and decreased in Canadian P&C. Corporate Services recorded a lower net loss on both a reported and an adjusted basis.
Q3 2025 vs. Q2 2025
Reported net income increased $368 million or 19% from the prior quarter, and adjusted net income increased $353 million or 17%. Reported EPS increased $0.64 from the prior quarter, and adjusted EPS increased $0.61, due to higher net income and lower dividends on preferred shares and distributions on other equity instruments.
The increase in reported and adjusted net income reflected higher revenue and a lower provision for credit losses, partially offset by higher expenses. Reported and adjusted net income increased across all operating segments. Corporate Services recorded a lower net loss on both a reported basis and an adjusted basis.
Q3 YTD 2025 vs. Q3 YTD 2024
Reported net income was $6,430 million, an increase of $1,407 million or 28% from the prior year, and adjusted net income was $6,734 million, an increase of $827 million or 14%. Reported EPS was $8.47, an increase of $1.90 from the prior year, and adjusted EPS was $8.89, an increase of $1.11.
The increase in reported results included the impact of the FDIC special assessment and a net accounting loss on the sale of a portfolio of recreation vehicles in the prior year, as well as lower acquisition and integration-related costs, partially offset by the impact of aligning accounting policies for employee vacation across legal entities in the current year. Reported and adjusted results increased due to higher revenue, partially offset by higher expenses and a higher
| 12 BMO Financial Group Third Quarter Report 2025 |
|---|
provision for credit losses. Reported and adjusted net income increased in U.S. P&C, BMO Wealth Management and BMO Capital Markets, partially offset by a decrease in Canadian P&C. Corporate Services recorded a lower net loss on both a reported basis and an adjusted basis.
Refer to the Non-GAAP and Other Financial Measures section for further information on non-GAAP amounts, measures and ratios, including adjusting items in this Net Income section.
Revenue
Q3 2025 vs. Q3 2024
Reported and adjusted revenue was $8,988 million, an increase of $796 million or 10% from the prior year on a reported basis, and an increase of $782 million or 10% on an adjusted basis. Reported and adjusted revenue increased across all operating segments and in Corporate Services.
Reported and adjusted net interest income was $5,496 million, an increase of $702 million or 15% from the prior year on a reported basis, and an increase of $688 million or 14% on an adjusted basis, driven by higher net interest margin, balance growth in Canadian P&C and BMO Wealth Management, higher trading-related net interest income and higher net interest income in Corporate Services. Trading-related net interest income was $325 million, an increase of $243 million from the prior year.
BMO’s overall reported net interest margin of 1.69% increased 17 basis points from the prior year. Adjusted net interest margin, excluding trading-related net interest income and trading and insurance assets was 1.99%, an increase of 16 basis points, primarily due to higher deposit and loan margins, and higher net interest income and lower low-yielding assets in Corporate Services.
Reported and adjusted non-interest revenue was $3,492 million, an increase of $94 million or 3% from the prior year, driven by higher underwriting and advisory, wealth management and deposit fee revenue, as well as a gain on the sale of a non-strategic portfolio of insurance contracts, partially offset by lower trading revenue and lending fee revenue. Trading non-interest revenue of $406 million decreased $216 million from the prior year, offset in net interest income.
Q3 2025 vs. Q2 2025
Reported and adjusted revenue increased $309 million or 4% from the prior quarter. The impact of the weaker U.S. dollar decreased revenue by 1%. Revenue increased in Canadian P&C, BMO Wealth Management, Corporate Services and U.S. P&C, and was relatively unchanged in BMO Capital Markets.
Net interest income increased $399 million or 8% from the prior quarter, driven by higher trading-related net interest income, the impact of three additional days in the current quarter and higher net interest income in Corporate Services, partially offset by the impact of the weaker U.S. dollar. Trading-related net interest income increased $261 million from the prior quarter.
BMO’s overall reported net interest margin increased 9 basis points from the prior quarter. Adjusted net interest margin, excluding trading-related net interest income and trading and insurance assets increased 2 basis points, primarily due to higher net interest income and lower low-yielding assets in Corporate Services, partially offset by lower contribution from U.S. P&C.
Reported and adjusted non-interest revenue decreased $90 million or 2% from the prior quarter, due to lower trading revenue and the impact of the weaker U.S. dollar, partially offset by lower markdowns on fair value loans and higher net gains on investments compared with the prior quarter, and higher wealth management and underwriting and advisory fee revenue. The quarter also benefitted from the gain on the portfolio sale noted above, while the prior quarter included a loss on the strategic sale of a non-relationship U.S. credit card portfolio. Trading non-interest revenue decreased $413 million from the prior quarter.
Q3 YTD 2025 vs. Q3 YTD 2024
Reported and adjusted revenue was $26,933 million, an increase of $3,095 million or 13% from the prior year on a reported basis, and $2,889 million or 12% on an adjusted basis. The impact of the stronger U.S. dollar increased revenue by 2% on both a reported and an adjusted basis. Reported revenue in the prior year was impacted by the net accounting loss on the sale of a portfolio of recreational vehicle loans. Revenue increased across all operating segments and in Corporate Services.
Reported and adjusted net interest income was $15,991 million, an increase of $1,961 million or 14% from the prior year on a reported basis, and an increase of $1,919 million or 14% on an adjusted basis. The increase was driven by higher net interest margin, balance growth in Canadian P&C and BMO Wealth Management, higher trading-related net interest income and higher net interest income in Corporate Services, as well as the impact of the stronger U.S. dollar. Trading-related net interest income was $659 million, an increase of $435 million from the prior year.
BMO’s overall reported net interest margin of 1.64% increased 11 basis points from the prior year. Adjusted net interest margin, excluding trading-related net interest income and trading and insurance assets of 1.96% increased 13 basis points, primarily due to higher loan and deposit margins and higher net interest income and lower low-yielding assets in Corporate Services.
Reported and adjusted non-interest revenue was $10,942 million, an increase of $1,134 million or 12% from the prior year on a reported basis, and an increase of $970 million or 10% on an adjusted basis, with increases across most categories, including higher wealth management fee revenue, trading revenue, underwriting and advisory and deposit fee revenue, and the impact of the stronger U.S. dollar, partially offset by lower lending fee revenue, including the impact of the transition of bankers’ acceptances exposures to loans, and higher markdowns on fair value loans. Trading non-interest revenue of $2,027 million increased $346 million from the prior year.
Net interest income and non-interest revenue are detailed in the unaudited interim consolidated financial statements.
Refer to the Non-GAAP and Other Financial Measures section for further information on non-GAAP amounts, measures and ratios, including adjusting items in this Revenue section.
| BMO Financial Group Third Quarter Report 2025 13 |
|---|
Change in Net Interest Income, Average Earning Assets and Net Interest Margin ^(1)^ ****
| TABLE 7 | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Average earning assets (3) | Net interest margin (in basis points) | ||||||||||||||||
| (Canadian in millions, except as noted) | Q2-2025 | Q3-2024 | Q3-2025 | Q2-2025 | Q3-2024 | Q3-2025 | Q2-2025 | Q3-2024 | |||||||||
| Canadian P&C | 2,459 | 2,359 | 2,253 | **** | 343,805 | 341,885 | 323,485 | **** | 284 | 283 | 277 | ||||||
| U.S. P&C | 2,105 | 2,122 | 2,056 | **** | 214,154 | 223,071 | 219,443 | **** | 390 | 390 | 373 | ||||||
| Personal and Commercial Banking (P&C) | 4,564 | 4,481 | 4,309 | **** | 557,959 | 564,956 | 542,928 | **** | 325 | 325 | 316 | ||||||
| All other operating groups and Corporate Services | 932 | 616 | 485 | **** | 729,856 | 743,818 | 716,049 | **** | na | na | na | ||||||
| Total reported | 5,496 | 5,097 | 4,794 | **** | 1,287,815 | 1,308,774 | 1,258,977 | **** | 169 | 160 | 152 | ||||||
| Total adjusted | 5,496 | 5,097 | 4,808 | **** | 1,287,815 | 1,308,774 | 1,258,977 | **** | 169 | 160 | 152 | ||||||
| Trading net interest income and trading and insurance assets | 325 | 64 | 82 | **** | 257,313 | 262,362 | 232,618 | **** | na | na | na | ||||||
| Total reported, excluding trading and insurance | 5,171 | 5,033 | 4,712 | **** | 1,030,502 | 1,046,412 | 1,026,359 | **** | 199 | 197 | 183 | ||||||
| Total adjusted, excluding trading and insurance | 5,171 | 5,033 | 4,726 | **** | 1,030,502 | 1,046,412 | 1,026,359 | **** | 199 | 197 | 183 | ||||||
| U.S. P&C (US in millions) | 1,533 | 1,495 | 1,500 | **** | 155,974 | 157,057 | 160,119 | **** | 390 | 390 | 373 | ||||||
| Average earning assets (3) | Net interest margin (in basis points) | ||||||||||||||||
| (Canadian in millions, except as noted) | YTD-2024 | YTD-2025 | YTD-2024 | YTD-2025 | YTD-2024 | ||||||||||||
| Canadian P&C | 7,203 | 6,548 | **** | 341,670 | 314,451 | **** | 282 | 278 | |||||||||
| U.S. P&C | 6,432 | 6,108 | **** | 221,462 | 215,797 | **** | 388 | 378 | |||||||||
| Personal and Commercial Banking (P&C) | 13,635 | 12,656 | **** | 563,132 | 530,248 | **** | 324 | 319 | |||||||||
| All other operating groups and Corporate Services | 2,356 | 1,374 | **** | 742,207 | 693,122 | **** | na | na | |||||||||
| Total reported | 15,991 | 14,030 | **** | 1,305,339 | 1,223,370 | **** | 164 | 153 | |||||||||
| Total adjusted | 15,991 | 14,072 | **** | 1,305,339 | 1,223,370 | **** | 164 | 154 | |||||||||
| Trading net interest income and trading and insurance assets | 659 | 224 | **** | 261,209 | 213,090 | **** | na | na | |||||||||
| Total reported, excluding trading and insurance | 15,332 | 13,806 | **** | 1,044,130 | 1,010,280 | **** | 196 | 183 | |||||||||
| Total adjusted, excluding trading and insurance | 15,332 | 13,848 | **** | 1,044,130 | 1,010,280 | **** | 196 | 183 | |||||||||
| U.S. P&C (US in millions) | 4,569 | 4,500 | **** | 157,301 | 158,976 | **** | 388 | 378 |
All values are in US Dollars.
| (1) | Adjusted results and ratios in this table are on a non-GAAP basis and are<br>discussed in the Non-GAAP and Other Financial Measures section. |
|---|---|
| (2) | Operating group revenue is presented on a taxable equivalent basis (teb) in net interest income. For further information,<br>refer to the How BMO Reports Operating Group Results section in BMO’s 2024 Annual MD&A. |
| --- | --- |
| (3) | Average earning assets represents the daily average balance of interest bearing deposits at central banks, deposits with<br>other banks, securities borrowed or purchased under resale agreement, securities and loans over the period. |
| --- | --- |
na – not applicable
Certain comparative figures have been reclassified to conform with the current period’s presentation.
Total Provision for Credit Losses
| TABLE 8 | ||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Canadian $ in millions) | Canadian P&C | U.S. P&C | Total P&C | BMO WealthManagement | BMO CapitalMarkets | CorporateServices | Total Bank | |||||||||||
| Q3-2025 | ||||||||||||||||||
| Provision for credit losses on impaired loans | **** | 489 | **** | 240 | **** | **** | 729 | **** | 2 | **** | **** | 33 | **** | **** | 9 | **** | **** | 773 |
| Provision (recovery of provision) for credit losses on performing<br>loans | **** | 76 | **** | (69 | ) | **** | 7 | **** | 1 | **** | **** | 23 | **** | **** | (7 | ) | **** | 24 |
| Total provision (recovery of provision) for credit losses | **** | 565 | **** | 171 | **** | **** | 736 | **** | 3 | **** | **** | 56 | **** | **** | 2 | **** | **** | 797 |
| Total PCL-to-average net<br>loans and acceptances (%) (1) | **** | 0.66 | **** | 0.34 | **** | **** | 0.54 | **** | 0.03 | **** | **** | 0.27 | **** | **** | nm | **** | **** | 0.47 |
| PCL on impaired loans-to-average net loans and acceptances (%) (1) | **** | 0.57 | **** | 0.47 | **** | **** | 0.53 | **** | 0.02 | **** | **** | 0.16 | **** | **** | nm | **** | **** | 0.45 |
| Q2-2025 | ||||||||||||||||||
| Provision for credit losses on impaired loans | 476 | 247 | 723 | 2 | 28 | 12 | 765 | |||||||||||
| Provision (recovery of provision) for credit losses on performing<br>loans | 132 | 87 | 219 | 6 | 73 | (9 | ) | 289 | ||||||||||
| Total provision (recovery of provision) for credit losses | 608 | 334 | 942 | 8 | 101 | 3 | 1,054 | |||||||||||
| Total PCL-to-average net<br>loans and acceptances (%) (1) | 0.74 | 0.66 | 0.70 | 0.07 | 0.51 | nm | 0.63 | |||||||||||
| PCL on impaired loans-to-average net loans and acceptances (%) (1) | 0.58 | 0.49 | 0.54 | 0.01 | 0.13 | nm | 0.46 | |||||||||||
| Q3-2024 | ||||||||||||||||||
| Provision for credit losses on impaired loans | 353 | 368 | 721 | 1 | 92 | 14 | 828 | |||||||||||
| Provision (recovery of provision) for credit losses on performing<br>loans | 35 | 26 | 61 | (10 | ) | 36 | (9 | ) | 78 | |||||||||
| Total provision (recovery of provision) for credit losses | 388 | 394 | 782 | (9 | ) | 128 | 5 | 906 | ||||||||||
| Total PCL-to-average net<br>loans and acceptances (%) (1) | 0.48 | 0.76 | 0.59 | (0.08 | ) | 0.61 | nm | 0.54 | ||||||||||
| PCL on impaired loans-to-average net loans and acceptances (%) (1) | 0.43 | 0.71 | 0.54 | 0.01 | 0.44 | nm | 0.50 | |||||||||||
| YTD-2025 | ||||||||||||||||||
| Provision for credit losses on impaired loans | **** | 1,456 | **** | 799 | **** | **** | 2,255 | **** | 5 | **** | **** | 96 | **** | **** | 41 | **** | **** | 2,397 |
| Provision (recovery of provision) for credit losses on performing<br>loans | **** | 259 | **** | 120 | **** | **** | 379 | **** | 6 | **** | **** | 107 | **** | **** | (27 | ) | **** | 465 |
| Total provision (recovery of provision) for credit losses | **** | 1,715 | **** | 919 | **** | **** | 2,634 | **** | 11 | **** | **** | 203 | **** | **** | 14 | **** | **** | 2,862 |
| Total PCL-to-average net<br>loans and acceptances (%) (1) | **** | 0.68 | **** | 0.59 | **** | **** | 0.64 | **** | 0.03 | **** | **** | 0.32 | **** | **** | nm | **** | **** | 0.56 |
| PCL on impaired loans-to-average net loans and acceptances (%) (1) | **** | 0.58 | **** | 0.51 | **** | **** | 0.55 | **** | 0.01 | **** | **** | 0.15 | **** | **** | nm | **** | **** | 0.47 |
| YTD-2024 | ||||||||||||||||||
| Provision for credit losses on impaired loans | 886 | 839 | 1,725 | 10 | 164 | 60 | 1,959 | |||||||||||
| Provision (recovery of provision) for credit losses on performing<br>loans | 195 | 126 | 321 | (13 | ) | (6 | ) | (23 | ) | 279 | ||||||||
| Total provision (recovery of provision) for credit losses | 1,081 | 965 | 2,046 | (3 | ) | 158 | 37 | 2,238 | ||||||||||
| Total PCL-to-average net<br>loans and acceptances (%) (1) | 0.45 | 0.63 | 0.52 | (0.01 | ) | 0.25 | nm | 0.46 | ||||||||||
| PCL on impaired loans-to-average net loans and acceptances (%) (1) | 0.37 | 0.55 | 0.44 | 0.03 | 0.26 | nm | 0.40 | |||||||||||
| (1) | PCL ratios are presented on an annualized basis. | |||||||||||||||||
| --- | --- |
nm – not meaningful
| 14 BMO Financial Group Third Quarter Report 2025 |
|---|
Q3 2025 vs. Q3 2024
Total provision for credit losses was $797 million, compared with a provision of $906 million in the prior year. Total provision for credit losses as a percentage of average net loans and acceptances was 47 basis points, compared with 54 basis points in the prior year. The provision for credit losses on impaired loans was $773 million, a decrease of $55 million, largely due to lower provisions in U.S. Commercial Banking and BMO Capital Markets, partially offset by higher provisions in Canadian unsecured consumer lending and Canadian Commercial Banking. The provision for credit losses on impaired loans as a percentage of average net loans and acceptances was 45 basis points, compared with 50 basis points in the prior year. There was a $24 million provision for credit losses on performing loans, compared with a $78 million provision in the prior year. The provision for credit losses on performing loans in the current quarter reflected an improvement in the macro-economic scenarios, as well as lower balances in certain portfolios, which were more than offset by uncertainty in credit conditions and portfolio credit migration.
Q3 2025 vs. Q2 2025
Total provision for credit losses decreased $257 million from the prior quarter, due to a lower provision on performing loans. The provision for credit losses on impaired loans increased $8 million, primarily due to higher provisions in Canadian unsecured consumer lending, partially offset by lower provisions in Canadian Commercial Banking and U.S. Commercial Banking. The provision for credit losses on impaired loans as a percentage of average net loans and acceptances was 45 basis points, compared with 46 basis points in the prior quarter. There was a $24 million provision for credit losses on performing loans, compared with a $289 million provision in the prior quarter.
Q3 YTD 2025 vs. Q3 YTD 2024
Total provision for credit losses was $2,862 million, compared with a provision of $2,238 million in the prior year. The total provision for credit losses ratio was 56 basis points, compared with 46 basis points in the prior year. The provision for credit losses on impaired loans was $2,397 million, an increase of $438 million from the prior year, primarily due to higher provisions in Canadian Commercial Banking and unsecured consumer lending, partially offset by lower provisions in BMO Capital Markets and U.S. Commercial Banking. The provision for credit losses on impaired loans ratio was 47 basis points, compared with 40 basis points in the prior year. There was a $465 million provision for credit losses on performing loans in the current year, compared with a $279 million provision in the prior year.
Impaired Loans
| TABLE 9 | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Canadian $ in millions, except as noted) | Q3-2025 | Q2-2025 | Q3-2024 | YTD-2025 | YTD-2024 | ||||||||||
| GIL, beginning of period | **** | 6,739 | **** | 6,954 | 5,260 | **** | 5,843 | **** | 3,960 | ||||||
| Classified as impaired during the period | **** | 1,796 | **** | 1,771 | 1,847 | **** | 5,940 | **** | 5,201 | ||||||
| Transferred to not impaired during the period | **** | (415 | ) | (440 | ) | (269 | ) | **** | (1,219 | ) | (796 | ) | |||
| Net repayments | **** | (655 | ) | (731 | ) | (317 | ) | **** | (2,002 | ) | (1,048 | ) | |||
| Amounts written-off | **** | (442 | ) | (543 | ) | (451 | ) | **** | (1,409 | ) | (1,213 | ) | |||
| Disposals of loans | **** | (89 | ) | (65 | ) | (37 | ) | **** | (156 | ) | (58 | ) | |||
| Foreign exchange and other movements | **** | 17 | **** | (207 | ) | 8 | **** | (46 | ) | (5 | ) | ||||
| GIL, end of period | **** | 6,951 | **** | 6,739 | 6,041 | **** | 6,951 | **** | 6,041 | ||||||
| GIL to gross loans and acceptances (%) | **** | 1.02 | **** | 0.99 | 0.89 | **** | 1.02 | **** | 0.89 |
Total gross impaired loans and acceptances (GIL) were $6,951 million, an increase from $6,739 million in the prior quarter, driven by higher impaired loans in Canadian Commercial Banking, primarily in the commercial real estate sector. GIL as a percentage of gross loans and acceptances increased modestly to 1.02% from 0.99% in the prior quarter.
Loans classified as impaired during the quarter were $1,796 million, an increase from $1,771 million in the prior quarter, reflecting higher formations in business and government lending.
Factors contributing to the change in GIL are outlined in the table above.
| BMO Financial Group Third Quarter Report 2025 15 |
|---|
Non-Interest Expense
Q3 2025 vs. Q3 2024
Reported non-interest expense was $5,105 million, an increase of $266 million or 5% from the prior year, and adjusted non-interest expense was $5,012 million, an increase of $315 million or 7%.
Reported results included lower acquisition and integration costs and lower amortization of acquisition-related intangible assets. Adjusted non-interest expense increased, primarily due to higher employee-related expenses, including performance-based compensation, and higher computer and equipment costs.
Reported efficiency ratio was 56.8%, compared with 59.1% in the prior year, and adjusted efficiency ratio was 55.8%, compared with 57.3%. Reported operating leverage was positive 4.2% and adjusted operating leverage was positive 2.9%.
Q3 2025 vs. Q2 2025
Reported non-interest expense increased $86 million or 2% from the prior quarter, and adjusted non-interest expense increased $105 million or 2%. The impact of the weaker U.S. dollar decreased non-interest expense by 2% on both a reported basis and an adjusted basis.
Reported non-interest expense included lower amortization of acquisition-related intangible assets. The increase in adjusted non-interest expense was primarily due to higher employee-related expenses, including performance-based compensation, partially offset by the impact of the weaker U.S. dollar.
Q3 YTD 2025 vs. Q3 YTD 2024
Reported non-interest expense was $15,551 million, an increase of $479 million or 3% from the prior year, and adjusted non-interest expense was $15,141 million, an increase of $1,028 million or 7%. The impact of the stronger U.S. dollar increased non-interest expense by 2% on both a reported and an adjusted basis.
Reported results reflected the impact of the FDIC special assessment expense in the prior year and lower acquisition and integration costs, partially offset by the impact of the alignment of accounting policies for employee vacation across legal entities in the current year. The increase in adjusted non-interest expense was driven by higher employee-related expenses, including performance-based compensation, higher computer and equipment costs, premises costs and professional fees, as well as the impact of the stronger U.S. dollar.
The reported efficiency ratio was 57.7%, compared with 63.2% in the prior year. The adjusted efficiency ratio was 56.2%, compared with 58.7% in the prior year.
Non-interest expense is detailed in the unaudited interim consolidated financial statements.
Refer to the Non-GAAP and Other Financial Measures section for further information on non-GAAP amounts, measures and ratios, including adjusting items in this Non-Interest Expense section.
Provision for Income Taxes
The reported provision for income taxes was $756 million, an increase of $174 million from the prior year, and an increase of $112 million from the prior quarter. The reported effective tax rate was 24.5%, compared with 23.8% in the prior year and 24.7% in the prior quarter. The adjusted provision for income taxes was $780 million, an increase of $158 million from the prior year, and an increase of $108 million from the prior quarter. The adjusted effective tax rate was 24.5%, compared with 23.9% in the prior year and 24.7% in the prior quarter.
The change in the reported and adjusted effective tax rate relative to the prior year was primarily due to earnings mix, including the impact of lower income in the prior year and the impact of the Global Minimum Tax Act (GMTA) in the current year. For further information on the GMTA, refer to Note 11 of the unaudited interim consolidated financial statements.
Refer to the Non-GAAP and Other Financial Measures section for further information on non-GAAP amounts, measures and ratios, including adjusting items in this Provision for Income Taxes section.
| 16 BMO Financial Group Third Quarter Report 2025 |
|---|
Balance Sheet
| TABLE 10 | ||||
|---|---|---|---|---|
| (Canadian $ in millions) | As at July 31, 2025 | As at October 31, 2024 | ||
| Assets | ||||
| Cash and cash equivalents and interest bearing deposits with banks | **** | 62,794 | 68,738 | |
| Securities | **** | 399,758 | 396,880 | |
| Securities borrowed or purchased under resale agreements | **** | 128,279 | 110,907 | |
| Net loans and acceptances | **** | 677,585 | 678,375 | |
| Derivative instruments | **** | 44,197 | 47,253 | |
| Other assets | **** | 118,940 | 107,494 | |
| Total assets | **** | 1,431,553 | 1,409,647 | |
| Liabilities and Equity | ||||
| Deposits | **** | 955,363 | 982,440 | |
| Derivative instruments | **** | 51,452 | 58,303 | |
| Securities lent or sold under repurchase agreements | **** | 126,759 | 110,791 | |
| Other liabilities | **** | 202,748 | 165,450 | |
| Subordinated debt | **** | 8,466 | 8,377 | |
| Equity | **** | 86,723 | 84,250 | |
| Non-controlling interest in<br>subsidiaries | **** | 42 | 36 | |
| Total liabilities and equity | **** | 1,431,553 | 1,409,647 |
Certain comparative figures have been reclassified to conform with the current period’s presentation.
Total assets were $1,431.6 billion as at July 31, 2025, an increase of $21.9 billion from October 31, 2024. The impact of the weaker U.S. dollar decreased assets by $3.3 billion, excluding the impact on derivative assets.
Cash and cash equivalents and interest bearing deposits with banks decreased $5.9 billion, due to lower balances held with central banks.
Securities increased $2.9 billion, primarily due to higher levels of client activity in BMO Capital Markets, partially offset by the impact of the weaker U.S. dollar and lower balances in Corporate Services.
Securities borrowed or purchased under resale agreements increased $17.4 billion, due to higher levels of client activity in BMO Capital Markets.
Net loans and acceptances decreased $0.8 billion, due to the impact of the weaker U.S. dollar. Business and government loans and acceptances decreased $3.4 billion, primarily due to lower balances in U.S. P&C and the impact of the weaker U.S. dollar, partially offset by higher balances in Canadian P&C. Consumer instalment and other personal were relatively unchanged and credit card balances decreased $0.6 billion. Residential mortgages increased $4.1 billion.
Derivative assets decreased $3.1 billion, driven by a decrease in the fair value of equity and interest rate contracts, partially offset by an increase in the fair value of foreign exchange contracts.
Other assets increased $11.4 billion, primarily in BMO Capital Markets, due to changes in the balance of unsettled securities transactions and higher cash collateral balances posted with counterparties.
Liabilities increased $19.4 billion from October 31, 2024. The impact of the weaker U.S. dollar decreased liabilities by $3.0 billion, excluding the impact on derivative liabilities.
Deposits decreased $27.1 billion. Customer deposits decreased $10.3 billion, with lower balances in U.S. P&C reflecting the impact of deposit optimization activities, Canadian P&C and the impact of the weaker U.S. dollar, partially offset by higher balances in BMO Wealth Management and BMO Capital Markets. Other deposits decreased $16.8 billion, due to lower wholesale funding in Corporate Services, lower balances in Global Markets and the impact of the weaker U.S. dollar.
Derivative liabilities decreased $6.9 billion, driven by a decrease in the fair value of equity and interest rate contracts.
Securities lent or sold under repurchase agreements increased $16.0 billion, due to higher levels of client activity in BMO Capital Markets.
Other liabilities increased $37.3 billion, primarily in BMO Capital Markets, due to an increase in securities sold but not yet purchased, changes in the balance of unsettled securities transactions and higher securitization liabilities, partially offset by lower balances in Corporate Services.
Subordinated debt was relatively unchanged, reflecting an issuance in the second quarter, net of a redemption in the current quarter.
Equity increased $2.5 billion from October 31, 2024. Accumulated other comprehensive income increased $0.7 billion, primarily due to a decline in accumulated other comprehensive loss on cash flow hedges, partially offset by losses on remeasurement of own credit risk on financial liabilities designated at fair value. Retained earnings increased $1.1 billion, as a result of net income earned in the year, partially offset by dividends and distributions on other equity instruments and the repurchase of common shares for cancellation under the normal course issuer bid (NCIB). Preferred shares and other equity instruments increased $1.1 billion, due to the issuance of Limited Recourse Capital Notes, Series 6 (non-viability contingent capital (NVCC)) in the current quarter, partially offset by a redemption of our Non-Cumulative 5-year Rate Reset Class B Preferred Shares, Series 31 (NVCC). Common shares decreased $0.4 billion, due to the repurchase of common shares for cancellation under the NCIB, partially offset by the issuance of common shares under the Amended and Restated Stock Option Plan.
Contractual obligations by year of maturity are outlined in the Contractual Maturities of Assets and Liabilities and Off-Balance Sheet Commitments table in the Risk Management section.
| BMO Financial Group Third Quarter Report 2025 17 |
|---|
Capital Management
BMO continues to manage its capital within the framework described in the Enterprise-Wide Capital Management section of BMO’s 2024 Annual Report.
Third Quarter 2025 Regulatory Capital Review
BMO’s Common Equity Tier 1 (CET1) Ratio was 13.5% as at July 31, 2025, relatively unchanged from the second quarter of 2025, as internal capital generation was offset by the impact of the purchase of common shares for cancellation under BMO’s normal course issuer bid (NCIB) and higher source currency risk-weighted assets (RWA).
CET1 Capital was $57.9 billion as at July 31, 2025, an increase from $57.4 billion as at April 30, 2025, with internal capital generation, unrealized gains on securities fair valued through other comprehensive income and the impact of foreign exchange movements, partially offset by the impact of the shares purchased under the NCIB.
RWA were $430.1 billion as at July 31, 2025, an increase from $425.1 billion as at April 30, 2025. RWA increased due to higher credit risk, higher operational risk and the impact of foreign exchange movements, partially offset by lower market risk. The increase in credit risk primarily reflects changes in asset quality, partially offset by a decrease in asset size.
In calculating regulatory capital ratios, total RWA must be increased when a capital floor amount calculated under the standardized approaches, multiplied by a capital floor adjustment factor, is higher than a similar calculation using more risk-sensitive internal modelled approaches, where applicable. The capital floor was not operative as at July 31, 2025, unchanged from April 30, 2025.
The bank’s Tier 1 and Total Capital Ratios were 15.5% and 17.8%, respectively, as at July 31, 2025, compared with 15.3% and 17.9%, respectively, as at April 30, 2025. The Tier 1 Capital Ratio was higher, due to the same factors noted above for the CET1 Ratio and the issuance of US$1,000 million Limited Recourse Capital Notes, Series 6 (non-viability contingent capital (NVCC)), partially offset by the announced $200 million preferred share Series 33 (NVCC) redemption. The Total Capital Ratio was lower, as it was also impacted by the redemption of $1,250 million of subordinated notes (NVCC).
BMO’s investments in foreign operations are primarily denominated in U.S. dollars, and the foreign exchange impact of U.S. dollar-denominated RWA and capital deductions may result in variability in the bank’s capital ratios. We manage the impact of foreign exchange movements on RWA and capital deductions on our capital ratios, and during the current quarter, this impact was largely offset.
Our Leverage Ratio was 4.5% as at July 31, 2025, an increase from 4.4% at the end of the second quarter of 2025, driven by higher Tier 1 Capital.
The bank’s risk-based Total Loss Absorbing Capacity (TLAC) Ratio and TLAC Leverage Ratio were 29.5% and 8.5%, respectively, as at July 31, 2025, compared with 29.9% and 8.5%, respectively, as at April 30, 2025.
Regulatory Capital Developments
On June 26, 2025, the Office of the Superintendent of Financial Institutions (OSFI) announced that the Domestic Stability Buffer (DSB) will remain at 3.5%.
On February 12, 2025, OSFI announced the deferral of increases to the capital floor adjustment factor, currently at 67.5%, until further notice. Banks will be notified at least two years prior to any increases in the capital floor adjustment factor being resumed.
For a discussion on other regulatory developments, refer to the Enterprise-Wide Capital Management section of BMO’s 2024 Annual Report.
Regulatory Capital, Leverage and Total Loss Absorbing Capacity
Regulatory capital requirements for BMO are determined in accordance with guidelines issued by OSFI, which are based on the Basel III framework developed by the Basel Committee on Banking Supervision (BCBS), and include OSFI’s CAR Guideline and the Leverage Requirements (LR) Guideline. TLAC requirements are determined in accordance with OSFI’s TLAC Guideline. For more information, refer to the Enterprise-Wide Capital Management section of BMO’s 2024 Annual Report.
OSFI’s capital, leverage and TLAC requirements are summarized in the following table.
| TABLE 11 | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (% of risk-weighted assets or leverage exposures) | Minimum capital,<br>leverage and TLAC<br>requirements | Total Pillar 1 Capital<br>buffer (1) | Tier 1 Capital<br><br><br>buffer (2) | Domestic stability<br>buffer^^(3) | Minimum capital,<br>leverage and TLAC<br>requirements including<br>capital buffers | BMO capital, leverage<br>and TLAC ratios as at<br>July 31, 2025 | ||||||
| Common Equity Tier 1 Ratio | 4.5% | 3.5% | na | 3.5% | 11.5% | 13.5% | ||||||
| Tier 1 Capital Ratio | 6.0% | 3.5% | na | 3.5% | 13.0% | 15.5% | ||||||
| Total Capital Ratio | 8.0% | 3.5% | na | 3.5% | 15.0% | 17.8% | ||||||
| TLAC Ratio | 21.5% | na | na | 3.5% | 25.0% | 29.5% | ||||||
| Leverage Ratio | 3.0% | na | 0.5% | na | 3.5% | 4.5% | ||||||
| TLAC Leverage Ratio | 6.75% | na | 0.5% | na | 7.25% | 8.5% | ||||||
| (1) | The minimum CET1 Ratio requirement of 4.5% is augmented by the 3.5% Total Pillar 1 Capital buffers, which can absorb<br>losses during periods of stress. Pillar 1 Capital buffers, which will be met with CET1 Capital, include a capital conservation buffer of 2.5%, a Common Equity Tier 1 surcharge for domestic systemically important banks<br>(D-SIBs) of 1.0% and a countercyclical buffer, as prescribed by OSFI (immaterial for the quarter). If a bank’s capital ratios fall within the range of this combined buffer, restrictions on discretionary<br>distributions of earnings (such as dividends, share repurchases and discretionary compensation) would ensue, with the degree of such restrictions varying according to the position of the bank’s ratios within the buffer range.<br> | |||||||||||
| --- | --- | |||||||||||
| (2) | D-SIBs are required to meet a 0.5% Tier 1 Capital buffer requirement for the<br>Leverage and TLAC Leverage Ratios. | |||||||||||
| --- | --- | |||||||||||
| (3) | OSFI requires all D-SIBs to hold a DSB against Pillar 2 risks associated with<br>systemic vulnerabilities. Breaches of the DSB do not result in a bank being subject to automatic constraints on capital distributions. In the event of a breach, OSFI would require a remediation plan, and would expect for the plan to be executed in a<br>timely manner. Banks may be required to hold additional buffers that are applicable to capital, leverage and TLAC ratios. | |||||||||||
| --- | --- |
na – not applicable
| 18 BMO Financial Group Third Quarter Report 2025 |
|---|
Regulatory Capital and TLAC Position
| TABLE 12 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| (Canadian $ in millions, except as noted) | Q3-2025 | Q2-2025 | Q3-2024 | ||||||
| Gross common equity (1) | **** | 77,567 | **** | 78,008 | 74,439 | ||||
| Regulatory adjustments applied to common equity | **** | (19,643 | ) | (20,603 | ) | (18,834 | ) | ||
| Common Equity Tier 1 Capital (CET1) | **** | 57,924 | **** | 57,405 | 55,605 | ||||
| Additional Tier 1 Eligible Capital (2) | **** | 8,956 | **** | 7,787 | 8,087 | ||||
| Regulatory adjustments applied to Tier 1 Capital | **** | (160 | ) | (85 | ) | (94 | ) | ||
| Additional Tier 1 Capital (AT1) | **** | 8,796 | **** | 7,702 | 7,993 | ||||
| Tier 1 Capital (T1 = CET1 + AT1) | **** | 66,720 | **** | 65,107 | 63,598 | ||||
| Tier 2 Eligible Capital (3) | **** | 9,744 | **** | 10,880 | 9,994 | ||||
| Regulatory adjustments applied to Tier 2 Capital | **** | (11 | ) | (6 | ) | (62 | ) | ||
| Tier 2 Capital (T2) | **** | 9,733 | **** | 10,874 | 9,932 | ||||
| Total Capital (TC = T1 + T2) | **** | 76,453 | **** | 75,981 | 73,530 | ||||
| Other TLAC instruments (4) | **** | 50,427 | **** | 51,424 | 48,650 | ||||
| Adjustments applied to Other TLAC | **** | (71 | ) | (140 | ) | (127 | ) | ||
| Other TLAC available after adjustments | **** | 50,356 | **** | 51,284 | 48,523 | ||||
| TLAC | **** | 126,809 | **** | 127,265 | 122,053 | ||||
| Risk-Weighted Assets (5) | **** | 430,134 | **** | 425,066 | 428,860 | ||||
| Leverage Ratio Exposures | **** | 1,489,621 | **** | 1,490,551 | 1,480,736 | ||||
| Capital, Leverage and TLAC Ratios (%) | |||||||||
| CET1 Ratio | **** | 13.5 | **** | 13.5 | 13.0 | ||||
| Tier 1 Capital Ratio | **** | 15.5 | **** | 15.3 | 14.8 | ||||
| Total Capital Ratio | **** | 17.8 | **** | 17.9 | 17.1 | ||||
| TLAC Ratio | **** | 29.5 | **** | 29.9 | 28.5 | ||||
| Leverage Ratio | **** | 4.5 | **** | 4.4 | 4.3 | ||||
| TLAC Leverage Ratio | **** | 8.5 | **** | 8.5 | 8.2 | ||||
| (1) | Gross Common Equity includes issued qualifying common shares, retained earnings, accumulated other comprehensive income<br>and eligible common share capital issued by subsidiaries. | ||||||||
| --- | --- | ||||||||
| (2) | Additional Tier 1 Eligible Capital includes directly and indirectly issued qualifying Additional Tier 1 instruments.<br> | ||||||||
| --- | --- | ||||||||
| (3) | Tier 2 Eligible Capital includes subordinated debentures and may include portion of expected credit loss provisions.<br> | ||||||||
| --- | --- | ||||||||
| (4) | Other TLAC includes senior unsecured debt subject to the Canadian Bail-In Regime.<br> | ||||||||
| --- | --- | ||||||||
| (5) | Institutions using one of the internal model-based approaches for credit risk, counterparty credit risk, or market risk<br>are subject to a capital floor requirement that is applied to RWA, as prescribed in OSFI’s CAR Guideline. | ||||||||
| --- | --- |
Outstanding Shares and Securities Convertible into Common Shares ^(1)^ ****
| TABLE 13 | ||||
|---|---|---|---|---|
| As at July 31, 2025 | Number of<br>shares | Amount<br> (in millions) | ||
| Common shares | 716,306,770 | $23,554 | ||
| Class B Preferred shares (2) | ||||
| Series 33 | 8,000,000 | $200 | ||
| Series 44 | 16,000,000 | $400 | ||
| Series 50 | 500,000 | $500 | ||
| Series 52 | 650,000 | $650 | ||
| Other Equity Instruments (2) | ||||
| 4.800% Additional Tier 1 Capital Notes (3) | US$500 | |||
| 4.300% Limited Recourse Capital Notes, Series 1 (LRCNs) | $1,250 | |||
| 5.625% Limited Recourse Capital Notes, Series 2 (LRCNs) | $750 | |||
| 7.325% Limited Recourse Capital Notes, Series 3 (LRCNs) | $1,000 | |||
| 7.700% Limited Recourse Capital Notes, Series 4 (LRCNs) | US$1,000 | |||
| 7.300% Limited Recourse Capital Notes, Series 5 (LRCNs) | US$750 | |||
| 6.875% Limited Recourse Capital Notes, Series 6 (LRCNs) | US$1,000 | |||
| Medium-Term Notes | ||||
| 3.803% Subordinated Notes due 2032 | US$1,250 | |||
| Series K - First Tranche | $1,000 | |||
| 3.088% Subordinated Notes due 2037 | US$1,250 | |||
| Series L - First Tranche | $750 | |||
| Series M - First Tranche | $1,150 | |||
| Series M - Second Tranche | $1,000 | |||
| Series N - First Tranche | $1,250 | |||
| Stock options | ||||
| Vested | 2,791,106 | |||
| Non-vested | 3,481,506 | |||
| (1) | Details on the Medium-Term Notes are outlined in Note 16 of the audited consolidated financial statements of BMO’s<br>2024 Annual Report. Details on share capital and other equity instruments are outlined in Note 6 of the unaudited interim consolidated financial statements and Note 17 of the audited annual consolidated financial statements of<br>BMO’s 2024 Annual Report. | |||
| --- | --- | |||
| (2) | Convertible into common shares. For LRCNs, convertible into common shares by virtue of the recourse to the Preferred<br>Shares Series 48, Preferred Shares Series 49, Preferred Shares Series 51, Preferred Shares 53, Preferred Shares 54, and Preferred Shares 55 for Series 1, Series 2, Series 3, Series 4, Series 5, and Series 6 LRCNs, respectively, issued concurrently<br>with the LRCNs, which currently comprise the limited recourse trust assets. | |||
| --- | --- | |||
| (3) | The notes had an initial interest rate of 4.800% and reset on August 25, 2024 to 6.709%. | |||
| --- | --- |
If a NVCC trigger event were to occur, our NVCC instruments would be converted into BMO common shares pursuant to automatic conversion formulas, with a conversion price based on the greater of: (i) a floor price of $5.00; and (ii) the current market price of our common shares at the time of the trigger event (calculated using a 10-day weighted average). Based on a floor price of $5.00, these NVCC capital instruments would be converted into approximately 4.7 billion BMO common shares, assuming no accrued interest and no declared and unpaid dividends.
| BMO Financial Group Third Quarter Report 2025 19 |
|---|
Other Capital Developments
On August 25, 2025, we redeemed all of our outstanding 8 million Non-Cumulative 5-year Rate Reset Class B Preferred Shares, Series 33 (NVCC) for an aggregate total of $200 million.
On July 29, 2025, we issued US$1,000 million 6.875% Limited Recourse Capital Notes, Series 6 (NVCC). This issuance is classified as equity and forms part of our Additional Tier 1 Capital.
On June 17, 2025, we redeemed all of our outstanding $1,250 million 2.077% Series J Medium-Term Notes Second Tranche (NVCC) at par, plus accrued and unpaid interest to, but excluding, the redemption date.
On March 5, 2025, we issued $1,250 million 4.077% Series N Medium-Term Notes First Tranche (NVCC) through our Canadian Medium-Term Note Program.
On January 17, 2025, we announced a NCIB to purchase up to 20 million of our common shares for cancellation commencing on January 22, 2025, and ending no later than January 21, 2026. The timing and amount of purchases under the NCIB are determined by management, based on factors such as market conditions and capital levels. We also established an automatic securities purchase plan related to the NCIB under which our broker may purchase our common shares pursuant to the NCIB within a defined set of criteria. During the three months ended July 31, 2025, we purchased for cancellation 6 million common shares under the NCIB, at an average price of $146.11 per share for a total amount of $894 million, including tax. During the nine months ended July 31, 2025, we purchased for cancellation 14.2 million common shares under the NCIB, at an average price of $141.74 per share for a total amount of $2,051 million, including tax. In addition, we have purchased for cancellation 1.5 million shares between August 1, 2025 and August 22, 2025. On August 26, 2025, we announced our intention to terminate our existing NCIB and establish a new NCIB to purchase up to 30 million of our common shares for cancellation, subject to the approval of OSFI and the Toronto Stock Exchange. NCIB’s are part of our regular capital management strategy.
On November 25, 2024, we redeemed all of our outstanding 12 million Non-Cumulative 5-year Rate Reset Class B Preferred Shares, Series 31 (NVCC) for an aggregate total of $300 million.
Dividends
On August 26, 2025, BMO announced that the Board of Directors had declared a quarterly dividend on common shares of $1.63 per share, unchanged from the prior quarter and a $0.08 increase from the prior year. The dividend is payable on November 26, 2025 to shareholders of record on October 30, 2025. Common shareholders may elect to have their cash dividends reinvested in common shares of BMO, in accordance with the Shareholder Dividend Reinvestment and Share Purchase Plan (DRIP).
Common shares under the DRIP are purchased on the open market without a discount.
For the purposes of the Income Tax Act (Canada) and any similar provincial and territorial legislation, BMO designates all dividends paid or deemed to be paid on both its common and preferred shares as “eligible dividends”, unless indicated otherwise.
Caution
This Capital Management section contains forward-looking statements. Please refer to the Caution Regarding Forward-Looking Statements.
| 20 BMO Financial Group Third Quarter Report 2025 |
|---|
Review of Operating Groups’ Performance
How BMO Reports Operating Group Results
BMO reports financial results for its three operating groups, one of which comprises two operating segments, all of which are supported by Corporate Units and Technology and Operations (T&O) within Corporate Services. Operating segment results include allocations from Corporate Services for treasury-related revenue, corporate and T&O costs, and capital.
BMO employs funds transfer pricing and liquidity transfer pricing between corporate treasury and the operating segments in order to assign cost or credit on assets and liabilities to facilitate effective pricing and business decision-making, and to help assess the profitability performance of each line of business. These practices also capture the cost of holding supplemental liquid assets to meet contingent liquidity requirements, as well as facilitating the management of interest rate and liquidity risk within our risk appetite framework and regulatory requirements. We review our transfer pricing methodologies at least annually in order to align with our interest rate, liquidity and funding risk management practices, and update these as appropriate.
The costs of Corporate Units and T&O services are largely allocated to the four operating segments, with any remaining amounts retained in Corporate Services. Certain expenses directly incurred to support a specific operating segment are generally allocated to that operating segment. Other expenses are generally allocated across the operating segments in amounts that are reasonably reflective of the level of support provided to each operating segment. We review our expense allocation methodologies at least annually and update these as appropriate.
Periodically, certain lines of business and units within our organizational structure are realigned within an operating segment or transferred between operating segments and Corporate Services to support our strategic priorities. Allocations of revenue, expenses, provisions for income taxes and capital from Corporate Services to the operating groups are updated to better align with these changes.
On June 5, 2025, we announced organizational changes to our U.S. structure, combining our U.S. Personal and Business Banking, Commercial Banking, and Wealth Management businesses. Beginning in the fourth quarter of 2025, operating segment results will be realigned, and financial results related to our U.S. Wealth Management business currently reported in BMO Wealth Management will be reported in U.S. Personal and Commercial Banking. Prior period comparatives will be reclassified.
Capital is allocated to the operating segments based on the amount of regulatory capital required to support business activities. Effective the first quarter of fiscal 2025, the capital allocation rate increased to 12.0% of risk-weighted assets, compared with 11.5% in fiscal 2024. Unallocated capital is reported in Corporate Services. We review our capital allocation methodologies at least annually and update these as appropriate.
We analyze revenue at the consolidated level based on GAAP revenue as reported in the audited annual consolidated financial statements, rather than on a taxable equivalent basis (teb), which is consistent with our Canadian banking peer group. Like many banks, BMO analyzes revenue on a teb basis at the operating segment level. Net interest income, total revenue and the provision for income taxes in BMO Capital Markets and U.S. P&C are increased on tax-exempt securities to equivalent pre-tax amounts in order to facilitate comparisons of income from taxable and tax-exempt sources, and are reflected in the ratios. The offset to the segment teb adjustments is reflected in Corporate Services net interest income, total revenue and provision for (recovery of) income taxes. In fiscal 2024, the Canadian government enacted legislation that, under certain circumstances, denies deductions for dividends that are received after 2023. As a result, beginning January 1, 2024, we did not take the deduction for certain Canadian dividends received by BMO Capital Markets, and we no longer report this revenue on a taxable equivalent basis. Refer to the Other Regulatory Developments section in BMO’s 2024 Annual Report for further details.
Caution
This How BMO Reports Operating Group Results section contains forward-looking statements. Please refer to the Caution Regarding Forward-Looking Statements.
Personal and Commercial Banking(P&C)^(1)^ ****
| TABLE 14 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| (Canadian $ in millions, except as noted) | Q3-2025 | Q2-2025 | Q3-2024 | YTD-2025 | YTD-2024 | ||||||
| Net interest income (teb) (2) | **** | 4,564 | 4,481 | 4,309 | **** | 13,635 | 12,656 | ||||
| Non-interest revenue | **** | 1,075 | 1,021 | 1,052 | **** | 3,247 | 3,145 | ||||
| Total revenue (teb) (2) | **** | 5,639 | 5,502 | 5,361 | **** | 16,882 | 15,801 | ||||
| Provision for credit losses on impaired loans | **** | 729 | 723 | 721 | **** | 2,255 | 1,725 | ||||
| Provision for credit losses on performing loans | **** | 7 | 219 | 61 | **** | 379 | 321 | ||||
| Total provision for credit losses | **** | 736 | 942 | 782 | **** | 2,634 | 2,046 | ||||
| Non-interest expense | **** | 2,798 | 2,795 | 2,752 | **** | 8,421 | 8,085 | ||||
| Income before income taxes | **** | 2,105 | 1,765 | 1,827 | **** | 5,827 | 5,670 | ||||
| Provision for income taxes (teb) (2) | **** | 529 | 437 | 443 | **** | 1,449 | 1,390 | ||||
| Reported net income | **** | 1,576 | 1,328 | 1,384 | **** | 4,378 | 4,280 | ||||
| Dividends on preferred shares and distributions on other equity instruments | **** | 26 | 25 | 24 | **** | 78 | 71 | ||||
| Net income attributable to<br>non-controlling interest in subsidiaries | **** | 2 | 5 | (3 | ) | **** | 7 | 1 | |||
| Net income available to common shareholders | **** | 1,548 | 1,298 | 1,363 | **** | 4,293 | 4,208 | ||||
| Acquisition and integration costs (3) | **** | - | - | 2 | **** | - | 5 | ||||
| Amortization of acquisition-related intangible assets (4) | **** | 63 | 76 | 73 | **** | 212 | 223 | ||||
| Adjusted net income | **** | 1,639 | 1,404 | 1,459 | **** | 4,590 | 4,508 | ||||
| Adjusted net income available to common shareholders | **** | 1,611 | 1,374 | 1,438 | **** | 4,505 | 4,436 | ||||
| (1) | Adjusted results are on a non-GAAP basis and are discussed in the Non-GAAP and Other Financial Measures section. | ||||||||||
| --- | --- | ||||||||||
| (2) | Net interest income, total revenue and the provision for income taxes are presented on a taxable equivalent basis (teb)<br>and are reflected in the ratios. Teb amounts of $8 million in both Q3-2025 and Q2-2025, and $9 million in Q3-2024; and<br>$25 million for YTD-2025 and $27 million for YTD-2024 are offset in Corporate Services. | ||||||||||
| --- | --- | ||||||||||
| (3) | Acquisition and integration costs related to the acquisition of AIR MILES, recorded in<br>non-interest expense. | ||||||||||
| --- | --- | ||||||||||
| (4) | Amortization of acquisition-related intangible assets and any impairments, recorded in non-interest expense.<br> | ||||||||||
| --- | --- | ||||||||||
| BMO Financial Group Third Quarter Report 2025 21 | |||||||||||
| --- |
The Personal and Commercial Banking (P&C) operating group represents the sum of our two retail and commercial operating segments, Canadian Personal and Commercial Banking (Canadian P&C) and U.S. Personal and Commercial Banking (U.S. P&C). The P&C banking business reported net income was $1,576 million, an increase of $192 million or 14% from the prior year, and an increase of $248 million or 19% from the prior quarter. These operating segments are reviewed separately in the sections that follow.
Refer to the Non-GAAP and Other Financial Measures section for further information on non-GAAP amounts, measures and ratios, including adjusting items in this Review of Operating Groups’ Performance section.
Canadian Personal and Commercial Banking (Canadian P&C) ^(1)^****
| TABLE 15 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| (Canadian $ in millions, except as noted) | Q3-2025 | Q2-2025 | Q3-2024 | YTD-2025 | YTD-2024 | ||||||
| Net interest income | **** | 2,459 | 2,359 | 2,253 | **** | 7,203 | 6,548 | ||||
| Non-interest revenue | **** | 639 | 615 | 655 | **** | 1,934 | 1,957 | ||||
| Total revenue | **** | 3,098 | 2,974 | 2,908 | **** | 9,137 | 8,505 | ||||
| Provision for credit losses on impaired loans | **** | 489 | 476 | 353 | **** | 1,456 | 886 | ||||
| Provision for credit losses on performing loans | **** | 76 | 132 | 35 | **** | 259 | 195 | ||||
| Total provision for credit losses (PCL) | **** | 565 | 608 | 388 | **** | 1,715 | 1,081 | ||||
| Non-interest expense | **** | 1,339 | 1,289 | 1,260 | **** | 3,918 | 3,686 | ||||
| Income before income taxes | **** | 1,194 | 1,077 | 1,260 | **** | 3,504 | 3,738 | ||||
| Provision for income taxes | **** | 327 | 295 | 346 | **** | 961 | 1,031 | ||||
| Reported net income | **** | 867 | 782 | 914 | **** | 2,543 | 2,707 | ||||
| Dividends on preferred shares and distributions on other equity<br>instruments | **** | 12 | 11 | 10 | **** | 35 | 31 | ||||
| Net income available to common shareholders | **** | 855 | 771 | 904 | **** | 2,508 | 2,676 | ||||
| Acquisition and integration costs (2) | **** | - | - | 2 | **** | - | 5 | ||||
| Amortization of acquisition-related intangible assets (3) | **** | 3 | 4 | 4 | **** | 10 | 10 | ||||
| Adjusted net income | **** | 870 | 786 | 920 | **** | 2,553 | 2,722 | ||||
| Adjusted net income available to common shareholders | **** | 858 | 775 | 910 | **** | 2,518 | 2,691 | ||||
| Adjusted non-interest<br>expense | **** | 1,335 | 1,284 | 1,252 | **** | 3,905 | 3,665 | ||||
| Key Performance Metrics and Drivers | |||||||||||
| Personal and Business Banking revenue | **** | 2,236 | 2,141 | 2,081 | **** | 6,583 | 6,114 | ||||
| Commercial Banking revenue | **** | 862 | 833 | 827 | **** | 2,554 | 2,391 | ||||
| Return on equity (%) (4) (5) | **** | 20.2 | 18.9 | 22.3 | **** | 20.1 | 22.5 | ||||
| Adjusted return on equity (%) (4) (5) | **** | 20.3 | 19.0 | 22.4 | **** | 20.2 | 22.6 | ||||
| Operating leverage (%) | **** | 0.2 | (0.5 | ) | 5.9 | **** | 1.1 | 3.2 | |||
| Adjusted operating leverage (%) | **** | 0.0 | (0.8 | ) | 5.6 | **** | 0.9 | 3.3 | |||
| Efficiency ratio (%) | **** | 43.2 | 43.3 | 43.3 | **** | 42.9 | 43.3 | ||||
| Adjusted efficiency ratio (%) | **** | 43.1 | 43.2 | 43.1 | **** | 42.7 | 43.1 | ||||
| PCL on impaired loans to average net loans and acceptances (%) (5) | **** | 0.57 | 0.58 | 0.43 | **** | 0.58 | 0.37 | ||||
| Net interest margin on average earning assets (%) | **** | 2.84 | 2.83 | 2.77 | **** | 2.82 | 2.78 | ||||
| Average earning assets | **** | 343,805 | 341,885 | 323,485 | **** | 341,670 | 314,451 | ||||
| Average gross loans and acceptances | **** | 342,077 | 340,175 | 326,043 | **** | 339,952 | 321,099 | ||||
| Average deposits | **** | 310,564 | 310,646 | 306,409 | **** | 311,732 | 297,519 | ||||
| (1) | Adjusted results and ratios are on a non-GAAP basis and are discussed in the Non-GAAP and Other Financial Measures section. | ||||||||||
| --- | --- | ||||||||||
| (2) | Acquisition and integration costs related to the acquisition of AIR MILES, recorded in<br>non-interest expense. | ||||||||||
| --- | --- | ||||||||||
| (3) | Amortization of acquisition-related intangible assets and any impairments, recorded in non-interest expense.<br> | ||||||||||
| --- | --- | ||||||||||
| (4) | Return on equity is based on allocated capital. Effective the first quarter of fiscal 2025, the capital allocation rate<br>increased to 12.0% of risk weighted assets, compared with 11.5% in fiscal 2024. For further information, refer to the Non-GAAP and Other Financial Measures section. | ||||||||||
| --- | --- | ||||||||||
| (5) | Return on equity and PCL ratios are presented on an annualized basis. | ||||||||||
| --- | --- |
Certain comparative figures have been reclassified to conform with the current period’s presentation.
Q3 2025 vs. Q3 2024
Canadian P&C reported net income was $867 million, a decrease of $47 million or 5% from the prior year.
Total revenue was $3,098 million, an increase of $190 million or 6% from the prior year. Net interest income increased $206 million or 9%, primarily due to higher balances and net interest margin. Non-interest revenue decreased $16 million or 2%, primarily due to lower card-related revenue and lower lending fee revenue. Net interest margin of 2.84% increased 7 basis points from the prior year, primarily due to higher deposit and loan margins, partially offset by loans growing faster than deposits.
Personal and Business Banking revenue increased $155 million or 7% and Commercial Banking revenue increased $35 million or 4%, both due to higher net interest income, partially offset by lower non-interest revenue.
Total provision for credit losses was $565 million, an increase of $177 million from the prior year. The provision for credit losses on impaired loans was $489 million, an increase of $136 million, largely due to higher provisions in Canadian unsecured consumer lending and Commercial Banking. There was a $76 million provision for credit losses on performing loans in the current quarter, compared with a $35 million provision in the prior year.
Non-interest expense was $1,339 million, an increase of $79 million or 6% from the prior year, primarily driven by higher technology costs, employee-related expenses and operating costs.
Average gross loans and acceptances increased $16.0 billion or 5% from the prior year to $342.1 billion. Personal and Business Banking loan balances increased 4%, primarily reflecting growth in residential mortgages, Commercial Banking loan balances increased 7%, and credit card balances increased 1%. Average deposits increased $4.2 billion or 1% from the prior year to $310.6 billion, with higher chequing and savings deposits partially offset by lower term deposits. Personal and Business Banking deposits increased 1% and Commercial Banking deposits increased 2%.
| 22 BMO Financial Group Third Quarter Report 2025 |
|---|
Q3 2025 vs. Q2 2025
Reported net income increased $85 million or 11% from the prior quarter.
Total revenue increased $124 million or 4% from the prior quarter. Net interest income increased $100 million or 4%, primarily due to the impact of three additional days in the current quarter and higher balances. Non-interest revenue increased $24 million or 4%, primarily due to higher card-related revenue and higher mutual fund distribution fee revenue. Net interest margin of 2.84% increased 1 basis point from the prior quarter, primarily due to higher deposit margins, partially offset by loans growing faster than deposits.
Personal and Business Banking revenue increased $95 million or 4% and Commercial Banking revenue increased $29 million or 3%, both due to higher net interest income and non-interest revenue.
Total provision for credit losses decreased $43 million from the prior quarter. The provision for credit losses on impaired loans increased $13 million, due to higher provisions in Personal and Business Banking. There was a $76 million provision for credit losses on performing loans in the current quarter, compared with a $132 million provision in the prior quarter.
Non-interest expense was $1,339 million, an increase of $50 million or 4% from the prior quarter, primarily driven by higher operating costs and employee-related expenses.
Average gross loans and acceptances increased $1.9 billion or 1% from the prior quarter. Personal and Business Banking loan balances and Commercial Banking loan balances both increased 1%, and credit card balances decreased 1%. Average deposits were relatively unchanged from the prior quarter with lower term deposits offset by higher chequing and savings deposits.
Q3 YTD 2025 vs. Q3 YTD 2024
Canadian P&C reported net income was $2,543 million, a decrease of $164 million or 6% from the prior year.
Total revenue was $9,137 million, an increase of $632 million or 7% from the prior year. Net interest income increased $655 million or 10%, due to higher balances and net interest margin. Non-interest revenue decreased $23 million or 1%, primarily due to lower lending fee revenue reflecting the impact of the transition of bankers’ acceptances exposures to loans, which was offset in net interest income, as well as lower card-related revenue, partially offset by higher deposit and mutual fund distribution fee revenue. Net interest margin of 2.82% increased 4 basis points from the prior year, due to higher loan and deposit margins, partially offset by loans growing faster than deposits.
Personal and Business Banking revenue increased $469 million or 8%, due to higher net interest income and higher non-interest revenue. Commercial Banking revenue increased $163 million or 7%, due to higher net interest income, partially offset by lower non-interest revenue.
Total provision for credit losses was $1,715 million, an increase of $634 million from the prior year. The provision for credit losses on impaired loans was $1,456 million, an increase of $570 million, reflecting higher provisions in both Commercial Banking and Personal and Business Banking, driven by unsecured segments of the consumer portfolio. There was a $259 million provision for credit losses on performing loans in the current year, compared with a $195 million provision in the prior year.
Non-interest expense was $3,918 million, an increase of $232 million or 6% from the prior year, driven by higher technology costs, employee-related expenses and operating costs.
Average gross loans and acceptances increased $18.9 billion or 6% from the prior year. Personal and Business Banking loan balances increased 5%, Commercial Banking loan balances increased 7% and credit card balances increased 6%. Average deposits increased $14.2 billion or 5% from the prior year. Personal and Business Banking deposits increased 4% and Commercial Banking deposits increased 6%.
Refer to the Non-GAAP and Other Financial Measures section for further information on non-GAAP amounts, measures and ratios, including adjusting items in this Review of Operating Groups’ Performance section.
| BMO Financial Group Third Quarter Report 2025 23 |
|---|
U.S. Personal and Commercial Banking (U.S. P&C)^(1)^ ****
| TABLE 16 | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Canadian in millions, except as noted) | Q2-2025 | Q3-2024 | YTD-2025 | YTD-2024 | ||||||||
| Net interest income (teb) (2) | 2,105 | **** | 2,122 | 2,056 | **** | 6,432 | 6,108 | |||||
| Non-interest revenue | 436 | **** | 406 | 397 | **** | 1,313 | 1,188 | |||||
| Total revenue (teb) (2) | 2,541 | **** | 2,528 | 2,453 | **** | 7,745 | 7,296 | |||||
| Provision for credit losses on impaired loans | 240 | **** | 247 | 368 | **** | 799 | 839 | |||||
| Provision (recovery of provision) for credit losses on performing<br>loans | (69 | ) | 87 | 26 | **** | 120 | 126 | |||||
| Total provision for credit losses (PCL) | 171 | **** | 334 | 394 | **** | 919 | 965 | |||||
| Non-interest expense | 1,459 | **** | 1,506 | 1,492 | **** | 4,503 | 4,399 | |||||
| Income before income taxes | 911 | **** | 688 | 567 | **** | 2,323 | 1,932 | |||||
| Provision for income taxes (teb) (2) | 202 | **** | 142 | 97 | **** | 488 | 359 | |||||
| Reported net income | 709 | **** | 546 | 470 | **** | 1,835 | 1,573 | |||||
| Dividends on preferred shares and distributions on other equity instruments | 14 | **** | 14 | 14 | **** | 43 | 40 | |||||
| Net income attributable to<br>non-controlling interest in subsidiaries | 2 | **** | 5 | (3 | ) | **** | 7 | 1 | ||||
| Net income available to common shareholders | 693 | **** | 527 | 459 | **** | 1,785 | 1,532 | |||||
| Amortization of acquisition-related intangible assets (3) | 60 | **** | 72 | 69 | **** | 202 | 213 | |||||
| Adjusted net income | 769 | **** | 618 | 539 | **** | 2,037 | 1,786 | |||||
| Adjusted net income available to common shareholders | 753 | **** | 599 | 528 | **** | 1,987 | 1,745 | |||||
| Adjusted non-interest<br>expense | 1,378 | **** | 1,409 | 1,398 | **** | 4,231 | 4,112 | |||||
| Average earning assets | 214,154 | **** | 223,071 | 219,443 | **** | 221,462 | 215,797 | |||||
| Average gross loans and acceptances | 203,890 | **** | 212,146 | 207,420 | **** | 210,604 | 204,711 | |||||
| Average deposits | 221,591 | **** | 231,173 | 224,575 | **** | 231,140 | 220,310 | |||||
| (US equivalent in millions) | ||||||||||||
| Net interest income (teb) (2) | 1,533 | **** | 1,495 | 1,500 | **** | 4,569 | 4,500 | |||||
| Non-interest revenue | 317 | **** | 286 | 289 | **** | 933 | 875 | |||||
| Total revenue (teb) (2) | 1,850 | **** | 1,781 | 1,789 | **** | 5,502 | 5,375 | |||||
| Provision for credit losses on impaired loans | 175 | **** | 175 | 267 | **** | 567 | 615 | |||||
| Provision (recovery of provision) for credit losses on performing<br>loans | (50 | ) | 63 | 19 | **** | 83 | 94 | |||||
| Total provision for credit losses | 125 | **** | 238 | 286 | **** | 650 | 709 | |||||
| Non-interest expense | 1,063 | **** | 1,060 | 1,089 | **** | 3,198 | 3,241 | |||||
| Income before income taxes | 662 | **** | 483 | 414 | **** | 1,654 | 1,425 | |||||
| Provision for income taxes (teb) (2) | 146 | **** | 100 | 70 | **** | 348 | 264 | |||||
| Reported net income | 516 | **** | 383 | 344 | **** | 1,306 | 1,161 | |||||
| Dividends on preferred shares and distributions on other equity instruments | 10 | **** | 10 | 10 | **** | 31 | 29 | |||||
| Net income attributable to<br>non-controlling interest in subsidiaries | 2 | **** | 3 | (2 | ) | **** | 5 | 1 | ||||
| Net income available to common shareholders | 504 | **** | 370 | 336 | **** | 1,270 | 1,131 | |||||
| Amortization of acquisition-related intangible assets (3) | 44 | **** | 50 | 51 | **** | 143 | 158 | |||||
| Adjusted net income | 560 | **** | 433 | 395 | **** | 1,449 | 1,319 | |||||
| Adjusted net income available to common shareholders | 548 | **** | 420 | 387 | **** | 1,413 | 1,289 | |||||
| Adjusted non-interest<br>expense | 1,004 | **** | 992 | 1,020 | **** | 3,005 | 3,029 | |||||
| Key Performance Metrics (US basis) | ||||||||||||
| Personal and Business Banking revenue | 743 | **** | 686 | 697 | **** | 2,144 | 2,105 | |||||
| Commercial Banking revenue | 1,107 | **** | 1,095 | 1,092 | **** | 3,358 | 3,270 | |||||
| Return on equity (%) (4) (5) | 8.0 | **** | 6.1 | 5.5 | **** | 6.8 | 6.2 | |||||
| Adjusted return on equity (%) (4) (5) | 8.7 | **** | 6.9 | 6.3 | **** | 7.5 | 7.0 | |||||
| Operating leverage (%) | 5.8 | **** | 1.4 | 5.2 | **** | 3.7 | (4.0 | ) | ||||
| Adjusted operating leverage (%) | 5.0 | **** | 1.3 | 4.9 | **** | 3.2 | (2.6 | ) | ||||
| Efficiency ratio (%) | 57.4 | **** | 59.5 | 60.8 | **** | 58.1 | 60.3 | |||||
| Adjusted efficiency ratio (%) | 54.2 | **** | 55.7 | 57.0 | **** | 54.6 | 56.3 | |||||
| Net interest margin on average earning assets (%) | 3.90 | **** | 3.90 | 3.73 | **** | 3.88 | 3.78 | |||||
| PCL on impaired loans to average net loans and acceptances (%) (5) | 0.47 | **** | 0.49 | 0.71 | **** | 0.51 | 0.55 | |||||
| Average earning assets | 155,974 | **** | 157,057 | 160,119 | **** | 157,301 | 158,976 | |||||
| Average gross loans and acceptances | 148,499 | **** | 149,364 | 151,347 | **** | 149,589 | 150,814 | |||||
| Average deposits | 161,393 | **** | 162,757 | 163,862 | **** | 164,153 | 162,298 |
All values are in US Dollars.
| (1) | Adjusted results and ratios are on a non-GAAP basis and are discussed in the Non-GAAP and Other Financial Measures section. |
|---|---|
| (2) | Net interest income, total revenue and the provision for income taxes are presented on a taxable equivalent basis (teb)<br>and are reflected in the ratios. Teb amounts of $8 million in both Q3-2025 and Q2-2025, and $9 million in<br>Q3-2024; and $25 million for YTD-2025 and $27 million for YTD-2024 are offset in Corporate Services. On a source<br>currency basis: US$6 million in Q3-2025, Q2-2025 and Q3-2024; and US$18 million for<br>YTD-2025 and US$19 million for YTD-2024. |
| --- | --- |
| (3) | Amortization of acquisition-related intangible assets and any impairments, recorded in non-interest expense. On a source<br>currency basis: US$59 million in Q3-2025, US$68 million in Q2-2025, and US$69 million in Q3-2024; and<br>US$193 million for YTD-2025 and US$212 million for YTD-2024. |
| --- | --- |
| (4) | Return on equity is based on allocated capital. Effective the first quarter of fiscal 2025, the capital allocation rate<br>increased to 12.0% of risk weighted assets, compared with 11.5% in fiscal 2024. For further information, refer to the Non-GAAP and Other Financial Measures section. |
| --- | --- |
| (5) | Return on equity and PCL ratios are presented on an annualized basis. |
| --- | --- |
Certain comparative figures have been reclassified to conform with the current period’s presentation.
| 24 BMO Financial Group Third Quarter Report 2025 |
|---|
Q3 2025 vs. Q3 2024
U.S. P&C reported net income was $709 million, an increase of $239 million or 51% from the prior year. All amounts in the remainder of this section are presented on a U.S. dollar basis.
Reported net income was $516 million, an increase of $172 million or 50% from the prior year.
Total revenue was $1,850 million, an increase of $61 million or 3% from the prior year. Net interest income increased $33 million or 2%, due to higher net interest margin, partially offset by lower deposit and loan balances. Non-interest revenue increased $28 million or 10% from the prior year, primarily due to higher deposit fee revenue. Net interest margin of 3.90% increased 17 basis points, primarily due to higher deposit margins.
Personal and Business Banking revenue increased $46 million or 7%, due to higher net interest income and higher non-interest revenue. Commercial Banking revenue increased $15 million or 1%, due to higher non-interest revenue.
Total provision for credit losses was $125 million, a decrease of $161 million from the prior year. The provision for credit losses on impaired loans was $175 million, a decrease of $92 million, largely due to lower provisions in Commercial Banking. There was a $50 million recovery of credit losses on performing loans in the current quarter, compared with a $19 million provision in the prior year.
Non-interest expense was $1,063 million, a decrease of $26 million or 2% from the prior year, primarily due to lower technology and advertising costs, partially offset by higher employee-related expenses.
Average gross loans and acceptances decreased $2.8 billion or 2% from the prior year to $148.5 billion. Personal and Business Banking loan balances increased 6% and Commercial Banking loan balances decreased 4% driven by capital optimization strategies. Average total deposits decreased $2.5 billion or 2% from the prior year to $161.4 billion. Personal and Business Banking deposits decreased 3%, driven by lower term deposits, and Commercial Banking deposits were relatively unchanged.
Q3 2025 vs. Q2 2025
Reported net income increased $163 million or 30% from the prior quarter. The impact of the weaker U.S. dollar decreased revenue and expenses by 3%, and net income by 5%. All amounts in the remainder of this section are presented on a U.S. dollar basis.
Reported net income increased $133 million or 35% from the prior quarter.
Total revenue increased $69 million or 4% from the prior quarter. Net interest income increased $38 million or 3%, due to the impact of three additional days in the current quarter and higher net interest margin, partially offset by lower balances. Non-interest revenue increased $31 million or 11%, primarily due the impact of a loss on the strategic sale of a non-relationship credit card portfolio in the prior quarter. Net interest margin of 3.90% was unchanged from the prior quarter.
Personal and Business Banking revenue increased $57 million or 8%, due to higher non-interest revenue and net interest income. Commercial Banking revenue increased $12 million or 1%, primarily due to higher net interest income, partially offset by lower non-interest revenue.
Total provision for credit losses decreased $113 million from the prior quarter. The provision for credit losses on impaired loans was unchanged from the prior quarter. There was a $50 million recovery of credit losses on performing loans in the current quarter, compared with a $63 million provision in the prior quarter.
Non-interest expense increased $3 million from the prior quarter.
Average gross loans and acceptances decreased $0.9 billion or 1% from the prior quarter. Commercial Banking loan balances decreased 1%, and Personal and Business Banking loan balances increased 1%. Average total deposits decreased $1.4 billion or 1% from the prior quarter. Personal and Business Banking deposits decreased 3%, driven by lower term deposits, and Commercial Banking deposits increased 1%.
Q3 YTD 2025 vs. Q3 YTD 2024
Reported net income was $1,835 million, an increase of $262 million or 17% from the prior year. The impact of the stronger U.S. dollar increased revenue, expenses and net income by 4%, respectively. All amounts in the remainder of this section are on a U.S. dollar basis.
Reported net income was $1,306 million, an increase of $145 million or 13% from the prior year.
Total revenue was $5,502 million, an increase of $127 million or 2% from the prior year. Net interest income increased $69 million or 2%, primarily due to higher net interest margin and higher deposit balances, partially offset by lower loan balances. Non-interest revenue increased $58 million or 7%, due to higher deposit and lending fee revenue, partially offset by the loss on the sale noted above. Net interest margin of 3.88% increased 10 basis points, primarily due to higher deposit margins and deposits growing faster than loans.
Personal and Business Banking revenue increased $39 million or 2%, due to higher net interest income, partially offset by lower non-interest revenue. Commercial Banking revenue increased $88 million or 3%, primarily due to higher non-interest revenue.
Total provision for credit losses was $650 million, a decrease of $59 million from the prior year. The provision for credit losses on impaired loans was $567 million, a decrease of $48 million, largely due to lower provisions in Commercial Banking. There was a $83 million provision for credit losses on performing loans in the current year, compared with a $94 million provision in the prior year.
Non-interest expense was $3,198 million, a decrease of $43 million or 1% from the prior year, reflecting lower operating costs, partially offset by higher employee-related expenses.
Average gross loans and acceptances decreased $1.2 billion or 1% from the prior year to $149.6 billion. Commercial loan balances decreased 3% and Personal and Business Banking balances increased 6%. Average total deposits increased $1.9 billion or 1% to $164.2 billion. Commercial Banking deposits and Personal and Business Banking deposits both increased 1%.
Refer to the Non-GAAP and Other Financial Measures section for further information on non-GAAP amounts, measures and ratios, including adjusting items in this Review of Operating Groups’ Performance section.
| BMO Financial Group Third Quarter Report 2025 25 |
|---|
BMO Wealth Management ^(1)^ ****
| TABLE 17 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| (Canadian in millions, except as noted) | Q2-2025 | Q3-2024 | YTD-2025 | YTD-2024 | |||||||
| Net interest income | 373 | 369 | 326 | **** | 1,097 | 973 | |||||
| Non-interest revenue | 1,259 | 1,159 | 1,113 | **** | 3,649 | 3,187 | |||||
| Total revenue | 1,632 | 1,528 | 1,439 | **** | 4,746 | 4,160 | |||||
| Provision for credit losses on impaired loans | 2 | 2 | 1 | **** | 5 | 10 | |||||
| Provision (recovery of provision) for credit losses on performing<br>loans | 1 | 6 | (10 | ) | **** | 6 | (13 | ) | |||
| Total provision (recovery of provision) for credit losses (PCL) | 3 | 8 | (9 | ) | **** | 11 | (3 | ) | |||
| Non-interest expense | 1,050 | 1,041 | 969 | **** | 3,186 | 2,944 | |||||
| Income before income taxes | 579 | 479 | 479 | **** | 1,549 | 1,219 | |||||
| Provision for income taxes | 143 | 118 | 117 | **** | 383 | 297 | |||||
| Reported net income | 436 | 361 | 362 | **** | 1,166 | 922 | |||||
| Dividends on preferred shares and distributions on other equity<br>instruments | 2 | 3 | 3 | **** | 7 | 7 | |||||
| Net income available to common shareholders | 434 | 358 | 359 | **** | 1,159 | 915 | |||||
| Acquisition and integration costs (2) | 3 | - | - | 3 | - | ||||||
| Amortization of acquisition-related intangible assets (3) | 2 | 2 | 2 | **** | 6 | 5 | |||||
| Adjusted net income | 441 | 363 | 364 | **** | 1,175 | 927 | |||||
| Adjusted net income available to common shareholders | 439 | 360 | 361 | **** | 1,168 | 920 | |||||
| Adjusted non-interest<br>expense | 1,043 | 1,039 | 966 | **** | 3,174 | 2,937 | |||||
| Key Performance Metrics | |||||||||||
| Wealth and Asset Management reported net income | 341 | 302 | 300 | **** | 929 | 739 | |||||
| Wealth and Asset Management adjusted net income | 346 | 304 | 302 | **** | 938 | 744 | |||||
| Insurance reported net income (loss) | 95 | 59 | 62 | **** | 237 | 183 | |||||
| Return on equity (%) (4) (5) | 34.6 | 28.9 | 29.7 | **** | 30.8 | 25.7 | |||||
| Adjusted return on equity (%) (4) (5) | 35.0 | 29.1 | 29.8 | **** | 31.1 | 25.9 | |||||
| Reported efficiency ratio (%) | 64.4 | 68.1 | 67.3 | **** | 67.1 | 70.8 | |||||
| Adjusted efficiency ratio (%) | 64.0 | 67.9 | 67.1 | **** | 66.9 | 70.6 | |||||
| Operating leverage (%) | 4.9 | 3.5 | (3.4 | ) | **** | 5.9 | 3.4 | ||||
| Adjusted operating leverage (%) | 5.3 | 3.5 | (3.3 | ) | **** | 6.1 | 3.5 | ||||
| PCL on impaired loans to average net loans and acceptances (%) (5) | 0.02 | 0.01 | 0.01 | **** | 0.01 | 0.03 | |||||
| Average assets | 71,145 | 71,033 | 65,428 | **** | 70,725 | 63,877 | |||||
| Average gross loans and acceptances | 46,747 | 46,592 | 43,384 | **** | 46,429 | 42,506 | |||||
| Average deposits | 68,506 | 68,956 | 62,406 | **** | 68,152 | 61,021 | |||||
| Assets under administration (6) | 406,145 | 389,320 | 359,213 | **** | 406,145 | 359,213 | |||||
| Assets under management | 464,182 | 437,911 | 409,627 | **** | 464,182 | 409,627 | |||||
| U.S. Business Select Financial Data (US in millions) | |||||||||||
| Total revenue | 209 | 202 | 196 | **** | 612 | 575 | |||||
| Non-interest expense | 154 | 146 | 137 | **** | 450 | 429 | |||||
| Reported net income | 42 | 38 | 49 | **** | 119 | 114 | |||||
| Adjusted non-interest expense | 152 | 144 | 135 | **** | 444 | 424 | |||||
| Adjusted net income | 43 | 40 | 51 | **** | 123 | 118 | |||||
| Average gross loans and acceptances | 12,140 | 11,804 | 10,712 | **** | 11,767 | 10,474 | |||||
| Average deposits | 11,360 | 11,754 | 11,376 | **** | 11,685 | 11,427 |
All values are in US Dollars.
| (1) | Adjusted results and ratios are on a non-GAAP basis and are discussed in the Non-GAAP and Other Financial Measures section. |
|---|---|
| (2) | Burgundy Asset Management Ltd. pre-tax acquisition and integration costs, recorded<br>in non-interest expense. |
| --- | --- |
| (3) | Amortization of acquisition-related intangible assets and any impairments, recorded in non-interest expense.<br> |
| --- | --- |
| (4) | Return on equity is based on allocated capital. Effective the first quarter of fiscal 2025, the capital allocation rate<br>increased to 12.0% of risk weighted assets, compared with 11.5% in fiscal 2024. For further information, refer to the Non-GAAP and Other Financial Measures section. |
| --- | --- |
| (5) | Return on equity and PCL ratios are presented on an annualized basis. |
| --- | --- |
| (6) | Certain assets under management that are also administered by the bank are included in assets under administration.<br> |
| --- | --- |
Q3 2025 vs. Q3 2024
BMO Wealth Management reported net income was $436 million, an increase of $74 million or 20% from the prior year. Wealth and Asset Management reported net income was $341 million, an increase of $41 million or 14%, and Insurance net income was $95 million, an increase of $33 million or 53%.
Total revenue was $1,632 million, an increase of $193 million or 13% from the prior year. Revenue in Wealth and Asset Management was $1,487 million, an increase of $145 million or 11%, primarily due to the impact of stronger global markets and net sales, as well as strong growth in loan and deposit balances. Insurance revenue was $145 million, an increase of $48 million or 50%, due to a gain on the sale of a non-strategic portfolio of insurance contracts during the quarter.
Total provision for credit losses was $3 million, compared with a $9 million recovery of credit losses in the prior year.
Non-interest expense was $1,050 million, an increase of $81 million or 8%, primarily due to higher employee-related expenses, including higher revenue-based costs.
Assets under management increased $54.6 billion or 13% from the prior year to $464.2 billion, driven by stronger global markets and higher net client assets. Assets under administration increased $46.9 billion or 13% to $406.1 billion, driven by stronger global markets. Average gross loans increased 8% and average deposits increased 10%.
| 26 BMO Financial Group Third Quarter Report 2025 |
|---|
Q3 2025 vs. Q2 2025
Reported net income increased $75 million or 21% from the prior quarter. Wealth and Asset Management reported net income increased $39 million or 13% from the prior quarter, and Insurance net income increased $36 million or 62%.
Total revenue increased $104 million or 7% from the prior quarter. Revenue in Wealth and Asset Management increased $54 million or 4%, primarily due to the impact of three additional days in the current quarter and the impact of stronger global markets, partially offset by the impact of the weaker U.S. dollar. Insurance revenue increased $50 million or 51%, due to the gain on the sale noted above and favourable market movements relative to the prior quarter.
Total provision for credit losses decreased $5 million from the prior quarter.
Non-interest expense increased $9 million or 1%, primarily due to higher employee-related expenses, including higher revenue-based costs, partially offset by the impact of the weaker U.S. dollar.
Assets under management increased $26.3 billion or 6% from the prior quarter and assets under administration increased $16.8 billion or 4%, driven by stronger global markets. Average gross loans were relatively unchanged and average deposits decreased 1%.
Q3 YTD 2025 vs. Q3 YTD 2024
Reported net income was $1,166 million, an increase of $244 million or 26% from the prior year. Wealth and Asset Management reported net income was $929 million, an increase of $190 million or 26%, and Insurance net income was $237 million, an increase of $54 million or 30% from the prior year.
Total revenue was $4,746 million, an increase of $586 million or 14%. Revenue in Wealth and Asset Management was $4,372 million, an increase of $492 million or 13%, primarily due to the impact of stronger global markets and net sales, and strong growth in loan and deposit balances. Insurance revenue was $374 million, an increase of $94 million or 34%, primarily due to the gain on the sale noted above and favourable market movements in the current year.
Total provision for credit losses was $11 million, compared with a $3 million recovery of credit losses in the prior year.
Non-interest expense was $3,186 million, an increase of $242 million or 8%, primarily due to higher employee-related expenses, including higher revenue-based costs, and investment in talent.
Refer to the Non-GAAP and Other Financial Measures section for further information on non-GAAP amounts, measures and ratios, including adjusting items in this Review of Operating Groups’ Performance section.
| BMO Financial Group Third Quarter Report 2025 27 |
|---|
BMO Capital Markets ^(1)^ ****
| TABLE 18 | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Canadian in millions, except as noted) | Q2-2025 | Q3-2024 | YTD-2025 | YTD-2024 | ||||||||
| Net interest income (teb) (2) | 729 | **** | 474 | 479 | **** | 1,902 | 1,342 | |||||
| Non-interest revenue | 1,047 | **** | 1,305 | 1,187 | **** | 3,726 | 3,574 | |||||
| Total revenue (teb) (2) | 1,776 | **** | 1,779 | 1,666 | **** | 5,628 | 4,916 | |||||
| Provision for credit losses on impaired loans | 33 | **** | 28 | 92 | **** | 96 | 164 | |||||
| Provision (recovery of provision) for credit losses on performing<br>loans | 23 | **** | 73 | 36 | **** | 107 | (6 | ) | ||||
| Total provision for credit losses (PCL) | 56 | **** | 101 | 128 | **** | 203 | 158 | |||||
| Non-interest expense | 1,139 | **** | 1,100 | 1,047 | **** | 3,494 | 3,191 | |||||
| Income before income taxes | 581 | **** | 578 | 491 | **** | 1,931 | 1,567 | |||||
| Provision for income taxes (teb) (2) | 143 | **** | 147 | 102 | **** | 475 | 326 | |||||
| Reported net income | 438 | **** | 431 | 389 | **** | 1,456 | 1,241 | |||||
| Dividends on preferred shares and distributions on other equity<br>instruments | 11 | **** | 10 | 9 | **** | 31 | 27 | |||||
| Net income available to common shareholders | 427 | **** | 421 | 380 | **** | 1,425 | 1,214 | |||||
| Acquisition and integration costs (3) | - | **** | - | 1 | **** | - | 13 | |||||
| Amortization of acquisition-related intangible assets (4) | 4 | **** | 3 | 4 | **** | 11 | 14 | |||||
| Adjusted net income | 442 | **** | 434 | 394 | **** | 1,467 | 1,268 | |||||
| Adjusted net income available to common shareholders | 431 | **** | 424 | 385 | **** | 1,436 | 1,241 | |||||
| Adjusted non-interest<br>expense | 1,134 | **** | 1,095 | 1,041 | **** | 3,479 | 3,155 | |||||
| Key Performance Metrics | ||||||||||||
| Global Markets revenue | 1,053 | **** | 1,150 | 1,000 | **** | 3,564 | 2,960 | |||||
| Investment and Corporate Banking revenue | 723 | **** | 629 | 666 | **** | 2,064 | 1,956 | |||||
| Return on equity (%) (5) (6) | 12.5 | **** | 12.4 | 11.4 | **** | 13.9 | 12.3 | |||||
| Adjusted return on equity (%) (5) (6) | 12.6 | **** | 12.5 | 11.6 | **** | 14.0 | 12.6 | |||||
| Operating leverage (teb) (%) | (2.1 | ) | - | 16.4 | **** | 5.0 | 4.8 | |||||
| Adjusted operating leverage (teb) (%) | (2.2 | ) | (0.5 | ) | 16.2 | **** | 4.3 | 5.0 | ||||
| Efficiency ratio (teb) (%) | 64.1 | **** | 61.9 | 62.9 | **** | 62.1 | 64.9 | |||||
| Adjusted efficiency ratio (teb) (%) | 63.8 | **** | 61.6 | 62.5 | **** | 61.8 | 64.2 | |||||
| PCL on impaired loans to average net loans and acceptances (%) (6) | 0.16 | **** | 0.13 | 0.44 | **** | 0.15 | 0.26 | |||||
| Average assets | 514,826 | **** | 564,034 | 475,893 | **** | 552,471 | 456,676 | |||||
| Average gross loans and acceptances | 82,668 | **** | 82,193 | 84,573 | **** | 83,830 | 83,235 | |||||
| U.S. Business Select Financial Data (US in millions) | ||||||||||||
| Total revenue (teb) | 641 | **** | 600 | 552 | **** | 2,019 | 1,719 | |||||
| Non-interest expense | 422 | **** | 382 | 398 | **** | 1,245 | 1,205 | |||||
| Reported net income | 151 | **** | 118 | 55 | **** | 510 | 307 | |||||
| Adjusted non-interest expense | 419 | **** | 379 | 396 | **** | 1,237 | 1,189 | |||||
| Adjusted net income | 153 | **** | 120 | 57 | **** | 516 | 319 | |||||
| Average assets | 181,423 | **** | 200,885 | 160,561 | **** | 194,443 | 150,510 | |||||
| Average gross loans and acceptances | 32,582 | **** | 30,898 | 32,189 | **** | 31,758 | 31,823 |
All values are in US Dollars.
| (1) | Adjusted results and ratios are on a non-GAAP basis and are discussed in the Non-GAAP and Other Financial Measures section. |
|---|---|
| (2) | Net interest income, total revenue and the provision for income taxes are presented on a taxable equivalent basis (teb)<br>and are reflected in the ratios. Teb amounts of $2 million in both Q3-2025 and Q2-2025, a $1 million recovery in<br>Q3-2024; and $4 million for YTD-2025 and $20 million for YTD-2024 are offset in Corporate Services. Beginning<br>January 1, 2024, we treated certain Canadian dividends as non-deductible for tax purposes, due to legislation that was enacted in the third quarter of fiscal 2024. As a result, we no longer report this<br>revenue on a taxable equivalent basis. For further information, refer to the Other Regulatory Developments section of BMO’s 2024 Annual MD&A. |
| --- | --- |
| (3) | Clearpool and Radicle pre-tax acquisition and integration costs, recorded in non-interest expense. |
| --- | --- |
| (4) | Amortization of acquisition-related intangible assets and any impairments, recorded in non-interest expense.<br> |
| --- | --- |
| (5) | Return on equity is based on allocated capital. Effective the first quarter of fiscal 2025, the capital allocation rate<br>increased to 12.0% of risk weighted assets, compared with 11.5% in fiscal 2024. For further information, refer to the Non-GAAP and Other Financial Measures section. |
| --- | --- |
| (6) | Return on equity and PCL ratios are presented on an annualized basis. |
| --- | --- |
Q3 2025 vs. Q3 2024
BMO Capital Markets reported net income was $438 million, an increase of $49 million or 13% from the prior year.
Total revenue was $1,776 million, an increase of $110 million or 7% from the prior year. Global Markets revenue increased $53 million or 5%, reflecting higher debt and equity issuances and higher trading revenue. Investment and Corporate Banking revenue increased $57 million or 9%, primarily due to higher underwriting and advisory fee revenue.
Total provision for credit losses was $56 million, a decrease of $72 million from the prior year. The provision for credit losses on impaired loans was $33 million, a decrease of $59 million. There was a $23 million provision for credit losses on performing loans, compared with a $36 million provision in the prior year.
Non-interest expense was $1,139 million, an increase of $92 million or 9% from the prior year, primarily driven by higher employee-related expenses, including performance-based compensation.
Average gross loans and acceptances of $82.7 billion decreased $1.9 billion or 2% from the prior year.
| 28 BMO Financial Group Third Quarter Report 2025 |
|---|
Q3 2025 vs. Q2 2025
Reported net income increased $7 million or 2% from the prior quarter.
Total revenue was relatively unchanged from the prior quarter. Global Markets revenue decreased $97 million or 8%, reflecting lower trading revenue and the impact of the weaker U.S. dollar, partially offset by higher equity issuances and fee revenue. Investment and Corporate Banking revenue increased $94 million or 15%, primarily due to lower markdowns on fair value loans and higher net gains on investments, compared with the prior quarter and higher advisory fee revenue, partially offset by the impact of the weaker U.S. dollar.
Total provision for credit losses decreased $45 million from the prior quarter. The provision for credit losses on impaired loans was $33 million, an increase of $5 million. There was a $23 million provision for credit losses on performing loans, compared with a $73 million provision in the prior quarter.
Non-interest expense increased $39 million or 3% from the prior quarter, driven by higher employee-related expenses, including performance-based compensation, partially offset by the impact of the weaker U.S. dollar.
Average gross loans and acceptances increased $0.5 billion or 1% from the prior quarter.
Q3 YTD 2025 vs. Q3 YTD 2024
BMO Capital Markets reported net income was $1,456 million, an increase of $215 million or 17% from the prior year.
Total revenue was $5,628 million, an increase of $712 million or 14% from the prior year. Global Markets revenue increased $604 million or 20%, reflecting higher trading revenue across all products and the impact of the stronger U.S. dollar. Investment and Corporate Banking revenue increased $108 million or 5% from the prior year, reflecting higher underwriting and advisory fee revenue, higher corporate banking revenue and the impact of the stronger U.S. dollar, partially offset by higher markdowns on fair value loans and lower net gains on investments.
Total provision for credit losses was $203 million, an increase of $45 million from the prior year. The provision for credit losses on impaired loans was $96 million, a decrease of $68 million from the prior year. There was a provision of $107 million for credit losses on performing loans, compared with a $6 million recovery in the prior year.
Non-interest expense was $3,494 million, an increase of $303 million or 9% from the prior year, driven by higher performance-based compensation, higher technology costs and the impact of the stronger U.S. dollar.
Average gross loans and acceptances of $83.8 billion increased $0.6 billion or 1% from the prior year.
Refer to the Non-GAAP and Other Financial Measures section for further information on non-GAAP amounts, measures and ratios, including adjusting items in this Review of Operating Groups’ Performance section.
| BMO Financial Group Third Quarter Report 2025 29 |
|---|
Corporate Services ^(1)^ ****
| TABLE 19 | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Canadian in millions, except as noted) | Q2-2025 | Q3-2024 | YTD-2025 | YTD-2024 | ||||||||||
| Net interest income before group teb offset | (160 | ) | (217 | ) | (312 | ) | **** | (614 | ) | (894 | ) | |||
| Group teb offset | (10 | ) | (10 | ) | (8 | ) | **** | (29 | ) | (47 | ) | |||
| Net interest income (teb) | (170 | ) | (227 | ) | (320 | ) | **** | (643 | ) | (941 | ) | |||
| Non-interest revenue | 111 | **** | 97 | 46 | **** | 320 | **** | (98 | ) | |||||
| Total revenue (teb) | (59 | ) | (130 | ) | (274 | ) | **** | (323 | ) | (1,039 | ) | |||
| Provision for credit losses on impaired loans | 9 | **** | 12 | 14 | **** | 41 | **** | 60 | ||||||
| Provision (recovery of provision) for credit losses on performing<br>loans | (7 | ) | (9 | ) | (9 | ) | **** | (27 | ) | (23 | ) | |||
| Total provision for credit losses | 2 | **** | 3 | 5 | **** | 14 | **** | 37 | ||||||
| Non-interest expense | 118 | **** | 83 | 71 | **** | 450 | **** | 852 | ||||||
| Loss before income taxes | (179 | ) | (216 | ) | (350 | ) | **** | (787 | ) | (1,928 | ) | |||
| Recovery of income taxes (teb) | (59 | ) | (58 | ) | (80 | ) | **** | (217 | ) | (508 | ) | |||
| Reported net loss | (120 | ) | (158 | ) | (270 | ) | **** | (570 | ) | (1,420 | ) | |||
| Dividends on preferred shares and distributions on other equity instruments | 27 | **** | 104 | 15 | **** | 157 | **** | 129 | ||||||
| Net income (loss) attributable to<br>non-controlling interest in subsidiaries | 1 | **** | (3 | ) | 3 | **** | 2 | **** | 5 | |||||
| Net loss available to common shareholders | (148 | ) | (259 | ) | (288 | ) | **** | (729 | ) | (1,554 | ) | |||
| Acquisition and integration costs/reversal (2) | 1 | **** | (1 | ) | 16 | **** | 7 | **** | 84 | |||||
| Legal provision/reversal (including related interest expense and legal fees) | - | **** | - | 13 | **** | - | **** | 36 | ||||||
| Impact of loan portfolio sale | - | **** | - | - | **** | - | **** | 136 | ||||||
| FDIC special assessment | (4 | ) | 4 | 5 | **** | (5 | ) | 368 | ||||||
| Impact of alignment of accounting policies | - | **** | - | - | **** | 70 | **** | - | ||||||
| Adjusted net loss | (123 | ) | (155 | ) | (236 | ) | **** | (498 | ) | (796 | ) | |||
| Adjusted net loss available to common shareholders | (151 | ) | (256 | ) | (254 | ) | **** | (657 | ) | (930 | ) | |||
| Adjusted total revenue (teb) (3) | (59 | ) | (130 | ) | (260 | ) | **** | (323 | ) | (833 | ) | |||
| Adjusted non-interest<br>expense | 122 | **** | 80 | 40 | **** | 352 | **** | 244 | ||||||
| U.S. Business Select Financial Data (US in millions) | ||||||||||||||
| Total revenue | (12 | ) | 16 | (10 | ) | **** | (15 | ) | (59 | ) | ||||
| Total provision for (recovery of) credit losses | (1 | ) | (2 | ) | 2 | **** | 1 | **** | 5 | |||||
| Non-interest expense | 60 | **** | 57 | 8 | **** | 174 | **** | 483 | ||||||
| Recovery of income taxes (teb) | (23 | ) | (15 | ) | (11 | ) | **** | (70 | ) | (147 | ) | |||
| Reported net loss | (48 | ) | (24 | ) | (9 | ) | **** | (120 | ) | (400 | ) | |||
| Adjusted total revenue | (12 | ) | 16 | - | **** | (15 | ) | 94 | ||||||
| Adjusted non-interest<br>expense | 62 | **** | 55 | (14 | ) | **** | 138 | **** | 36 | |||||
| Adjusted net income (loss) | (50 | ) | (22 | ) | 15 | **** | (94 | ) | 61 |
All values are in US Dollars.
| (1) | Adjusted results are on a non-GAAP basis and are discussed in the Non-GAAP and Other Financial Measures section. |
|---|---|
| (2) | Acquisition and integration costs/reversal related to the acquisition of Bank of the West, recorded in non-interest expense. |
| --- | --- |
| (3) | Group taxable equivalent basis (teb) offset amounts recorded in net interest income, total revenue and provision for<br>(recovery of) income taxes: $10 million in both Q3-2025 and Q2-2025 and $8 million in Q3-2024;<br>and $29 million for YTD-2025 and $47 million for YTD-2024. |
| --- | --- |
Q3 2025 vs. Q3 2024
Corporate Services reported net loss was $120 million, compared with reported net loss of $270 million in the prior year, and adjusted net loss was $123 million, compared with adjusted net loss of $236 million in the prior year.
The lower reported and adjusted net loss was driven by higher treasury-related revenue, partially offset by higher expenses.
Q3 2025 vs. Q2 2025
Reported net loss was $120 million, compared with reported net loss of $158 million in the prior quarter, and adjusted net loss was $123 million, compared with adjusted net loss of $155 million in the prior quarter.
The lower reported and adjusted net loss reflected higher treasury-related revenue, partially offset by higher expenses.
Q3 YTD 2025 vs. Q3 YTD 2024
Reported net loss was $570 million, compared with reported net loss of $1,420 million in the prior year.
The lower reported net loss primarily reflected the impact of the FDIC special assessment and a net accounting loss related to the sale of a portfolio of recreational vehicle loans in the prior year, partially offset by the impact of aligning accounting policies for employee vacation across legal entities in the current year, as well as lower acquisition and integration costs.
Adjusted net loss was $498 million, compared with adjusted net loss of $796 million in the prior year. Adjusted net loss excluded the items noted above, with the decrease driven by higher treasury-related revenue, partially offset by higher expenses, including the impact of the consolidation of certain U.S. retirement benefit plans in the prior year.
Refer to the Non-GAAP and Other Financial Measures section for further information on non-GAAP amounts, measures and ratios, including adjusting items in this Review of Operating Groups’ Performance section.
| 30 BMO Financial Group Third Quarter Report 2025 |
|---|
Summary Quarterly Earnings Trends ^(1)^
| TABLE 20 | |||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Canadian in millions, except as noted) | Q2-2025 | Q1-2025 | Q4-2024 | Q3-2024 | Q2-2024 | Q1-2024 | Q4-2023 | ||||||||||||||||
| Net interest income | 5,496 | **** | 5,097 | 5,398 | 5,438 | 4,794 | 4,515 | 4,721 | 4,941 | ||||||||||||||
| Non-interest revenue | 3,492 | **** | 3,582 | 3,868 | 3,519 | 3,398 | 3,459 | 2,951 | 3,378 | ||||||||||||||
| Revenue | 8,988 | **** | 8,679 | 9,266 | 8,957 | 8,192 | 7,974 | 7,672 | 8,319 | ||||||||||||||
| Provision for credit losses on impaired loans | 773 | **** | 765 | 859 | 1,107 | 828 | 658 | 473 | 408 | ||||||||||||||
| Provision for credit losses on performing loans | 24 | **** | 289 | 152 | 416 | 78 | 47 | 154 | 38 | ||||||||||||||
| Total provision for credit losses | 797 | **** | 1,054 | 1,011 | 1,523 | 906 | 705 | 627 | 446 | ||||||||||||||
| Non-interest expense | 5,105 | **** | 5,019 | 5,427 | 4,427 | 4,839 | 4,844 | 5,389 | 5,679 | ||||||||||||||
| Income before income taxes | 3,086 | **** | 2,606 | 2,828 | 3,007 | 2,447 | 2,425 | 1,656 | 2,194 | ||||||||||||||
| Provision for income taxes | 756 | **** | 644 | 690 | 703 | 582 | 559 | 364 | 484 | ||||||||||||||
| Reported net income (see below) | 2,330 | **** | 1,962 | 2,138 | 2,304 | 1,865 | 1,866 | 1,292 | 1,710 | ||||||||||||||
| Acquisition and integration costs/reversal | 4 | **** | (1 | ) | 7 | 27 | 19 | 26 | 57 | 433 | |||||||||||||
| Amortization of acquisition-related intangible assets | 69 | **** | 81 | 79 | 92 | 79 | 79 | 84 | 88 | ||||||||||||||
| Legal provision/reversal (including related interest expense and legal fees) | - | **** | - | - | (870 | ) | 13 | 12 | 11 | 12 | |||||||||||||
| Impact of loan portfolio sale | - | **** | - | - | - | - | - | 136 | - | ||||||||||||||
| FDIC special assessment | (4 | ) | 4 | (5 | ) | (11 | ) | 5 | 50 | 313 | - | ||||||||||||
| Impact of alignment of accounting policies | - | **** | - | 70 | - | - | - | - | - | ||||||||||||||
| Adjusted net income | 2,399 | **** | 2,046 | 2,289 | 1,542 | 1,981 | 2,033 | 1,893 | 2,243 | ||||||||||||||
| Operating Group Reported Revenue | |||||||||||||||||||||||
| Canadian P&C | 3,098 | **** | 2,974 | 3,065 | 2,934 | 2,908 | 2,819 | 2,778 | 2,796 | ||||||||||||||
| U.S. P&C | 2,541 | **** | 2,528 | 2,676 | 2,468 | 2,453 | 2,389 | 2,454 | 2,488 | ||||||||||||||
| BMO Wealth Management | 1,632 | **** | 1,528 | 1,586 | 1,486 | 1,439 | 1,393 | 1,328 | 1,465 | ||||||||||||||
| BMO Capital Markets | 1,776 | **** | 1,779 | 2,073 | 1,600 | 1,666 | 1,661 | 1,589 | 1,651 | ||||||||||||||
| Corporate Services | (59 | ) | (130 | ) | (134 | ) | 469 | (274 | ) | (288 | ) | (477 | ) | (81 | ) | ||||||||
| Total revenue | 8,988 | **** | 8,679 | 9,266 | 8,957 | 8,192 | 7,974 | 7,672 | 8,319 | ||||||||||||||
| Key Performance Metrics | |||||||||||||||||||||||
| Diluted earnings per share () (2) | 3.14 | **** | 2.50 | 2.83 | 2.94 | 2.48 | 2.36 | 1.73 | 2.19 | ||||||||||||||
| Adjusted diluted earnings per share () | 3.23 | **** | 2.62 | 3.04 | 1.90 | 2.64 | 2.59 | 2.56 | 2.93 | ||||||||||||||
| PCL-to-average net loans and<br>acceptances (annualized) (%) | 0.47 | **** | 0.63 | 0.58 | 0.91 | 0.54 | 0.44 | 0.38 | 0.27 | ||||||||||||||
| Effective tax rate (%) | 24.52 | **** | 24.70 | 24.39 | 23.37 | 23.80 | 23.07 | 21.95 | 22.07 | ||||||||||||||
| Adjusted effective tax rate (%) | 24.54 | **** | 24.73 | 24.52 | 21.71 | 23.89 | 23.27 | 22.43 | 22.95 | ||||||||||||||
| Canadian/U.S. dollar average exchange rate () | 1.3730 | **** | 1.4203 | 1.4303 | 1.3641 | 1.3705 | 1.3625 | 1.3392 | 1.3648 |
All values are in US Dollars.
| (1) | Adjusted results exclude certain items from reported results and are used to calculate our adjusted measures as presented<br>in the table above. Management assesses performance on a reported basis and an adjusted basis, and considers both to be useful. For further information on adjusting items, refer to the Non-GAAP and Other<br>Financial Measures sections in both this document and BMO’s 2024 Annual Report. For details on the composition of non-GAAP amounts, measures and ratios, as well as supplementary financial measures, refer<br>to the Glossary of Financial Terms. |
|---|---|
| (2) | Net income and earnings from our business operations are attributable to shareholders by way of EPS and diluted EPS.<br>Adjusted EPS and adjusted diluted EPS are non-GAAP measures. For further information, refer to the Non-GAAP and Other Financial Measures section. |
| --- | --- |
Certain comparative figures have been reclassified to conform with the current period’s presentation and for changes in accounting policy.
Earnings in certain quarters are impacted by seasonal factors, such as higher employee expenses related to employee benefits and stock-based compensation for employees eligible to retire, which are recorded in the first quarter of each year, as well as the impact of fewer days in the second quarter relative to other quarters. Results are also impacted by foreign currency translation, primarily changes in the U.S. dollar relative to the Canadian dollar. Quarterly EPS is impacted by the semi-annual payment of dividends on certain equity instruments. The table above outlines summary results for the fourth quarter of fiscal 2023 through the third quarter of fiscal 2025.
A number of specified items impacted reported results in certain quarters. The first quarter of fiscal 2025 included the impact of aligning accounting policies for employee vacation across legal entities. The fourth quarter of fiscal 2024 included a reversal of a fiscal 2022 legal provision, including accrued interest, associated with a predecessor bank, M&I Marshall and Ilsley Bank. Fiscal 2024 and fiscal 2025 included the impact of a FDIC special assessment in each quarter. The first quarter of fiscal 2024 included a loss on the sale of a portfolio of recreational vehicle loans related to balance sheet optimization. All periods included acquisition and integration costs, as well as the amortization of acquisition-related intangible assets and any impairments.
Financial performance benefitted from the strength and diversification of our businesses, with generally improving revenue.
Revenue growth in Canadian P&C reflected good customer acquisition and volume growth, with higher net interest margin. U.S. P&C revenue performance continued to be impacted by muted industry loan demand over the period with the last four quarters benefitting from higher net interest margin. In BMO Wealth Management, revenue in Wealth and Asset Management benefitted from stronger global markets and steady growth in client assets, while high interest rates resulted in a shift in deposit mix to term deposits and reduced margins, a trend that abated beginning the first quarter of fiscal 2025 with reductions in the Bank of Canada rate policy. Insurance revenue is subject to variability resulting from market-related impacts. Insurance results benefitted from a gain on the sale of a non-strategic portfolio of insurance contracts in the third quarter of fiscal 2025. BMO Capital Markets’ revenue is largely driven by market conditions that affect client activity. Trading activity delivered strong performance in the first half of fiscal 2025, supported by strong client flows, before moderating in the third quarter of fiscal 2025. Underwriting and advisory activity has improved, particularly in the third quarter of fiscal 2025.
Credit outcomes in both wholesale and consumer portfolios included the impact of a higher interest rate environment, resulting in higher provisions on impaired loans. Impaired provisions have decreased since the fourth quarter of fiscal 2024. Over the last eight quarters the bank has added provisions on performing loans reflecting credit migration and the impact of an uncertain economic environment on future credit conditions.
Non-interest expense reflected strong expense management, while we continue to invest in our business to drive revenue growth, including higher employee related expenses and technology costs. The first quarter of fiscal 2025 included the impact of aligning accounting policies for employee vacation across legal entities. The fourth quarter of fiscal 2024 benefitted from the reversal of the fiscal 2022 legal provision.
| BMO Financial Group Third Quarter Report 2025 31 |
|---|
The effective tax rate has varied with legislative changes; changes in tax policy, including their interpretation by tax authorities and the courts; earnings mix, including the relative proportion of earnings attributable to the different jurisdictions in which we operate, the level of pre-tax income, and the level of investments or securities which generate tax credits, or tax-exempt income from securities. The reported effective tax rate was impacted by the elimination of the income tax deduction for certain Canadian dividends in fiscal 2024 and the implementation of the global minimum tax rules beginning the first quarter of fiscal 2025.
Refer to the Non-GAAP and Other Financial Measures section for further information on non-GAAP amounts, measures and ratios, including adjusting items in this Summary Quarterly Earnings Trend section.
Transactions with Related Parties
In the ordinary course of business, we provide banking services to our key management personnel on the same terms that we offer to our preferred customers for those services. Key management personnel are defined as those persons having authority and responsibility for planning, directing and/or controlling the activities of an entity, being the directors and most senior executives of the bank. We provide banking services to our joint ventures and associates on the same terms offered to our customers for these services. We also offer employees a subsidy on annual credit card fees.
The bank’s policies and procedures for related party transactions did not materially change from October 31, 2024, as described in Note 28 of the audited annual consolidated financial statements of BMO’s 2024 Annual Report.
Off-Balance Sheet Arrangements
We enter into a number of off-balance sheet arrangements in the normal course of operations. The most significant of these are structured entities, credit instruments and guarantees, which are described in the Off-Balance Sheet Arrangements section of BMO’s 2024 Annual Report. We consolidate our own securitization vehicles, certain capital and funding vehicles, and other structured entities created to meet our own, as well as our customers’ needs. We do not consolidate our customer securitization vehicles, certain capital vehicles, various BMO-managed funds or various other structured entities where investments are held. There have been no significant changes to the bank’s off-balance sheet arrangements since October 31, 2024.
Accounting Policies and Critical Accounting Estimates and Judgments
Material accounting policies are described in BMO’s 2024 Annual Report and in the notes to our annual consolidated financial statements for the year ended October 31, 2024, and in Note 1 of the unaudited interim consolidated financial statements, together with a discussion of certain accounting estimates that are considered particularly important as they require management to make significant judgments, some of which relate to matters that are inherently uncertain. Readers are encouraged to review the discussion in Note 1 of the audited annual consolidated financial statements of BMO’s 2024 Annual Report, as well as the updates provided in Note 1 of the unaudited interim consolidated financial statements.
Allowance for Credit Losses
The allowance for credit losses (ACL) consists of allowances on impaired loans, which represent estimated losses related to impaired loans provided for but not yet written off, and allowances on performing loans, which is the bank’s best estimate of impairment in the existing portfolio for loans that have not yet been individually identified as impaired. Expected credit losses (ECL) are calculated on a probability-weighted basis, based on the economic scenarios described below, and are calculated for each exposure in the portfolio as a function of the probability of default (PD), exposure at default (EAD) and loss given default (LGD), with the timing of the loss also considered. Where there has been a significant increase in credit risk, remaining lifetime ECL is recorded; otherwise, 12 months of ECL is generally recorded. A significant increase in credit risk considers many different factors and will vary by product and risk segment. The main factors considered in making this determination are the change in PD since origination and certain other criteria, such as delinquency and watchlist status. We may apply experienced credit judgment to reflect factors not captured in the results produced by the ECL models, as we deem necessary. In the current quarter, we applied experienced credit judgment to reflect the impact of the uncertain environment on credit conditions and the economy. We have controls and processes in place to govern the ECL process, including judgments and assumptions used in determining the allowance on performing loans. These judgments and assumptions may change over time, and the impact of any such change will be recorded in future periods.
In establishing our allowance for performing loans, we attach probability weightings to economic scenarios which are representative of our view of economic and market conditions at the reporting date. The base scenario represents our view of the most probable outcome, as well as upside, downside, and severe downside scenarios, all developed by our Economics group.
When changes in economic performance are assessed, we use real GDP as the basis, which acts as the key driver for movements in many of the other economic and market variables used, including equity market and volatility indices, corporate credit spreads, unemployment rates, housing prices and consumer credit. In addition, we also consider industry-specific variables, where applicable. Many of the variables have a high degree of interdependency, and as such, there is no single variable to which the allowance is sensitive.
Our total allowance for credit losses as at July 31, 2025, was $5,786 million ($4,936 million as at October 31, 2024) and comprised an allowance on performing loans of $4,683 million and an allowance on impaired loans of $1,103 million ($4,205 million and $731 million, respectively, as at October 31, 2024). The allowance on performing loans increased $478 million from the fourth quarter of 2024, primarily driven by changes in the macro-economic outlook, portfolio credit migration, and the impact of the uncertain economic environment on future credit conditions, partially offset by lower balances in certain portfolios.
| 32 BMO Financial Group Third Quarter Report 2025 |
|---|
Information on the Provision for Credit Losses for the three and nine months ended July 31, 2025, can be found in the Total Provision for Credit Losses section.
For additional information, refer to the Risk Management section, Allowance for Credit Losses section of BMO’s 2024 Annual Report, Note 4 of the audited annual consolidated financial statements, as well as Note 3 of the unaudited interim consolidated financial statements.
This Accounting Policies and Critical Accounting Estimates and Judgments section contains forward-looking statements. Please refer to the Caution Regarding Forward-Looking Statements.
Disclosure for Global Systemically Important Banks (G-SIB)
Certain G-SIB indicators for the year ended October 31, 2024, previously disclosed in the Disclosure for Global Systemically Important Banks section of BMO’s First Quarter 2025 Report to Shareholders, have been subsequently revised as reflected in the table below.
Disclosure for Global Systemically Important Banks
| TABLE 21 | |||||
|---|---|---|---|---|---|
| As at October 31 | |||||
| (Canadian $ in millions) | Indicators | 2024 | 2023 | ||
| A. Cross-jurisdictional activity | 1. Cross-jurisdictional claims (1) | 787,081 | 683,915 | ||
| 2. Cross-jurisdictional<br>liabilities | 707,844 | 616,848 | |||
| B. Size | 3. Total exposures as defined for use<br>in the Basel III leverage ratio | 1,514,998 | 1,435,254 | ||
| C. Interconnectedness | 4. Intra-financial system assets | 191,887 | 174,316 | ||
| 5. Intra-financial system liabilities | 80,702 | 69,840 | |||
| 6. Securities outstanding | 348,447 | 337,901 | |||
| D. Substitutability/Financial institution infrastructure | 7. Payments activity (2) | 38,624,267 | 43,870,359 | ||
| 8. Assets under custody | 409,334 | 392,633 | |||
| 9. Underwritten transactions in debt and equity markets | 143,176 | 94,325 | |||
| 10. Trading volume (includes the two sub indicators) | |||||
| Trading volume fixed income sub indicator (1) | 2,813,092 | 5,163,888 | |||
| Trading volume equities and other securities sub indicator<br>(1) | 5,912,720 | 4,361,851 | |||
| E. Complexity | 11. Notional amount of<br>over-the-counter (OTC) derivatives (1) | 22,857,725 | 11,615,227 | ||
| 12. Trading, FVTPL and FVOCI securities (1) (3) | 79,820 | 55,793 | |||
| 13. Level 3 assets | 7,148 | 6,028 | |||
| (1) | Certain balances as at October 31, 2024, have been revised from amounts previously disclosed in BMO’s First<br>Quarter 2025 Report to Shareholders. | ||||
| --- | --- | ||||
| (2) | Included intercompany transactions that are cleared through a correspondent bank. | ||||
| --- | --- | ||||
| (3) | FVTPL: Fair value through profit or loss; FVOCI: Fair value through other comprehensive income. | ||||
| --- | --- |
Future Changes in Accounting Policies
We monitor the potential changes proposed by the International Accounting Standards Board (IASB) and analyze the effect that changes in the standards may have on BMO’s financial reporting and accounting policies. New standards and amendments to existing standards, which are effective for the bank in the future, can be found in Note 1 of the audited annual consolidated financial statements of BMO’s 2024 Annual Report.
Other Regulatory Developments
We continue to monitor and prepare for regulatory developments, including those referenced elsewhere in this document.
For a comprehensive discussion of other regulatory developments, refer to the Enterprise-Wide Capital Management section, the Risks That May Affect Future Results section, the Liquidity and Funding Risk section, and the Legal and Regulatory Risk section of BMO’s 2024 Annual Report.
| BMO Financial Group Third Quarter Report 2025 33 |
|---|
Risk Management
BMO’s risk management policies and processes, designed to identify, measure, manage, monitor, mitigate and report its credit and counterparty, market, insurance, liquidity and funding, operational non-financial, including artificial intelligence, cyber, information and other technology-related risks, legal and regulatory, strategic, environmental and social, and reputation risks are outlined in the Enterprise-Wide Risk Management section of BMO’s 2024 Annual Report.
Top and Emerging RisksThat May Affect Future Results
BMO’s top and emerging risks and other factors that may affect future results are described in the Enterprise-Wide Risk Management section of BMO’s 2024 Annual Report. These risks have the potential to materially impact BMO’s financial results, our operational efficiency, strategic direction or reputation. We continue to monitor the environment in which the bank operates, in order to identify and respond to any adverse developments, such as changes in general economic conditions and trade disputes, and take appropriate steps to reduce the impact on our results. For developments on general economic conditions and trade disputes, refer to the Economic Developments and Outlook section.
Real Estate Secured Lending
Real Estate Secured Lending includes residential mortgage and home equity line of credit (HELOC) exposures. The following tables provide a breakdown of residential mortgages and home equity lines of credit by geographic region, as well as insured and uninsured balances. Residential mortgages and home equity lines of credit are secured by residential properties.
Canadian Real Estate Secured Lending
| TABLE 22 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| (Canadian $ in millions, except as noted) | Residential<br><br><br>mortgages | Amortizing<br><br><br>home equity<br><br><br>lines of credit | Total amortizing<br><br><br>real estate<br> <br>secured lending | Non-amortizing<br><br><br>real estate<br> <br>secured lending | Total Canadian<br><br><br>real estate<br> <br>secured lending | |||||
| As at July 31, 2025 | **** | 161,830 | **** | 37,399 | **** | 199,229 | **** | 13,879 | **** | 213,108 |
| As at April 30, 2025 | 160,938 | 36,774 | 197,712 | 13,784 | 211,496 |
Residential Mortgages^(1)^ ****
| TABLE 23 | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| As at July 31, 2025 | As at April 30, 2025 | |||||||||||||||||||
| (Canadian $ in millions, except as noted) | Outstanding Balances | For the threemonths ended | Outstanding Balances | For the three<br>months ended | ||||||||||||||||
| Region (2) | Insured(3) | Uninsured | Total | % of total | Average LTV<br><br><br>uninsured(4) | Insured (3) | Uninsured | Total | % of total | Average LTV<br>uninsured (4) | ||||||||||
| Atlantic | **** | 3,258 | **** | 3,974 | **** | 7,232 | **** | 3.7% | **** | 69% | 3,233 | 3,924 | 7,157 | 3.7% | 70% | |||||
| Quebec | **** | 8,327 | **** | 13,558 | **** | 21,885 | **** | 11.2% | **** | 70% | 8,501 | 13,608 | 22,109 | 11.4% | 71% | |||||
| Ontario | **** | 14,374 | **** | 67,693 | **** | 82,067 | **** | 42.1% | **** | 70% | 14,166 | 66,762 | 80,928 | 41.7% | 70% | |||||
| Alberta | **** | 9,326 | **** | 8,450 | **** | 17,776 | **** | 9.1% | **** | 72% | 9,397 | 8,372 | 17,769 | 9.2% | 73% | |||||
| British Columbia | **** | 4,355 | **** | 24,760 | **** | 29,115 | **** | 14.9% | **** | 69% | 4,412 | 24,790 | 29,202 | 15.1% | 68% | |||||
| All other Canada | **** | 2,122 | **** | 1,633 | **** | 3,755 | **** | 1.9% | **** | 72% | 2,131 | 1,642 | 3,773 | 1.9% | 72% | |||||
| Total Canada | **** | 41,762 | **** | 120,068 | **** | 161,830 | **** | 82.9% | **** | 70% | 41,840 | 119,098 | 160,938 | 83.0% | 70% | |||||
| United States | **** | 64 | **** | 33,313 | **** | 33,377 | **** | 17.1% | **** | 74% | 61 | 32,815 | 32,876 | 17.0% | 72% | |||||
| Total | **** | 41,826 | **** | 153,381 | **** | 195,207 | **** | 100% | **** | 71% | 41,901 | 151,913 | 193,814 | 100% | 70% | |||||
| (1) | Reporting methodologies are in accordance with OSFI’s Residential Mortgage Underwriting Practices and Procedures (B-20) Guideline. | |||||||||||||||||||
| --- | --- | |||||||||||||||||||
| (2) | Region is based upon address of the property mortgaged. | |||||||||||||||||||
| --- | --- | |||||||||||||||||||
| (3) | Insured mortgages are defined as mortgages that are insured individually or in bulk through an eligible insurer (i.e.,<br>CMHC, Sagen MI Canada^TM^). | |||||||||||||||||||
| --- | --- | |||||||||||||||||||
| (4) | Loan-to-value (LTV) is based on original<br>outstanding balances for mortgages and authorized amounts for HELOCs, divided by the value of the collateral at point of origination. | |||||||||||||||||||
| --- | --- |
Home Equity Lines of Credit ^(1)^
| TABLE 24 | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| As at July 31, 2025 | As at April 30, 2025 | |||||||||||||||||||
| (Canadian $ in millions, except as noted) | Portfolio | For the threemonths ended | Portfolio | For the three<br>months ended | ||||||||||||||||
| Region (2) | OutstandingBalances | % | Authorizations | % | Average LTV(4) | Outstanding<br>Balances | % | Authorizations | % | Average LTV (4) | ||||||||||
| Atlantic | **** | 1,114 | **** | 1.9% | **** | 2,124 | **** | 1.8% | **** | 65% | 1,088 | 1.9% | 2,098 | 1.8% | 64% | |||||
| Quebec | **** | 9,234 | **** | 15.9% | **** | 18,857 | **** | 15.9% | **** | 71% | 9,170 | 16.0% | 18,675 | 15.8% | 69% | |||||
| Ontario | **** | 25,883 | **** | 44.7% | **** | 48,193 | **** | 40.5% | **** | 63% | 25,619 | 44.9% | 48,003 | 40.7% | 63% | |||||
| Alberta | **** | 3,280 | **** | 5.7% | **** | 7,344 | **** | 6.2% | **** | 64% | 3,206 | 5.6% | 7,239 | 6.1% | 62% | |||||
| British Columbia | **** | 11,037 | **** | 19.0% | **** | 20,818 | **** | 17.5% | **** | 63% | 10,752 | 18.8% | 20,479 | 17.3% | 62% | |||||
| All other Canada | **** | 730 | **** | 1.3% | **** | 1,468 | **** | 1.2% | **** | 70% | 723 | 1.3% | 1,484 | 1.3% | 70% | |||||
| Total Canada | **** | 51,278 | **** | 88.5% | **** | 98,804 | **** | 83.1% | **** | 65% | 50,558 | 88.5% | 97,978 | 83.0% | 64% | |||||
| United States | **** | 6,671 | **** | 11.5% | **** | 20,131 | **** | 16.9% | **** | 57% | 6,578 | 11.5% | 20,092 | 17.0% | 57% | |||||
| Total | **** | 57,949 | **** | 100% | **** | 118,935 | **** | 100% | **** | 64% | 57,136 | 100% | 118,070 | 100% | 62% |
Refer to footnote references in the Residential Mortgages table above.
| 34 BMO Financial Group Third Quarter Report 2025 |
|---|
Residential Mortgages by Remaining Term of Amortization ^(1) (2)^ ****
| TABLE 25 | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| As at July 31, 2025 | ||||||||||||||||
| Amortization period | ||||||||||||||||
| < 5 Years % | 6-10 Years % | 11-15 Years % | 16-20 Years % | 21-25 Years % | 26-30 Years % | 31-35 Years % | > 35 Years % | |||||||||
| Canada (3) | **** | 0.7% | **** | 2.8% | **** | 7.4% | **** | 18.1% | **** | 34.8% | **** | 26.9% | **** | 2.6% | **** | 6.7% |
| United States (4) | **** | 0.3% | **** | 1.6% | **** | 3.5% | **** | 2.6% | **** | 9.5% | **** | 82.3% | **** | 0.1% | **** | 0.1% |
| Total | **** | 0.7% | **** | 2.6% | **** | 6.8% | **** | 15.4% | **** | 30.5% | **** | 36.3% | **** | 2.2% | **** | 5.5% |
| As at April 30, 2025 | ||||||||||||||||
| Amortization period | ||||||||||||||||
| < 5 Years % | 6-10 Years % | 11-15 Years % | 16-20 Years % | 21-25 Years % | 26-30 Years % | 31-35 Years % | > 35 Years % | |||||||||
| Canada (3) | 0.7% | 2.8% | 7.4% | 18.3% | 36.0% | 25.3% | 2.5% | 7.0% | ||||||||
| United States (4) | 0.3% | 1.6% | 3.7% | 2.5% | 9.1% | 82.6% | 0.1% | 0.1% | ||||||||
| Total | 0.7% | 2.6% | 6.8% | 15.6% | 31.4% | 35.0% | 2.1% | 5.8% | ||||||||
| (1) | In Canada, the remaining amortization is based on the current balance, interest rate, customer payment amount and payment<br>frequency. The contractual payment schedule is used in the United States. | |||||||||||||||
| --- | --- | |||||||||||||||
| (2) | Reporting methodologies are in accordance with OSFI’s B-20 Guideline.<br> | |||||||||||||||
| --- | --- | |||||||||||||||
| (3) | As a result of increases in interest rates, the portfolio included $0.1 billion ($0.1 billion as at<br>April 30, 2025) of variable-rate mortgages in negative amortization, with all of the contractual payments in the current period being applied to interest, and the portion of interest due that is not met by each payment added to the principal.<br> | |||||||||||||||
| --- | --- | |||||||||||||||
| (4) | A large proportion of U.S.-based mortgages in the longer-amortization band are primarily associated with modification<br>programs for troubled borrowers and regulator-initiated mortgage refinancing programs. | |||||||||||||||
| --- | --- |
International Exposures
BMO’s geographic exposures outside of Canada and the United States are subject to a risk management framework that incorporates assessments of the economic and political risk in each region or country. These exposures are also managed within limits based on product, entity and country of ultimate risk. Our total net exposure to these regions is set out in the table below.
The table outlines total net exposure for funded lending and undrawn commitments, securities (including cash products, traded credit and credit default swap activity), repo-style transactions and derivatives. Repo-style transactions and derivatives exposure are reported at fair value. Derivatives exposures incorporate transaction netting where master netting agreements with counterparties have been entered into, and collateral offsets for counterparties where a Credit Support Annex is in effect.
Exposure by Region
| TABLE 26 | ||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| As at July 31, 2025 | As at<br><br><br>April 30, 2025 | |||||||||||||||||||||||||||
| (Canadian $ in millions) | Funded Lending and Commitments | Securities | Repo-Style Transactions andDerivatives | Total NetExposure | Total Net<br>Exposure | |||||||||||||||||||||||
| Region | Bank | Corporate | Sovereign | Total | Bank | Corporate | Sovereign | Total | Bank | Corporate | Sovereign | Total | ||||||||||||||||
| Europe (excluding United Kingdom) | **** | 705 | **** | 2,812 | **** | - | **** | 3,517 | **** | 502 | **** | 71 | **** | 3,273 | **** | 3,846 | **** | 918 | **** | 531 | **** | 15 | **** | 1,464 | **** | 8,827 | 12,003 | |
| United Kingdom | **** | 99 | **** | 7,109 | **** | 246 | **** | 7,454 | **** | 463 | **** | 85 | **** | 1,279 | **** | 1,827 | **** | 178 | **** | 587 | **** | 45 | **** | 810 | **** | 10,091 | 9,771 | |
| Latin America | **** | 2,618 | **** | 5,293 | **** | - | **** | 7,911 | **** | - | **** | 202 | **** | - | **** | 202 | **** | 1 | **** | 349 | **** | 17 | **** | 367 | **** | 8,480 | 8,089 | |
| Asia-Pacific | **** | 2,633 | **** | 2,835 | **** | 28 | **** | 5,496 | **** | 374 | **** | 29 | **** | 541 | **** | 944 | **** | 255 | **** | 254 | **** | 169 | **** | 678 | **** | 7,118 | 8,228 | |
| Africa and Middle East | **** | 1,979 | **** | 1,246 | **** | 105 | **** | 3,330 | **** | 3 | **** | 8 | **** | 13 | **** | 24 | **** | 3 | **** | 26 | **** | 1,811 | **** | 1,840 | **** | 5,194 | 4,272 | |
| Other (1) | **** | - | **** | 1 | **** | 19 | **** | 20 | **** | - | **** | - | **** | 3,901 | **** | 3,901 | **** | 4 | **** | - | **** | 490 | **** | 494 | **** | 4,415 | 4,680 | |
| Total | **** | 8,034 | **** | 19,296 | **** | 398 | **** | 27,728 | **** | 1,342 | **** | 395 | **** | 9,007 | **** | 10,744 | **** | 1,359 | **** | 1,747 | **** | 2,547 | **** | 5,653 | **** | 44,125 | 47,043 | |
| (1) | Primarily exposure to supranational entities. | |||||||||||||||||||||||||||
| --- | --- |
Caution
This Risk Management section contains forward-looking statements. Please refer to the Caution Regarding Forward-Looking Statements.
| BMO Financial Group Third Quarter Report 2025 35 |
|---|
Market Risk
BMO’s market risk management practices and key measures are outlined in the Market Risk section of BMO’s 2024 Annual Report.
Linkages between Balance Sheet Items and Market Risk Disclosures
The table below presents items reported in our Consolidated Balance Sheet that are subject to market risk, comprising balances that are subject to either traded risk or non-traded risk measurement techniques.
| TABLE 27 | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| As at October 31, 2024 | |||||||||||||||||
| Subject to market risk | Not subject<br><br><br>to marketrisk | Consolidated<br><br><br>Balance<br>Sheet | Subject to market risk | Not subject<br><br><br>to market<br>risk | Primary risk factors for<br><br><br>non-traded risk<br> <br>balances | ||||||||||||
| (Canadian in millions) | Tradedrisk (1) | Non-tradedrisk (2) | Traded<br>risk (1) | Non-traded<br>risk (2) | |||||||||||||
| Assets Subject to Market Risk | |||||||||||||||||
| Cash and cash equivalents | 58,587 | **** | - | 58,587 | **** | - | 65,098 | - | 65,098 | - | Interest rate | ||||||
| Interest bearing deposits with banks | 4,207 | **** | 270 | 3,937 | **** | - | 3,640 | 201 | 3,439 | - | Interest rate | ||||||
| Securities | 399,758 | **** | 152,371 | 247,387 | **** | - | 396,880 | 153,833 | 243,047 | - | Interest rate, credit spread, equity | ||||||
| Securities borrowed or purchased under resale agreements | 128,279 | **** | - | 128,279 | **** | - | 110,907 | - | 110,907 | - | Interest rate | ||||||
| Loans and acceptances (net of allowance for credit losses) | 677,135 | **** | 5,365 | 671,770 | **** | - | 678,016 | 6,085 | 671,931 | - | Interest rate, foreign exchange | ||||||
| Derivative instruments | 44,197 | **** | 41,376 | 2,821 | **** | - | 47,253 | 42,879 | 4,374 | - | Interest rate, foreign exchange | ||||||
| Customers’ liabilities under acceptances | 450 | **** | - | 450 | **** | - | 359 | - | 359 | - | Interest rate | ||||||
| Other assets | 118,940 | **** | 10,003 | 13,378 | **** | 95,559 | 107,494 | 9,783 | 11,001 | 86,710 | Interest rate | ||||||
| Total assets | 1,431,553 | **** | 209,385 | 1,126,609 | **** | 95,559 | 1,409,647 | 212,781 | 1,110,156 | 86,710 | |||||||
| Liabilities Subject to Market Risk | |||||||||||||||||
| Deposits | 955,363 | **** | 47,216 | 908,147 | **** | - | 982,440 | 45,223 | 937,217 | - | Interest rate, foreign exchange | ||||||
| Derivative instruments | 51,452 | **** | 49,262 | 2,190 | **** | - | 58,303 | 54,713 | 3,590 | - | Interest rate, foreign exchange | ||||||
| Acceptances | 450 | **** | - | 450 | **** | - | 359 | - | 359 | - | Interest rate | ||||||
| Securities sold but not yet purchased | 51,408 | **** | 51,408 | - | **** | - | 35,030 | 35,030 | - | - | Interest rate | ||||||
| Securities lent or sold under repurchase agreements | 126,759 | **** | - | 126,759 | **** | - | 110,791 | - | 110,791 | - | Interest rate | ||||||
| Other liabilities | 150,890 | **** | - | 87,755 | **** | 63,135 | 130,061 | - | 78,583 | 51,478 | Interest rate | ||||||
| Subordinated debt | 8,466 | **** | - | 8,466 | **** | - | 8,377 | - | 8,377 | - | Interest rate | ||||||
| Total liabilities | 1,344,788 | **** | 147,886 | 1,133,767 | **** | 63,135 | 1,325,361 | 134,966 | 1,138,917 | 51,478 |
All values are in US Dollars.
| (1) | Primarily comprises balance sheet items that are subject to the trading and underwriting risk management framework and<br>recorded at fair value through profit or loss. |
|---|---|
| (2) | Primarily comprises balance sheet items that are subject to the structural balance sheet insurance risk management<br>framework and secured financing transactions. |
| --- | --- |
Certain comparative figures have been reclassified to conform with the current period’s presentation.
Trading Market Risk Measures
Average Total Trading Value at Risk (VaR) increased marginally quarter-over-quarter from recent increases in market volatility. The increase was partially offset by lower equity and interest rate exposures.
Total Trading Value at Risk ^(1)^ ****
| TABLE 28 | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| For the quarter ended July 31, 2025 | April 30, 2025 | July 31, 2024 | ||||||||||||||
| Quarter-end | Average | High | Low | Average | Average | |||||||||||
| Commodity VaR | **** | 12.1 | **** | **** | 9.8 | **** | **** | 16.1 | **** | 5.5 | 8.7 | 4.4 | ||||
| Equity VaR | **** | 20.4 | **** | **** | 19.1 | **** | **** | 30.0 | **** | 14.4 | 20.6 | 16.6 | ||||
| Foreign exchange VaR | **** | 1.3 | **** | **** | 2.0 | **** | **** | 4.1 | **** | 0.9 | 2.1 | 1.2 | ||||
| Interest rate VaR (2) | **** | 23.2 | **** | **** | 27.4 | **** | **** | 33.6 | **** | 21.4 | 28.5 | 32.2 | ||||
| Diversification | **** | (25.2 | ) | **** | (19.0 | ) | **** | nm | **** | nm | (22.5 | ) | (19.8 | ) | ||
| Total Trading VaR | **** | 31.8 | **** | **** | 39.3 | **** | **** | 48.1 | **** | 31.0 | 37.4 | 34.6 | ||||
| (1) | One-day measure using a 99% confidence interval. Gains are presented in brackets and losses are presented as positive<br>numbers. | |||||||||||||||
| --- | --- | |||||||||||||||
| (2) | Interest rate VaR includes general credit spread risk. | |||||||||||||||
| --- | --- |
nm – not meaningful
Structural (Non-Trading) Market Risk
Our structural market risk strategy and profile remains consistent with prior periods. The net balance sheet is fully invested in an intermediate duration target interest rate profile. Structural economic value exposure to rising rates and structural economic value benefit to falling rates increased, compared with April 30, 2025, primarily due to modelled deposit pricing being more rate-sensitive at higher projected interest rate levels following the increase in term market rates during the current quarter.
Structural earnings benefit to rising interest rates increased, compared with April 30, 2025, as more net assets are scheduled to reprice over the next 12 months. Structural earnings exposure to falling interest rates increased, compared with April 30, 2025, as more net assets are scheduled to reprice over the next 12 months and due to lower modelled prepayment penalty fees on certain prepayable instruments, following the increase in term market rates during the current quarter.
| 36 BMO Financial Group Third Quarter Report 2025 |
|---|
Structural Interest Rate Sensitivity ^(1) (2)^ ****
| TABLE 29 | |||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings sensitivity over the next 12 months | |||||||||||||||||||||||||||||
| (Pre-tax Canadian equivalent in<br>millions) | July 31,<br><br><br>2025 | April 30,<br><br><br>2025 | July 31,<br><br><br>2024 | July 31,<br><br><br>2025 | April 30,<br><br><br>2025 | July 31,<br><br><br>2024 | |||||||||||||||||||||||
| United States | Total | Total | Total | Canada(3) | United States | Total | Total | Total | |||||||||||||||||||||
| 100 basis point increase | (782 | ) | **** | (961 | ) | **** | (1,744 | ) | (1,603 | ) | (1,629 | ) | **** | 161 | **** | **** | 188 | **** | **** | 349 | **** | 305 | 309 | ||||||
| 100 basis point decrease | 697 | **** | **** | 323 | **** | **** | 1,021 | **** | 747 | 852 | **** | (139 | ) | **** | (214 | ) | **** | (353 | ) | (242 | ) | (294 | ) |
All values are in US Dollars.
| (1) | Losses are presented in brackets and gains are presented as positive numbers. |
|---|---|
| (2) | Interest rate sensitivities assume an immediate and sustained parallel shift in assumed interest rates across the entire<br>yield curve as at the end of the period, using a constant balance sheet. |
| --- | --- |
| (3) | Includes Canadian dollar and other currencies. |
| --- | --- |
Insurance Market Risk
Insurance market risk includes interest rate and equity market risk arising from the activities of our BMO Insurance business. We entered into hedging arrangements to mitigate the impact of changes in interest rates on our earnings. The impact of insurance market risk on earnings is reflected in insurance investment results on our Consolidated Statement of Income. The impact of insurance market risk is not reflected in the Structural Interest Rate Sensitivity table above.
The table below reflects the estimated immediate impact on, or sensitivity of, our income before tax to changes in interest rates, including the estimated impact of the above hedging arrangements, and our exposure to equity price risk arising from our investment in equity securities.
| TABLE 30 | ||||||
|---|---|---|---|---|---|---|
| (Pre-tax Canadian $ in<br>millions) | As at July 31, 2025 | As at April 30, 2025 | ||||
| Interest Rate Sensitivity (1) (2) | ||||||
| 50 basis point increase | **** | - | **** | - | ||
| 50 basis point decrease | **** | (1 | ) | (1 | ) | |
| Equity Market Sensitivity (3) | ||||||
| 10% increase | **** | 6 | **** | 28 | ||
| 10% decrease | **** | (6 | ) | (26 | ) | |
| (1) | Estimated impact on, or sensitivity of, income before tax to a 50 basis point increase or decrease in interest rates.<br> | |||||
| --- | --- | |||||
| (2) | Interest rate sensitivities assume a parallel shift in assumed interest rates across the entire yield curve as at the end<br>of the period with no change in the ultimate risk-free rate. | |||||
| --- | --- | |||||
| (3) | Estimated impact on, or sensitivity of, income before tax to a 10% increase or decrease in our exposure to equity price<br>risk arising from our investment in equity securities at the reporting date, assuming all other variables remain constant. | |||||
| --- | --- |
Caution
This Market Risk section contains forward-looking statements. Please refer to the Caution Regarding Forward-Looking Statements.
| BMO Financial Group Third Quarter Report 2025 37 |
|---|
Liquidity and Funding Risk
Liquidity and funding risk is managed under a robust risk management framework. There were no material changes in the framework during the quarter.
BMO continued to maintain a strong liquidity position in the third quarter of 2025. Customer loans and deposits increased during the quarter, due to underlying growth and the impact of the stronger U.S. dollar. Wholesale funding decreased, reflecting net maturities. BMO’s liquidity metrics, including the Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR), remained well above internal targets and regulatory requirements.
BMO’s liquid assets are primarily held in our trading businesses, as well as in liquidity portfolios that are maintained for contingent liquidity risk management purposes and as investments of excess structural liquidity. Liquid assets include unencumbered, high-quality assets that are marketable, can be pledged as security for borrowings, and can be converted to cash in a time frame that meets our liquidity and funding requirements. BMO’s liquid assets are summarized in the table below.
In the normal course of business, we may encumber a portion of cash and securities holdings as collateral in support of trading activities and participation in clearing and payment systems in Canada, the United States and abroad. In addition, we may receive liquid assets as collateral and may re-pledge these assets in exchange for cash or as collateral in support of trading activities. Net unencumbered liquid assets, defined as on-balance sheet assets, such as BMO-owned cash and securities and securities borrowed or purchased under resale agreements, plus other off-balance sheet eligible collateral received, less assets encumbered as collateral, totalled $372.8 billion as at July 31, 2025, compared with $370.1 billion as at April 30, 2025. The increase in unencumbered liquid assets was due to higher securities balances and the impact of the stronger U.S. dollar, partially offset by lower cash balances.
Net unencumbered liquid assets are primarily held at the parent bank level, at BMO Bank N.A., and in our broker/dealer operations. In addition to liquid assets, BMO has access to the Bank of Canada’s lending assistance programs, the Federal Reserve Bank discount window in the United States, the Bank of England’s Sterling Monetary Framework, and European Central Bank standby liquidity facilities. We do not consider central bank facilities as a source of available liquidity when assessing the soundness of our liquidity position.
In addition to cash and securities holdings, we may also pledge other assets, including mortgages and loans, to raise long-term secured funding. BMO’s total encumbered assets and unencumbered liquid assets are summarized in the Asset Encumbrance table.
Liquid Assets
| TABLE 31 | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| As at July 31, 2025 | As at April 30, 2025 | |||||||||||
| (Canadian $ in millions) | Bank-ownedassets | Other cash &securitiesreceived | Total grossassets(1) | Encumberedassets | Netunencumberedassets^^(2) | Net<br><br><br>unencumbered<br>assets (2) | ||||||
| Cash and cash equivalents | **** | 58,587 | **** | - | **** | 58,587 | **** | 74 | **** | 58,513 | 65,280 | |
| Deposits with other banks | **** | 4,207 | **** | - | **** | 4,207 | **** | - | **** | 4,207 | 3,215 | |
| Securities and securities borrowed or purchased under resale agreements | ||||||||||||
| Sovereigns/Central banks/Multilateral development banks | **** | 186,364 | **** | 113,904 | **** | 300,268 | **** | 150,126 | **** | 150,142 | 142,672 | |
| NHA mortgage-backed securities and U.S. agency mortgage-backed securities and collateralized mortgage<br>obligations | **** | 115,318 | **** | 12,553 | **** | 127,871 | **** | 67,897 | **** | 59,974 | 62,548 | |
| Corporate and other debt | **** | 37,061 | **** | 20,988 | **** | 58,049 | **** | 21,139 | **** | 36,910 | 37,887 | |
| Corporate equity | **** | 61,015 | **** | 70,082 | **** | 131,097 | **** | 89,052 | **** | 42,045 | 37,698 | |
| Total securities and securities borrowed or purchased under resale agreements | **** | 399,758 | **** | 217,527 | **** | 617,285 | **** | 328,214 | **** | 289,071 | 280,805 | |
| NHA mortgage-backed securities (reported as loans at amortized<br>cost) (3) | **** | 26,911 | **** | - | **** | 26,911 | **** | 5,855 | **** | 21,056 | 20,795 | |
| Total liquid assets | **** | 489,463 | **** | 217,527 | **** | 706,990 | **** | 334,143 | **** | 372,847 | 370,095 | |
| (1) | Gross assets include bank-owned assets and cash and securities received from third parties. | |||||||||||
| --- | --- | |||||||||||
| (2) | Net unencumbered assets are defined as total gross assets less encumbered assets. | |||||||||||
| --- | --- | |||||||||||
| (3) | Under IFRS, National Housing Act (NHA) mortgage-backed securities that include mortgages owned by BMO as the underlying<br>collateral are classified as loans. Unencumbered NHA mortgage-backed securities have liquidity value and are included as liquid assets under BMO’s Liquidity and Funding Risk Management Framework. This amount is shown as a separate line item,<br>NHA mortgage-backed securities. | |||||||||||
| --- | --- | |||||||||||
| 38 BMO Financial Group Third Quarter Report 2025 | ||||||||||||
| --- |
Asset Encumbrance
| TABLE 32 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Encumbered(2) | Net unencumbered | |||||||||
| (Canadian $ in millions)<br><br><br>As at July 31, 2025 | Total grossassets(1) | Pledged ascollateral | Otherencumbered | Otherunencumbered(3) | Available ascollateral (4) | |||||
| Cash and deposits with other banks | **** | 62,794 | **** | - | **** | 74 | **** | - | **** | 62,720 |
| Securities (5) | **** | 644,196 | **** | 251,605 | **** | 82,464 | **** | 24,382 | **** | 285,745 |
| Loans | **** | 650,224 | **** | 60,810 | **** | 1,851 | **** | 436,008 | **** | 151,555 |
| Other assets | ||||||||||
| Derivative instruments | **** | 44,197 | **** | - | **** | - | **** | 44,197 | **** | - |
| Customers’ liability under acceptances | **** | 450 | **** | - | **** | - | **** | 450 | **** | - |
| Premises and equipment | **** | 6,184 | **** | - | **** | - | **** | 6,184 | **** | - |
| Goodwill | **** | 16,702 | **** | - | **** | - | **** | 16,702 | **** | - |
| Intangible assets | **** | 4,819 | **** | - | **** | - | **** | 4,819 | **** | - |
| Current tax assets | **** | 2,456 | **** | - | **** | - | **** | 2,456 | **** | - |
| Deferred tax assets | **** | 2,728 | **** | - | **** | - | **** | 2,728 | **** | - |
| Receivable from brokers, dealers and clients | **** | 42,275 | **** | - | **** | - | **** | 42,275 | **** | - |
| Other | **** | 43,776 | **** | 9,599 | **** | - | **** | 34,177 | **** | - |
| Total other assets | **** | 163,587 | **** | 9,599 | **** | - | **** | 153,988 | **** | - |
| Total assets | **** | 1,520,801 | **** | 322,014 | **** | 84,389 | **** | 614,378 | **** | 500,020 |
| Encumbered (2) | Net unencumbered | |||||||||
| (Canadian $ in millions)<br><br><br>As at April 30, 2025 | Total gross<br>assets (1) | Pledged as<br>collateral | Other<br>encumbered | Other<br>unencumbered (3) | Available as<br>collateral (4) | |||||
| Cash and deposits with other banks | 68,577 | - | 82 | - | 68,495 | |||||
| Securities (5) | 627,416 | 240,980 | 84,836 | 24,925 | 276,675 | |||||
| Loans | 649,612 | 65,022 | 1,828 | 431,366 | 151,396 | |||||
| Other assets | ||||||||||
| Derivative instruments | 49,726 | - | - | 49,726 | - | |||||
| Customers’ liability under acceptances | 438 | - | - | 438 | - | |||||
| Premises and equipment | 6,161 | - | - | 6,161 | - | |||||
| Goodwill | 16,630 | - | - | 16,630 | - | |||||
| Intangible assets | 4,824 | - | - | 4,824 | - | |||||
| Current tax assets | 1,620 | - | - | 1,620 | - | |||||
| Deferred tax assets | 2,641 | - | - | 2,641 | - | |||||
| Receivable from brokers, dealers and clients | 48,401 | - | - | 48,401 | - | |||||
| Other | 46,035 | 10,991 | - | 35,044 | - | |||||
| Total other assets | 176,476 | 10,991 | - | 165,485 | - | |||||
| Total assets | 1,522,081 | 316,993 | 86,746 | 621,776 | 496,566 | |||||
| (1) | Gross assets include on-balance sheet and<br>off-balance sheet assets. | |||||||||
| --- | --- | |||||||||
| (2) | Pledged as collateral refers to the portion of on-balance sheet assets and other<br>cash and securities that is pledged through repurchase agreements, securities lending, derivative contracts and requirements associated with participation in clearing houses and payment systems. Other encumbered assets include assets that are<br>restricted for legal or other reasons, such as minimum required deposits at central banks, short sales and certain U.S. agency securities that have been sold to third parties but are consolidated under IFRS. | |||||||||
| --- | --- | |||||||||
| (3) | Other unencumbered assets include select liquid asset holdings that management believes are not readily available to<br>support BMO’s liquidity requirements. These include securities of $24.4 billion as at July 31, 2025, and include securities held at BMO’s insurance subsidiary, seller financing securities and certain investments held at our<br>merchant banking business. Other unencumbered assets include mortgages and loans that may be securitized to access secured funding. | |||||||||
| --- | --- | |||||||||
| (4) | Loans included in available as collateral represent loans currently lodged at central banks that may be used to access<br>central bank funding. Loans available for pledging as collateral do not include other sources of additional liquidity that may be realized from BMO’s loan portfolio, such as incremental securitization, covered bond issuances and U.S. Federal<br>Home Loan Bank (FHLB) advances. | |||||||||
| --- | --- | |||||||||
| (5) | Includes securities, securities borrowed or purchased under resale agreements and NHA mortgage-backed securities (reported<br>as loans at amortized cost). | |||||||||
| --- | --- |
Net Unencumbered Liquid Assets by Legal Entity
| TABLE 33 | ||||
|---|---|---|---|---|
| (Canadian $ in millions) | As at July 31, 2025 | As at April 30, 2025 | ||
| BMO (parent) | **** | 216,582 | 218,200 | |
| BMO Bank N.A. | **** | 124,047 | 120,117 | |
| Broker dealers | **** | 32,218 | 31,778 | |
| Total net unencumbered liquid assets by legal entity | **** | 372,847 | 370,095 |
Funding Strategy
BMO’s funding strategy requires that secured and unsecured wholesale funding used to support loans and less liquid assets must have a term (typically maturing in two to ten years) that will support the effective term to maturity of these assets. Secured and unsecured wholesale funding for liquid trading assets is largely shorter term (maturing in one year or less), aligned with the liquidity of the assets being funded, and is subject to limits on aggregate maturities that are permitted across different periods. Supplemental liquidity pools are funded largely with wholesale term funding.
We maintain a large and stable base of customer deposits that, in combination with our strong capital position, is a source of strength. This supports the maintenance of a sound liquidity position and reduces reliance on wholesale funding. Customer deposits totalled $701.4 billion as at July 31, 2025, increasing from $697.0 billion as at April 30, 2025, driven by underlying deposit growth and the impact of the stronger U.S. dollar.
Total secured and unsecured wholesale funding outstanding, which largely consists of negotiable marketable securities, was $248.4 billion as at July 31, 2025, with $68.1 billion sourced as secured funding and $180.3 billion sourced as unsecured funding. Wholesale funding outstanding decreased from $258.8 billion as at April 30, 2025, due to net maturities during the current quarter. The mix and maturities of BMO’s wholesale term funding are outlined in the following table. Additional information on deposit maturities can be found in the Contractual Maturities of Assets and Liabilities and Off-Balance Sheet Commitments section. We maintain a sizeable portfolio of unencumbered liquid assets, totalling $372.8 billion as at July 31, 2025, that can be monetized to meet potential funding requirements, as described in the Unencumbered Liquid Assets section above.
| BMO Financial Group Third Quarter Report 2025 39 |
|---|
Wholesale Funding Maturities ^(1)^ ****
| TABLE 34 | ||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| As at July 31, 2025 | As at April 30, 2025 | |||||||||||||||||
| (Canadian $ in millions) | Less than<br><br><br>1 month | 1 to 3<br><br><br>months | 3 to 6<br><br><br>months | 6 to 12<br><br><br>months | Subtotal less<br><br><br>than 1 year | 1 to 2<br><br><br>years | Over<br><br><br>2 years | Total | Total | |||||||||
| Deposits from banks | **** | 2,214 | **** | 1,170 | **** | 1,272 | **** | 625 | **** | 5,281 | **** | - | **** | - | **** | 5,281 | 4,652 | |
| Certificates of deposit and commercial paper | **** | 6,096 | **** | 14,505 | **** | 30,220 | **** | 30,677 | **** | 81,498 | **** | 2,533 | **** | - | **** | 84,031 | 89,598 | |
| Bearer deposit notes | **** | 1,031 | **** | 1,788 | **** | 2,003 | **** | 1,263 | **** | 6,085 | **** | - | **** | - | **** | 6,085 | 3,673 | |
| Asset-backed commercial paper (ABCP) | **** | 1,528 | **** | 6,390 | **** | 5,962 | **** | 1,196 | **** | 15,076 | **** | - | **** | - | **** | 15,076 | 13,642 | |
| Senior unsecured medium-term notes | **** | 554 | **** | 4,722 | **** | 1,150 | **** | 6,878 | **** | 13,304 | **** | 18,703 | **** | 29,154 | **** | 61,161 | 63,749 | |
| Senior unsecured structured notes (2) | **** | 91 | **** | 7 | **** | 325 | **** | 228 | **** | 651 | **** | 1,054 | **** | 13,578 | **** | 15,283 | 15,737 | |
| Secured funding | ||||||||||||||||||
| Mortgage and HELOC securitizations | **** | 43 | **** | 169 | **** | 794 | **** | 788 | **** | 1,794 | **** | 2,803 | **** | 14,045 | **** | 18,642 | 19,042 | |
| Covered bonds | **** | - | **** | 623 | **** | 2,177 | **** | 6,206 | **** | 9,006 | **** | 9,778 | **** | 5,503 | **** | 24,287 | 27,582 | |
| Other asset-backed securitizations (3) | **** | - | **** | - | **** | 806 | **** | - | **** | 806 | **** | 733 | **** | 4,103 | **** | 5,642 | 6,491 | |
| Federal Home Loan Bank advances | **** | - | **** | 1,454 | **** | - | **** | 183 | **** | 1,637 | **** | 1,385 | **** | 1,385 | **** | 4,407 | 4,904 | |
| Subordinated debt | **** | - | **** | - | **** | 25 | **** | - | **** | 25 | **** | - | **** | 8,440 | **** | 8,465 | 9,738 | |
| Total | **** | 11,557 | **** | 30,828 | **** | 44,734 | **** | 48,044 | **** | 135,163 | **** | 36,989 | **** | 76,208 | **** | 248,360 | 258,808 | |
| Of which: | ||||||||||||||||||
| Secured | **** | 1,571 | **** | 8,636 | **** | 9,739 | **** | 8,373 | **** | 28,319 | **** | 14,699 | **** | 25,036 | **** | 68,054 | 71,661 | |
| Unsecured | **** | 9,986 | **** | 22,192 | **** | 34,995 | **** | 39,671 | **** | 106,844 | **** | 22,290 | **** | 51,172 | **** | 180,306 | 187,147 | |
| Total (4) | **** | 11,557 | **** | 30,828 | **** | 44,734 | **** | 48,044 | **** | 135,163 | **** | 36,989 | **** | 76,208 | **** | 248,360 | 258,808 | |
| (1) | Wholesale unsecured funding primarily includes funding raised through the issuance of negotiable marketable securities.<br>Wholesale funding excludes repo transactions which are disclosed in the Contractual Maturities of Assets and Liabilities and Off-Balance Sheet Commitments section, and also excludes ABCP issued by certain ABCP<br>conduits that are not consolidated for financial reporting purposes. | |||||||||||||||||
| --- | --- | |||||||||||||||||
| (2) | Includes structured notes issued to institutional investors and exchange-traded notes. | |||||||||||||||||
| --- | --- | |||||||||||||||||
| (3) | Includes credit card loan securitizations. | |||||||||||||||||
| --- | --- | |||||||||||||||||
| (4) | Total wholesale funding comprised Canadian-dollar-denominated funding totalling $55.1 billion and<br>U.S.-dollar-denominated and other foreign-currency-denominated funding totalling $193.3 billion as at July 31, 2025. | |||||||||||||||||
| --- | --- |
Diversification of our wholesale funding sources is an important part of our overall liquidity management strategy. BMO’s wholesale funding activities are well-diversified by jurisdiction, currency, investor segment, instrument type and maturity profile. BMO maintains ready access to long-term wholesale funding through various borrowing programs, including a European Note Issuance Program, Canadian, Australian and U.S. Medium-Term Note programs, Canadian and U.S. mortgage securitizations, Canadian credit card loans and home equity line of credit (HELOC) securitizations, covered bonds, and Canadian and U.S. senior unsecured deposits.
Our wholesale funding plan seeks to ensure sufficient funding capacity is available to execute our business strategies. The funding plan considers expected maturities, as well as asset and liability growth projected for our businesses in our forecasting and planning processes, and assesses funding needs in relation to the sources available. The funding plan is reviewed annually by the senior management committees with specific related responsibilities and approved by the Risk Review Committee, and is regularly updated to reflect actual results and incorporate updated forecast information.
Additional information on Liquidity and Funding Risk governance can be found in the Liquidity and Funding Risk section of BMO’s 2024 Annual Report. Please also see the Risk Management section.
Credit Ratings
The credit ratings assigned to BMO’s short-term and senior long-term debt securities by external rating agencies are important in raising both capital and funding to support the bank’s business operations. Maintaining strong credit ratings allows us to access the wholesale markets at competitive pricing levels. Should BMO’s credit ratings experience a downgrade, our cost of funding may increase and our access to funding and capital through the wholesale markets could be constrained. A material downgrade of BMO’s ratings could also have other consequences, including those set out in Note 8 of the audited annual consolidated financial statements of BMO’s 2024 Annual Report.
The credit ratings assigned to BMO’s senior debt by rating agencies are indicative of high-grade, high-quality issues. During the third quarter of fiscal 2025, Moody’s, Standard & Poor’s (S&P), Fitch and DBRS affirmed their ratings and maintained their stable outlook on BMO.
| TABLE 35 | |||||
|---|---|---|---|---|---|
| As at July 31, 2025 | |||||
| Rating agency (1) | Short-term debt | Senior debt (2) | Long-term<br>deposits/legacy<br>senior debt (3) | Subordinated<br><br><br>debt (NVCC) | Outlook |
| Moody’s | P-1 | A2 | Aa2 | Baa1 (hyb) | Stable |
| S&P | A-1 | A- | A+ | BBB+ | Stable |
| Fitch | F1+ | AA- | AA | A | Stable |
| DBRS | R-1 (high) | AA (low) | AA | A (low) | Stable |
| (1) | Credit ratings are not recommendations to purchase, hold or sell a financial obligation and do not address the market<br>price or suitability for a particular investor. Ratings are subject to revision or withdrawal at any time by the rating organization. | ||||
| --- | --- | ||||
| (2) | Subject to conversion under the Bank Recapitalization (Bail-In) Regime.<br> | ||||
| --- | --- | ||||
| (3) | Long-term deposits / Legacy senior debt includes senior debt issued prior to September 23, 2018, and senior debt<br>issued on or after September 23, 2018 that is excluded from the Bank Recapitalization (Bail-In) Regime. | ||||
| --- | --- |
We are required to deliver collateral to certain counterparties in the event of a downgrade of BMO’s current credit rating. The incremental collateral required is based on mark-to-market exposure, collateral valuations and collateral threshold arrangements, as applicable. As at July 31, 2025, we would be required to provide additional collateral to counterparties totalling $215 million, $479 million and $1,138 million, as a result of a one-notch, two-notch and three-notch downgrade, respectively.
| 40 BMO Financial Group Third Quarter Report 2025 |
|---|
Liquidity Coverage Ratio
The Liquidity Coverage Ratio (LCR) is calculated in accordance with OSFI’s LAR Guideline and is summarized in the following table. The LCR is calculated on a daily basis as the ratio of the stock of High-Quality Liquid Assets (HQLA) held to total net stressed cash outflows over the next 30 calendar days. BMO’s HQLA primarily comprises cash, highly-rated debt issued or backed by governments, highly-rated covered bonds and non-financial corporate debt, and non-financial equities that are part of a major stock index. Net cash flows include outflows from deposits, secured and unsecured wholesale funding, commitments and potential collateral requirements, offset by permitted inflows from loans, securities lending activities and other non-HQLA debt maturing over a 30-day horizon. Weightings prescribed by OSFI are applied to cash flows and HQLA to arrive at the weighted values and the LCR. The LCR does not reflect liquidity in BMO Financial Corp. (BFC) in excess of 100%, because of limitations on the transfer of liquidity between BFC and the parent bank. Canadian domestic systemically important banks (D-SIBs), including BMO, are required to maintain a minimum LCR of 100%. The average daily LCR for the quarter ended July 31, 2025, was 130%, equivalent to a surplus of $58.1 billion above the regulatory minimum. The LCR decreased 4% from 134% in the prior quarter, due to a decrease in HQLA. While banks are required to maintain an LCR of greater than 100% in normal conditions, they are also expected to be able to utilize HQLA during a period of stress, which may result in an LCR of less than 100% during such a period. The LCR is only one measure of a bank’s liquidity position and does not fully capture all of its liquid assets or the funding alternatives that may be available during a period of stress. BMO’s total liquid assets are shown in the Liquid Assets table.
| TABLE 36 | ||||
|---|---|---|---|---|
| For the quarter ended July 31, 2025 | ||||
| (Canadian $ in billions, except as noted) | Total unweighted value(average) (1) (2) | Total weighted value(average) (2) (3) | ||
| High-Quality Liquid Assets | ||||
| Total high-quality liquid assets (HQLA) | **** | * | **** | 252.1 |
| Cash Outflows | ||||
| Retail deposits and deposits from small business customers, of which: | **** | 307.0 | **** | 22.2 |
| Stable deposits | **** | 141.8 | **** | 4.3 |
| Less stable deposits | **** | 165.2 | **** | 17.9 |
| Unsecured wholesale funding, of which: | **** | 316.0 | **** | 136.3 |
| Operational deposits (all counterparties) and deposits in networks of cooperative banks | **** | 158.1 | **** | 39.1 |
| Non-operational deposits (all counterparties) | **** | 138.6 | **** | 77.9 |
| Unsecured debt | **** | 19.3 | **** | 19.3 |
| Secured wholesale funding | **** | * | **** | 28.9 |
| Additional requirements, of which: | **** | 250.7 | **** | 57.9 |
| Outflows related to derivatives exposures and other collateral requirements | **** | 38.6 | **** | 12.6 |
| Outflows related to loss of funding on debt products | **** | 3.7 | **** | 3.7 |
| Credit and liquidity facilities | **** | 208.4 | **** | 41.6 |
| Other contractual funding obligations | **** | 0.8 | **** | - |
| Other contingent funding obligations | **** | 558.2 | **** | 12.0 |
| Total cash outflows | **** | - | **** | 257.3 |
| Cash Inflows | ||||
| Secured lending (e.g., reverse repos) | **** | 181.2 | **** | 32.3 |
| Inflows from fully performing exposures | **** | 18.5 | **** | 10.1 |
| Other cash inflows | **** | 20.9 | **** | 20.9 |
| Total cash inflows | **** | 220.6 | **** | 63.3 |
| For the quarter ended July 31, 2025 | Total adjusted value(4) | |||
| Total HQLA | **** | 252.1 | ||
| Total net cash outflows | **** | 194.0 | ||
| Liquidity Coverage Ratio (%) (2) | **** | 130 | ||
| For the quarter ended April 30, 2025 | Total adjusted value (4) | |||
| Total HQLA | 258.7 | |||
| Total net cash outflows | 193.5 | |||
| Liquidity Coverage Ratio (%) | 134 | |||
| * | Disclosure is not required under the LCR disclosure standard. | |||
| --- | --- | |||
| (1) | Unweighted values are calculated at market value (for HQLA) or as outstanding balances maturing or callable within 30 days<br>(for inflows and outflows). | |||
| --- | --- | |||
| (2) | Values are calculated based on the simple average of the daily LCR over 64 business days in the third quarter of fiscal<br>2025. | |||
| --- | --- | |||
| (3) | Weighted values are calculated after the application of the weights prescribed under OSFI’s LAR Guideline for HQLA<br>and cash inflows and outflows. | |||
| --- | --- | |||
| (4) | Adjusted values are calculated based on total weighted values after applicable caps, as defined by the LAR Guideline.<br> | |||
| --- | --- | |||
| BMO Financial Group Third Quarter Report 2025 41 | ||||
| --- |
Net Stable Funding Ratio
The Net Stable Funding Ratio (NSFR) is a regulatory liquidity metric that assesses the stability of a bank’s funding profile in relation to the liquidity value of its assets and is calculated in accordance with OSFI’s LAR Guideline. Unlike the LCR, which is a short-term metric, the NSFR assesses a bank’s medium-term and long-term resilience. The NSFR is defined as the ratio of the amount of available stable funding (ASF) to the amount of required stable funding (RSF). ASF represents the proportion of own and third-party resources that are expected to be reliably available over a one-year horizon (including customer deposits, long-term wholesale funding, and capital). The stable funding requirements for each institution are set by OSFI based on the liquidity and maturity characteristics of its on-balance sheet assets and off-balance sheet exposures. Weightings prescribed by OSFI are applied to notional asset and liability balances to determine ASF, RSF and the NSFR. Canadian domestic systemically important banks (D-SIBs), including BMO, are required to maintain a minimum NSFR of 100%. BMO’s NSFR was 118% as at July 31, 2025, equivalent to a surplus of $117.6 billion above the regulatory minimum. The NSFR increased from 117% in the prior quarter, as lower available stable funding was more than offset by a decrease in required stable funding.
| TABLE 37 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| For the quarter ended July 31, 2025 | ||||||||||
| Unweighted value by residual maturity | Weighted<br><br><br>value (2) | |||||||||
| (Canadian $ in billions, except as noted) | No<br><br><br>maturity(1) | Less than 6months | 6 to 12<br><br><br>months | Over 1 year | ||||||
| Available Stable Funding (ASF) Item | ||||||||||
| Capital: | **** | - | **** | - | **** | - | **** | 97.7 | **** | 97.7 |
| Regulatory capital | **** | - | **** | - | **** | - | **** | 97.7 | **** | 97.7 |
| Other capital instruments | **** | - | **** | - | **** | - | **** | - | **** | - |
| Retail deposits and deposits from small business customers: | **** | 240.3 | **** | 65.9 | **** | 33.1 | **** | 62.4 | **** | 370.4 |
| Stable deposits | **** | 119.1 | **** | 27.5 | **** | 14.0 | **** | 12.7 | **** | 165.3 |
| Less stable deposits | **** | 121.2 | **** | 38.4 | **** | 19.1 | **** | 49.7 | **** | 205.1 |
| Wholesale funding: | **** | 324.8 | **** | 286.4 | **** | 58.8 | **** | 99.3 | **** | 281.0 |
| Operational deposits | **** | 145.6 | **** | - | **** | - | **** | 0.4 | **** | 73.2 |
| Other wholesale funding | **** | 179.2 | **** | 286.4 | **** | 58.8 | **** | 98.9 | **** | 207.8 |
| Liabilities with matching interdependent assets | **** | - | **** | 0.9 | **** | 0.7 | **** | 15.8 | **** | - |
| Other liabilities: | **** | 3.6 | **** | * | **** | * | **** | 102.4 | **** | 30.5 |
| NSFR derivative liabilities | **** | * | **** | * | **** | * | **** | 8.4 | **** | * |
| All other liabilities and equity not included in the above<br>categories | **** | 3.6 | **** | 63.4 | **** | 0.3 | **** | 30.3 | **** | 30.5 |
| Total ASF | **** | * | **** | * | **** | * | **** | * | **** | 779.6 |
| Required Stable Funding (RSF) Item | ||||||||||
| Total NSFR high-quality liquid assets (HQLA) | **** | * | **** | * | **** | * | **** | * | **** | 15.8 |
| Deposits held at other financial institutions for operational purposes | **** | - | **** | 0.1 | **** | - | **** | - | **** | 0.1 |
| Performing loans and securities: | **** | 195.6 | **** | 227.4 | **** | 75.2 | **** | 344.6 | **** | 519.6 |
| Performing loans to financial institutions secured by Level 1 HQLA | **** | - | **** | 106.7 | **** | 2.1 | **** | - | **** | 3.3 |
| Performing loans to financial institutions secured by non-Level 1<br>HQLA and unsecured performing loans to financial institutions | **** | 31.2 | **** | 64.2 | **** | 8.8 | **** | 16.1 | **** | 59.1 |
| Performing loans to non-financial corporate clients, loans to retail<br>and small business customers, and loans to sovereigns, central banks and public sector entities, of which: | **** | 124.9 | **** | 34.3 | **** | 34.8 | **** | 170.6 | **** | 285.7 |
| With a risk weight of less than or equal to 35% under the Basel II standardized approach for credit<br>risk | **** | - | **** | - | **** | - | **** | - | **** | - |
| Performing residential mortgages, of which: | **** | 13.9 | **** | 19.3 | **** | 29.2 | **** | 130.7 | **** | 125.0 |
| With a risk weight of less than or equal to 35% under the Basel II standardized approach for credit<br>risk | **** | 13.9 | **** | 19.3 | **** | 29.2 | **** | 130.7 | **** | 125.0 |
| Securities that are not in default and do not qualify as HQLA, including exchange-traded equities | **** | 25.6 | **** | 2.9 | **** | 0.3 | **** | 27.2 | **** | 46.5 |
| Assets with matching interdependent liabilities | **** | - | **** | 0.9 | **** | 0.7 | **** | 15.8 | **** | - |
| Other assets: | **** | 48.3 | **** | * | **** | * | **** | 122.1 | **** | 104.8 |
| Physical traded commodities, including gold | **** | 10.0 | **** | * | **** | * | **** | * | **** | 8.5 |
| Assets posted as initial margin for derivative contracts and contributions to default funds of central<br>clearing parties | **** | * | **** | * | **** | * | **** | 17.4 | **** | 14.8 |
| NSFR derivative assets | **** | * | **** | * | **** | * | **** | 3.3 | **** | - |
| NSFR derivative liabilities before deduction of variation margin posted | **** | * | **** | * | **** | * | **** | 16.0 | **** | 0.8 |
| All other assets not included in the above categories | **** | 38.3 | **** | 51.5 | **** | 0.4 | **** | 33.5 | **** | 80.7 |
| Off-balance sheet<br>items | **** | * | **** | * | **** | * | **** | 621.9 | **** | 21.7 |
| Total RSF | **** | * | **** | * | **** | * | **** | * | **** | 662.0 |
| Net Stable Funding Ratio (%) | **** | * | **** | * | **** | * | **** | * | **** | 118 |
| For the quarter ended April 30, 2025 | Weighted<br><br><br>Value (2) | |||||||||
| Total ASF | 784.4 | |||||||||
| Total RSF | 670.6 | |||||||||
| Net Stable Funding Ratio (%) | 117 | |||||||||
| * | Disclosure is not required under the NSFR disclosure standard. | |||||||||
| --- | --- | |||||||||
| (1) | Items in the no maturity column do not have a stated maturity. These may include, but are not limited to, non-maturity deposits, short positions, open maturity positions, non-HQLA equities, physical traded commodities and demand loans. | |||||||||
| --- | --- | |||||||||
| (2) | Weighted values are calculated after the application of the weights prescribed under the OSFI LAR Guideline for ASF and<br>RSF. | |||||||||
| --- | --- | |||||||||
| 42 BMO Financial Group Third Quarter Report 2025 | ||||||||||
| --- |
Contractual Maturities of Assets and Liabilities andOff-Balance Sheet Commitments
The tables below show the remaining contractual maturities of on-balance sheet assets and liabilities and off-balance sheet commitments. The contractual maturity of financial assets and liabilities is an input to, but is not necessarily consistent with, the expected maturity of assets and liabilities that is used in the management of liquidity and funding risk. We forecast asset and liability cash flows, under both normal market conditions and a number of stress scenarios, to manage liquidity and funding risk. Stress scenarios incorporate assumptions for loan repayments, deposit withdrawals, credit commitment and liquidity facility drawdowns by counterparty and product type. Stress scenarios also consider the time horizon over which liquid assets can be monetized and the related discounts (“haircuts”) and potential collateral requirements that may arise from both market volatility and credit rating downgrades, among other assumptions.
| TABLE 38 | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| July 31, 2025 | ||||||||||||||||||||||
| (Canadian $ in millions) | 0 to 1month | 1 to 3months | 3 to 6months | 6 to 9months | 9 to 12months | 1 to 2years | 2 to 5years | Over 5years | No specificmaturity | Total | ||||||||||||
| Assets | ||||||||||||||||||||||
| Cash and cash equivalents | **** | 56,239 | **** | - | **** | - | **** | - | **** | - | **** | - | **** | - | **** | - | **** | 2,348 | **** | **** | 58,587 | **** |
| Interest bearing deposits with banks | **** | 3,834 | **** | 301 | **** | 62 | **** | 1 | **** | - | **** | 9 | **** | - | **** | - | **** | - | **** | **** | 4,207 | **** |
| Securities | **** | 5,553 | **** | 6,071 | **** | 8,399 | **** | 8,334 | **** | 7,400 | **** | 35,898 | **** | 85,421 | **** | 181,668 | **** | 61,014 | **** | **** | 399,758 | **** |
| Securities borrowed or purchased under resale agreements | **** | 104,721 | **** | 16,893 | **** | 4,627 | **** | 942 | **** | 1,096 | **** | - | **** | - | **** | - | **** | - | **** | **** | 128,279 | **** |
| Loans (1) | ||||||||||||||||||||||
| Residential mortgages | **** | 1,843 | **** | 5,731 | **** | 10,044 | **** | 10,774 | **** | 14,536 | **** | 47,693 | **** | 69,321 | **** | 35,046 | **** | 219 | **** | **** | 195,207 | **** |
| Consumer instalment and other personal | **** | 639 | **** | 1,557 | **** | 2,610 | **** | 3,248 | **** | 4,540 | **** | 13,957 | **** | 19,760 | **** | 19,142 | **** | 27,131 | **** | **** | 92,584 | **** |
| Credit cards | **** | - | **** | - | **** | - | **** | - | **** | - | **** | - | **** | - | **** | - | **** | 12,984 | **** | **** | 12,984 | **** |
| Business and government | **** | 12,155 | **** | 15,985 | **** | 17,397 | **** | 16,645 | **** | 20,683 | **** | 65,205 | **** | 95,292 | **** | 37,061 | **** | 101,102 | **** | **** | 381,525 | **** |
| Allowance for credit losses | **** | - | **** | - | **** | - | **** | - | **** | - | **** | - | **** | - | **** | - | **** | (5,165 | ) | **** | (5,165 | ) |
| Total loans, net of allowance | **** | 14,637 | **** | 23,273 | **** | 30,051 | **** | 30,667 | **** | 39,759 | **** | 126,855 | **** | 184,373 | **** | 91,249 | **** | 136,271 | **** | **** | 677,135 | **** |
| Other assets | ||||||||||||||||||||||
| Derivative instruments | **** | 4,933 | **** | 6,072 | **** | 4,906 | **** | 3,270 | **** | 2,347 | **** | 5,980 | **** | 8,845 | **** | 7,844 | **** | - | **** | **** | 44,197 | **** |
| Customers’ liability under acceptances | **** | 450 | **** | - | **** | - | **** | - | **** | - | **** | - | **** | - | **** | - | **** | - | **** | **** | 450 | **** |
| Receivable from brokers, dealers and clients | **** | 42,275 | **** | - | **** | - | **** | - | **** | - | **** | - | **** | - | **** | - | **** | - | **** | **** | 42,275 | **** |
| Other | **** | 3,559 | **** | 884 | **** | 676 | **** | 40 | **** | 9 | **** | 16 | **** | 11 | **** | 7,778 | **** | 63,692 | **** | **** | 76,665 | **** |
| Total other assets | **** | 51,217 | **** | 6,956 | **** | 5,582 | **** | 3,310 | **** | 2,356 | **** | 5,996 | **** | 8,856 | **** | 15,622 | **** | 63,692 | **** | **** | 163,587 | **** |
| Total assets | **** | 236,201 | **** | 53,494 | **** | 48,721 | **** | 43,254 | **** | 50,611 | **** | 168,758 | **** | 278,650 | **** | 288,539 | **** | 263,325 | **** | **** | 1,431,553 | **** |
| TABLE 39 | ||||||||||||||||||||||
| July 31, 2025 | ||||||||||||||||||||||
| (Canadian $ in millions) | 0 to 1month | 1 to 3months | 3 to 6months | 6 to 9months | 9 to 12months | 1 to 2years | 2 to 5years | Over 5years | No specificmaturity | Total | ||||||||||||
| Liabilities and Equity | ||||||||||||||||||||||
| Deposits (2) (3) | **** | 34,448 | **** | 61,677 | **** | 78,715 | **** | 49,588 | **** | 50,945 | **** | 57,256 | **** | 69,821 | **** | 27,410 | **** | 525,503 | **** | **** | 955,363 | **** |
| Other liabilities | ||||||||||||||||||||||
| Derivative instruments | **** | 4,440 | **** | 11,006 | **** | 6,127 | **** | 3,438 | **** | 2,806 | **** | 5,808 | **** | 8,522 | **** | 9,305 | **** | - | **** | **** | 51,452 | **** |
| Acceptances | **** | 450 | **** | - | **** | - | **** | - | **** | - | **** | - | **** | - | **** | - | **** | - | **** | **** | 450 | **** |
| Securities sold but not yet purchased (4) | **** | 51,408 | **** | - | **** | - | **** | - | **** | - | **** | - | **** | - | **** | - | **** | - | **** | **** | 51,408 | **** |
| Securities lent or sold under repurchase agreements (4) | **** | 107,685 | **** | 15,087 | **** | 789 | **** | 7 | **** | 2 | **** | 3,189 | **** | - | **** | - | **** | - | **** | **** | 126,759 | **** |
| Securitization and structured entities’ liabilities | **** | 19 | **** | 165 | **** | 2,321 | **** | 201 | **** | 482 | **** | 3,313 | **** | 10,670 | **** | 32,388 | **** | - | **** | **** | 49,559 | **** |
| Insurance-related liabilities | **** | 77 | **** | 76 | **** | 21 | **** | 19 | **** | 32 | **** | 87 | **** | 212 | **** | 736 | **** | 17,612 | **** | **** | 18,872 | **** |
| Payable to brokers, dealers and clients | **** | 46,396 | **** | - | **** | - | **** | - | **** | - | **** | - | **** | - | **** | - | **** | - | **** | **** | 46,396 | **** |
| Other | **** | 12,777 | **** | 2,001 | **** | 2,373 | **** | 177 | **** | 327 | **** | 2,406 | **** | 2,668 | **** | 2,650 | **** | 10,684 | **** | **** | 36,063 | **** |
| Total other liabilities | **** | 223,252 | **** | 28,335 | **** | 11,631 | **** | 3,842 | **** | 3,649 | **** | 14,803 | **** | 22,072 | **** | 45,079 | **** | 28,296 | **** | **** | 380,959 | **** |
| Subordinated debt | **** | - | **** | - | **** | 25 | **** | - | **** | - | **** | - | **** | 25 | **** | 8,416 | **** | - | **** | **** | 8,466 | **** |
| Total equity | **** | - | **** | - | **** | - | **** | - | **** | - | **** | - | **** | - | **** | - | **** | 86,765 | **** | **** | 86,765 | **** |
| Total liabilities and equity | **** | 257,700 | **** | 90,012 | **** | 90,371 | **** | 53,430 | **** | 54,594 | **** | 72,059 | **** | 91,918 | **** | 80,905 | **** | 640,564 | **** | **** | 1,431,553 | **** |
| (1) | Loans receivable on demand have been included under no specific maturity. | |||||||||||||||||||||
| --- | --- | |||||||||||||||||||||
| (2) | Deposits payable on demand and payable after notice have been included under no specific maturity. | |||||||||||||||||||||
| --- | --- | |||||||||||||||||||||
| (3) | Deposits totalling $28,271 million as at July 31, 2025, have a fixed maturity date; however, they can be<br>redeemed early (either fully or partially) by customers without penalty. These are classified as payable on a fixed date due to their stated contractual maturity date. | |||||||||||||||||||||
| --- | --- | |||||||||||||||||||||
| (4) | These are presented based on their earliest maturity date. | |||||||||||||||||||||
| --- | --- | |||||||||||||||||||||
| TABLE 40 | ||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||
| July 31, 2025 | ||||||||||||||||||||||
| (Canadian $ in millions) | 0 to 1month | 1 to 3months | 3 to 6months | 6 to 9months | 9 to 12months | 1 to 2years | 2 to 5years | Over 5years | No specificmaturity | Total | ||||||||||||
| Off-Balance Sheet Commitments | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | ||
| Commitments to extend credit (1) | **** | 5,181 | **** | 5,985 | **** | 7,928 | **** | 10,741 | **** | 21,710 | **** | 55,795 | **** | 124,408 | **** | 6,743 | **** | - | **** | 238,491 | ||
| Letters of credit (2) | **** | 2,004 | **** | 4,208 | **** | 6,626 | **** | 5,440 | **** | 6,835 | **** | 2,536 | **** | 3,655 | **** | 81 | **** | - | **** | 31,385 | ||
| Backstop liquidity facilities | **** | 692 | **** | 777 | **** | 840 | **** | - | **** | 2,276 | **** | 4,704 | **** | 7,768 | **** | 868 | **** | - | **** | 17,925 | ||
| Other commitments (3) | **** | 55 | **** | 85 | **** | 230 | **** | 153 | **** | 135 | **** | 448 | **** | 791 | **** | 282 | **** | - | **** | 2,179 | ||
| (1) | Commitments to extend credit exclude personal lines of credit and credit cards that are unconditionally cancellable at<br>BMO’s discretion. A large majority of these commitments expire without being drawn upon. As a result, the total contractual amounts may not be representative of the funding likely to be required for these commitments. | |||||||||||||||||||||
| --- | --- | |||||||||||||||||||||
| (2) | Letters of credit can be drawn down at any time. These are classified based on their stated contractual maturity.<br> | |||||||||||||||||||||
| --- | --- | |||||||||||||||||||||
| (3) | Other commitments comprise purchase obligations and lease commitments for leases signed but not yet commenced.<br> | |||||||||||||||||||||
| --- | --- | |||||||||||||||||||||
| BMO Financial Group Third Quarter Report 2025 43 | ||||||||||||||||||||||
| --- | ||||||||||||||||||||||
| TABLE 41 | ||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| October 31, 2024 | ||||||||||||||||||||||
| (Canadian $ in millions) | 0 to 1<br>month | 1 to 3<br>months | 3 to 6<br>months | 6 to 9<br>months | 9 to 12<br>months | 1 to 2<br>years | 2 to 5<br>years | Over 5<br>years | No specific<br>maturity | Total | ||||||||||||
| Assets | ||||||||||||||||||||||
| Cash and cash equivalents | 62,827 | - | - | - | - | - | - | - | 2,271 | 65,098 | ||||||||||||
| Interest bearing deposits with banks | 2,513 | 628 | 481 | 18 | - | - | - | - | - | 3,640 | ||||||||||||
| Securities | 6,787 | 14,011 | 7,840 | 6,707 | 9,720 | 21,264 | 84,775 | 172,886 | 72,890 | 396,880 | ||||||||||||
| Securities borrowed or purchased under resale agreements | 85,185 | 16,803 | 5,701 | 2,330 | 888 | - | - | - | - | 110,907 | ||||||||||||
| Loans (1) | ||||||||||||||||||||||
| Residential mortgages | 1,683 | 3,284 | 6,413 | 6,653 | 9,252 | 52,489 | 77,867 | 33,227 | 212 | 191,080 | ||||||||||||
| Consumer instalment and other personal | 581 | 974 | 1,703 | 1,827 | 2,671 | 14,815 | 24,595 | 18,830 | 26,691 | 92,687 | ||||||||||||
| Credit cards | - | - | - | - | - | - | - | - | 13,612 | 13,612 | ||||||||||||
| Business and government | 8,647 | 14,418 | 16,461 | 19,448 | 21,828 | 63,613 | 105,740 | 32,444 | 102,394 | 384,993 | ||||||||||||
| Allowance for credit losses | - | - | - | - | - | - | - | - | (4,356 | ) | (4,356 | ) | ||||||||||
| Total loans, net of allowance | 10,911 | 18,676 | 24,577 | 27,928 | 33,751 | 130,917 | 208,202 | 84,501 | 138,553 | 678,016 | ||||||||||||
| Other assets | ||||||||||||||||||||||
| Derivative instruments | 5,573 | 7,996 | 7,211 | 2,482 | 1,660 | 6,365 | 8,374 | 7,592 | - | 47,253 | ||||||||||||
| Customers’ liability under acceptances | 359 | - | - | - | - | - | - | - | - | 359 | ||||||||||||
| Receivable from brokers, dealers and clients | 31,916 | - | - | - | - | - | - | - | - | 31,916 | ||||||||||||
| Other | 3,847 | 1,012 | 948 | 31 | 14 | 13 | 13 | 7,717 | 61,983 | 75,578 | ||||||||||||
| Total other assets | 41,695 | 9,008 | 8,159 | 2,513 | 1,674 | 6,378 | 8,387 | 15,309 | 61,983 | 155,106 | ||||||||||||
| Total assets | 209,918 | 59,126 | 46,758 | 39,496 | 46,033 | 158,559 | 301,364 | 272,696 | 275,697 | 1,409,647 | ||||||||||||
| TABLE 42 | ||||||||||||||||||||||
| October 31, 2024 | ||||||||||||||||||||||
| (Canadian $ in millions) | 0 to 1<br>month | 1 to 3<br>months | 3 to 6<br>months | 6 to 9<br>months | 9 to 12<br>months | 1 to 2<br>years | 2 to 5<br>years | Over 5<br>years | No specific<br>maturity | Total | ||||||||||||
| Liabilities and Equity | ||||||||||||||||||||||
| Deposits (2) (3) | 47,637 | 74,759 | 69,479 | 68,110 | 48,835 | 51,789 | 87,297 | 25,602 | 508,932 | 982,440 | ||||||||||||
| Other liabilities | ||||||||||||||||||||||
| Derivative instruments | 6,769 | 10,541 | 10,828 | 3,311 | 2,160 | 6,470 | 9,112 | 9,112 | - | 58,303 | ||||||||||||
| Acceptances | 359 | - | - | - | - | - | - | - | - | 359 | ||||||||||||
| Securities sold but not yet purchased (4) | 35,030 | - | - | - | - | - | - | - | - | 35,030 | ||||||||||||
| Securities lent or sold under repurchase agreements (4) | 99,364 | 7,777 | 721 | 106 | 1,016 | 1,807 | - | - | - | 110,791 | ||||||||||||
| Securitization and structured entities’ liabilities | 44 | 981 | 1,072 | 2,183 | 152 | 4,353 | 9,913 | 21,466 | - | 40,164 | ||||||||||||
| Insurance-related liabilities | 93 | 89 | 18 | 18 | 30 | 83 | 195 | 701 | 17,543 | 18,770 | ||||||||||||
| Payable to brokers, dealers and clients | 34,407 | - | - | - | - | - | - | - | - | 34,407 | ||||||||||||
| Other | 12,409 | 2,968 | 805 | 144 | 1,611 | 2,492 | 4,058 | 2,799 | 9,434 | 36,720 | ||||||||||||
| Total other liabilities | 188,475 | 22,356 | 13,444 | 5,762 | 4,969 | 15,205 | 23,278 | 34,078 | 26,977 | 334,544 | ||||||||||||
| Subordinated debt | - | - | - | - | - | 25 | 25 | 8,327 | - | 8,377 | ||||||||||||
| Total equity | - | - | - | - | - | - | - | - | 84,286 | 84,286 | ||||||||||||
| Total liabilities and equity | 236,112 | 97,115 | 82,923 | 73,872 | 53,804 | 67,019 | 110,600 | 68,007 | 620,195 | 1,409,647 | ||||||||||||
| (1) | Loans receivable on demand have been included under no specific maturity. | |||||||||||||||||||||
| --- | --- | |||||||||||||||||||||
| (2) | Deposits payable on demand and payable after notice have been included under no specific maturity. | |||||||||||||||||||||
| --- | --- | |||||||||||||||||||||
| (3) | Deposits totalling $29,136 million as at October 31, 2024, have a fixed maturity date; however, they can be<br>redeemed early (either fully or partially) by customers without penalty. These are classified as payable on a fixed date due to their stated contractual maturity date. | |||||||||||||||||||||
| --- | --- | |||||||||||||||||||||
| (4) | These are presented based on their earliest maturity date. | |||||||||||||||||||||
| --- | --- | |||||||||||||||||||||
| TABLE 43 | ||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||
| October 31, 2024 | ||||||||||||||||||||||
| (Canadian $ in millions) | 0 to 1<br>month | 1 to 3<br>months | 3 to 6<br>months | 6 to 9<br>months | 9 to 12<br>months | 1 to 2<br>years | 2 to 5<br>years | Over 5<br>years | No specific<br>maturity | Total | ||||||||||||
| Off-Balance Sheet Commitments | ||||||||||||||||||||||
| Commitments to extend credit (1) | 3,720 | 5,220 | 10,229 | 16,052 | 16,284 | 47,054 | 130,664 | 7,048 | - | 236,271 | ||||||||||||
| Letters of credit (2) | 2,109 | 5,235 | 6,113 | 6,761 | 6,163 | 2,310 | 3,689 | 36 | - | 32,416 | ||||||||||||
| Backstop liquidity facilities | 283 | 213 | 213 | 3,408 | 1,132 | 3,047 | 9,110 | 818 | - | 18,224 | ||||||||||||
| Other commitments (3) | 30 | 78 | 94 | 87 | 187 | 399 | 486 | 98 | - | 1,459 | ||||||||||||
| (1) | Commitments to extend credit exclude personal lines of credit and credit cards that are unconditionally cancellable at<br>BMO’s discretion. A large majority of these commitments expire without being drawn upon. As a result, the total contractual amounts may not be representative of the funding likely to be required for these commitments. | |||||||||||||||||||||
| --- | --- | |||||||||||||||||||||
| (2) | Letters of credit can be drawn down at any time. These are classified based on their stated contractual maturity.<br> | |||||||||||||||||||||
| --- | --- | |||||||||||||||||||||
| (3) | Other commitments comprise purchase obligations and lease commitments for leases signed but not yet commenced.<br> | |||||||||||||||||||||
| --- | --- |
Caution
This Liquidity and Funding Risk section contains forward-looking statements. Please refer to the Caution Regarding Forward-Looking Statements.
| 44 BMO Financial Group Third Quarter Report 2025 |
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Glossary of Financial Terms
Adjusted Earnings and Measures are non-GAAP and exclude certain specified items from revenue, non-interest expense, provision for credit losses and income taxes that may not be reflective of ongoing business performance. Management considers both reported and adjusted results to be useful in assessing underlying ongoing performance, as set out in the Non-GAAP and Other Financial Measures section.
Allowance for Credit Losses represents an amount deemed appropriate by management to absorb credit-related losses on loans and acceptances and other credit instruments, in accordance with applicable accounting standards. Allowance on Performing Loans is maintained to cover impairment in the existing portfolio for loans that have not yet been individually identified as impaired. Allowance on Impaired Loans is maintained to reduce the carrying value of individually identified impaired loans to the expected recoverable amount.
Allowance for Credit Losses onImpaired Loans Ratio is calculated as the allowance for credit losses on impaired loans as a percentage of gross impaired loans and acceptances.
Assetsunder Administration and Assets under Management refers to assets administered or managed by a financial institution that are beneficially owned by clients and therefore not reported on the balance sheet of the administering or managing financial institution.
Asset-Backed Commercial Paper (ABCP) is backed by assets such as trade receivables, and is generally used for short-term financing needs.
Average Earning Assets represents the daily average balance of deposits at central banks, deposits with other banks, securities borrowed or purchased under resale agreements, securities, and loans over the period.
Bankers’ Acceptances (BAs) are bills of exchange or negotiable instruments drawn by a borrower for payment at maturity and accepted by a bank. BAs constitute a guarantee of payment by the issuer’s bank for a fee and can be traded in the money market.
Basis Point is one one-hundredth of a percentage point.
Book Value per Share represents common shareholders’ equity divided by the number of common shares at the end of a period.
Collateral is assets pledged as security to secure loans or other obligations.
Collateralized Mortgage Obligations (CMOs) are debt securities with multiple tranches, issued by structured entities and collateralized by a pool of mortgages. Each tranche offers different terms, interest rates, and risks.
Common Equity Tier 1 (CET1) Capital comprises common shareholders’ equity, including applicable contractual service margin, net of deductions for goodwill, intangible assets, pension assets, certain deferred tax assets and other items, which may include a portion of expected credit loss provisions or a shortfall in allowances or other specified items.
Common Equity Tier 1 (CET1) Ratio is calculated as CET1 Capital divided by risk-weighted assets. The CET1 Ratio is calculated in accordance with OSFI’s Capital Adequacy Requirements (CAR) Guideline.
Common Shareholders’ Equity is the most permanent form of capital. For regulatory capital purposes, common shareholders’ equity comprises common shareholders’ equity, net of capital deductions.
ContractualService Margin (CSM) represents the unearned profit of a group of insurance contracts that we expect to recognize in the income statement as services provided.
Credit Valuation Adjustment (CVA) represents fair value adjustments to capture counterparty credit risk in our derivative valuations.
Derivatives are contracts, requiring no or little initial investment, with a value that is derived from movements in underlying interest or foreign exchange rates, equity or commodity prices or other indices. Derivatives are used to transfer, modify or reduce current or expected risks from changes in rates and prices.
Dividend Payout Ratio represents common share dividends as a percentage of net income available to common shareholders. It is calculated by dividing dividends per share by basic earnings per share.
Dividend Yield is calculated as dividends per common share divided by the closing share price.
Earnings per Share (EPS) is calculated by dividing net income available to common shareholders, after deducting preferred share dividends and distributions on other equity instruments, by the average number of common shares outstanding. Diluted EPS, which is BMO’s basis for measuring performance, adjusts for possible conversions of financial instruments into common shares if those conversions would reduce EPS.
Earnings Sensitivity is a measure of the impact of potential changes in interest rates on the projected 12-month pre-tax net income from a portfolio of assets, liabilities and off-balance sheet positions in response to prescribed parallel interest rate movements, with interest rates floored at zero.
Economic Capital is an expression of the enterprise’s capital demand requirement relative to its view of the economic risks in its underlying business activities. It represents management’s estimation of the likely magnitude of economic losses that could occur should severely adverse situations arise. Economic capital is calculated for various types of risk, including credit, market (trading and non-trading), operational non-financial, business and insurance, based on a one-year time horizon using a defined confidence level.
Economic Value Sensitivity is a measure of the impact of potential changes in interest rates on the market value of a portfolio of assets, liabilities and off-balance sheet positions in response to prescribed parallel interest rate movements, with interest rates floored at zero.
Effective Tax Rate is a percentage calculated as provision for income taxes divided by income before provision for income taxes.
Efficiency Ratio (orExpense-to-Revenue Ratio) is a measure of productivity. It is a percentage calculated as non-interest expense divided by total revenue (on a taxable equivalent basis in the operating groups).
Fair Value is the amount of consideration that would be agreed upon in an arm’s-length transaction between knowledgeable, willing parties who are under no compulsion to act in an orderly market transaction.
Forwards and Futures are contractual agreements to either buy or sell a specified amount of a currency, commodity, interest-rate-sensitive financial instrument or security at a specified price and date in the future. Forwards are customized contracts transacted in the over-the-counter market. Futures are transacted in standardized amounts on regulated exchanges and are subject to daily cash margin requirements.
Gross Impaired Loans and Acceptances (GIL) is calculated as the credit impaired balance of loans and customers’ liability under acceptances.
Gross Impaired Loans and Acceptances (GIL) Ratio is calculated as gross impaired loans and acceptances as a percentage of gross loans and acceptances.
Guarantees and Standby Letters of Credit represent our obligation to make payments to third parties on behalf of a customer if the customer is unable to make the required payments or meet other contractual requirements.
Hedging is a risk management technique used to neutralize, manage or offset interest rate, foreign currency, equity, commodity or credit risk exposures arising from normal banking activities.
High-Quality Liquid Assets (HQLA) are cash or assets that can be converted into cash with little or no loss in value to meet short-term liquidity needs.
Impaired Loans are loans for which there is no longer a reasonable assurance of the timely collection of principal or interest.
Insurance Investment Results represent net returns on insurance-related assets and the impact of the change in discount rates and financial assumptions on insurance contract liabilities.
Insurance Service Results represent insurance revenue, insurance service expenses and reinsurance results.
Leverage Exposures (LE) consist of on-balance sheet items and specified off-balance sheet items, net of specified adjustments.
Leverage Ratio is a Basel III regulatory measure calculated as Tier 1 Capital divided by LE, in accordance with OSFI’s Capital Adequacy Requirements (CAR) Guideline.
Liquidity and Funding Risk is the potential risk that we are unable to meet our financial commitments in a timely manner at reasonable prices as they come due. Financial commitments include liabilities to depositors and suppliers, as well as lending, investment and pledging commitments.
Liquidity Coverage Ratio (LCR) is a Basel III regulatory metric calculated as the ratio of high-quality liquid assets to total net stressed cash outflows over a thirty-day period under a stress scenario, in accordance with guidelines issued by OSFI.
| BMO Financial Group Third Quarter Report 2025 45 |
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Market Risk is the potential for adverse changes in the value of our assets and liabilities resulting from changes in market variables such as interest rates, foreign exchange rates, credit spreads, equity and commodity prices and their implied volatilities.
Mark-to-Market represents the valuation of financial instruments at fair value as of the balance sheet date.
Master Netting Agreements are agreements between two parties designed to reduce the credit risk of multiple derivative transactions through the provision of a legal right to offset exposure in the event of default.
Net Interest Income comprises earnings on assets, such as loans and securities, including interest and certain dividend income, less interest expense paid on liabilities, such as deposits. Net interest income, excluding trading, is presented on a basis that excludes trading-related interest income.
Net Interest Margin is the ratio of net interest income to average earning assets, expressed as a percentage or in basis points. Net interest margin, excluding trading net interest income, and trading and insurance average assets is calculated in the same manner, excluding trading-related interest income, and trading and insurance earning assets.
Net Stable Funding Ratio (NSFR) is a regulatory liquidity measure that assesses the stability of a bank’s funding profile in relation to the liquidity value of its assets, and is calculated in accordance with OSFI’s Liquidity Adequacy Requirements (CAR) Guideline.
Notional Amount refers to the principal amount used to calculate interest and other payments under derivative contracts. The principal amount does not change hands under the terms of a derivative contract, except in the case of cross-currency swaps.
Off-Balance Sheet Financial Instruments comprises a variety of financial arrangements offered to clients, which include credit derivatives, written put options, backstop liquidity facilities, standby letters of credit, performance guarantees, credit enhancements, commitments to extend credit, securities lending, documentary and commercial letters of credit, and other indemnifications.
Office of the Superintendent of Financial Institutions (OSFI) is the government agency responsible for regulating banks, insurance companies, trust companies, loan companies and pension plans in Canada.
Operating Leverage is the difference between the growth rates of revenue and non-interest expense.
Options are contractual agreements that convey to the purchaser the right but not the obligation to either buy or sell a specified amount of a currency, commodity, interest-rate-sensitive financial instrument or security at a fixed future date or at any time within a fixed future period.
Pre-Provision, Pre-Tax Earnings (PPPT) is calculated as income before the provision for income taxes and provision for (recovery of) credit losses. We use PPPT on both a reported and an adjusted basis to assess our ability to generate sustained earnings growth excluding credit losses, which are impacted by the cyclical nature of a credit cycle.
Provision for Credit Losses (PCL) is a charge to income that represents an amount deemed adequate by management to provide for impairment in a portfolio of loans and acceptances and other credit instruments, given the composition of the portfolio, the probability of default, the economic outlook and the allowance for credit losses already established. PCL can comprise both a provision for credit losses on impaired loans and a provision for credit losses on performing loans.
Provision for Credit Losses (PCL) Ratio is calculated as the annualized total provision for credit losses as a percentage of average net loans and acceptances.
Return on Equity or Return on CommonShareholders’ Equity (ROE) is calculated as net income, less preferred dividends and distributions on other equity instruments, as a percentage of average common shareholders’ equity. Common shareholders’ equity comprises common share capital, contributed surplus, accumulated other comprehensive income (loss) and retained earnings.
Return on Tangible Common Equity (ROTCE) is calculated as net income available to common shareholders, adjusted for the amortization of acquisition-related intangible assets and any impairments, as a percentage of average tangible common equity.
Risk-Weighted Assets (RWA) are on- and off-balance sheet exposures adjusted by a regulatory risk-weighted factor to a comparable risk level, in accordance with guidelines issued by OSFI.
Securities Borrowed or Purchased under ResaleAgreements are low-cost, low-risk instruments, often supported by the pledge of cash collateral, which arise from transactions that involve the borrowing or purchasing of securities.
Securities Lent or Sold under Repurchase Agreements are low-cost, low-risk liabilities, often supported by cash collateral, which arise from transactions that involve the lending or selling of securities.
Securitization is the practice of selling pools of contractual debts, such as residential mortgages and credit card debt obligations, to third parties or trusts, which then typically issue a series of asset-backed securities to investors to fund the purchase of the contractual debts.
Structured Entities (SEs) include entities for which voting or similar rights are not the dominant factor in determining control of the entity. BMO is required to consolidate a SE if it controls the entity by having power over the entity, exposure to variable returns as a result of its involvement and the ability to exercise power to affect the amount of those returns.
Structural (Non-Trading) MarketRisk comprises interest rate risk arising from banking activities (loans and deposits) and foreign exchange risk arising from foreign currency operations and exposures.
Swaps are contractual agreements between two parties to exchange a series of cash flows based on notional amounts over a specified period.
Tangible Common Equity is calculated as common shareholders’ equity, less goodwill and acquisition-related intangible assets, net of related deferred tax liabilities.
Taxable Equivalent Basis (teb): Operating segment revenue is presented on a taxable equivalent basis (teb). Net interest income, total revenue and the provision for income taxes in BMO Capital Markets and U.S. P&C are increased on tax-exempt securities to an equivalent pre-tax basis to facilitate comparisons of income between taxable and tax-exempt sources, and are reflected in the ratios. The offset to operating segment teb adjustments is reflected in Corporate Services net interest income, revenue and provision for (recovery of) income taxes.
Tier 1 Capital comprises CET1 Capital and Additional Tier 1 (AT1) Capital. AT1 Capital consists of preferred shares, limited recourse capital notes and other qualifying capital instruments issued by a subsidiary to third parties.
Tier 2 Capital comprises subordinated debentures and may include certain credit loss provisions, less regulatory deductions.
Total Capital comprises Tier 1 and Tier 2 Capital.
Total Loss AbsorbingCapacity (TLAC) comprises Total Capital and senior unsecured debt subject to the Canadian Bail-In Regime, less regulatory deductions, in accordance with guidelines issued by OSFI.
Total Loss Absorbing Capacity (TLAC) Ratio is calculated as TLAC divided by risk-weighted assets.
Total Loss Absorbing Capacity (TLAC) Leverage Ratio is calculated as TLAC divided by leverage exposures.
Total Shareholder Return: The annual total shareholder return (TSR) represents the average annual total return earned on an investment in BMO common shares made at the beginning of the respective period. The return includes the change in share price and assumes dividends received were reinvested in additional common shares.
Trading-Related Revenue comprises net interest income and non-interest revenue earned from on-balance sheet and off-balance sheet positions undertaken for trading purposes. The management of these positions typically includes marking them to market on a daily basis.
Value-at-Risk (VaR) measures the maximum loss likely to be experienced in the trading and underwriting portfolios, measured at a 99% confidence level over a one-day holding period. VaR is calculated for specific classes of risk in BMO’s trading and underwriting activities related to interest rates, foreign exchange rates, credit spreads, equity and commodity prices and their implied volatilities.
| 46 BMO Financial Group Third Quarter Report 2025 |
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Investor and Media Information
Investor Presentation Materials
Interested parties are invited to visit BMO’s website at www.bmo.com/investorrelations to review the 2024 Annual MD&A and audited annual consolidated financial statements, quarterly presentation materials and supplementary financial and regulatory information package.
Quarterly Conference Call and Webcast Presentations
Interested parties are also invited to listen to our quarterly conference call on Tuesday, August 26, 2025, at 7:15 a.m. (ET). The call may be accessed by telephone at 416-340-2217 (from within Toronto) or 1-800-806-5484 (toll-free outside Toronto), entering Passcode: 9768240#. A replay of the conference call can be accessed until September 26, 2025, by calling 905-694-9451 (from within Toronto) or 1-800-408-3053 (toll-free outside Toronto) and entering Passcode: 5503651#.
A live webcast of the call can be accessed on our website at www.bmo.com/investorrelations. A replay can also be accessed on the website.
Media Relations Contact
John Fenton, Head, Public Relations, john.fenton@bmo.com, 416-867-3996
Investor Relations Contacts
Christine Viau, Head, Investor Relations, christine.viau@bmo.com, 416-867-6956
Bill Anderson, Managing Director, Investor Relations, bill2.anderson@bmo.com, 416-867-7834
| Shareholder Dividend Reinvestment and Share Purchase<br><br><br>Plan (DRIP)<br> <br>Common shareholders may elect to have<br>their cash dividends reinvested in common shares of the bank, in accordance with the bank’s DRIP. More information about the Plan and how to enrol can be found at www.bmo.com/investorrelations.<br><br><br><br> <br>For dividend information, change in shareholder address<br><br><br>or to advise of duplicate mailings, please contact<br><br><br>Computershare Trust Company of Canada<br> <br>100 University Avenue, 8th Floor<br><br><br>Toronto, Ontario M5J 2Y1<br> <br>Telephone: 1-800-340-5021 (Canada and the United States)<br> <br>Telephone: (514) 982-7800 (international)<br> <br>Fax:<br>1-888-453-0330 (Canada and the United States)<br><br><br>Fax: (416) 263-9394 (international)<br> <br>E-mail: service@computershare.com | For other shareholder information, please contact<br><br><br>Bank of Montreal<br> <br>Shareholder Services<br><br><br>Corporate Secretary’s Department<br> <br>One First Canadian Place, 9th Floor<br><br><br>Toronto, Ontario M5X 1A1<br> <br>Telephone: (416)<br>867-6785<br> <br>E-mail: corp.secretary@bmo.com<br><br><br><br> <br>For further information on this document, please contact<br><br><br>Bank of Montreal<br> <br>Investor Relations Department<br><br><br>P.O. Box 1, One First Canadian Place, 37th Floor<br> <br>Toronto, Ontario M5X 1A1<br><br><br><br> <br>To review financial results and regulatory filings and disclosures online,please visit BMO’s website at www.bmo.com/investorrelations. |
|---|
BMO’s 2024 Annual MD&A, audited consolidated financial statements, annual information form and annual report on Form 40-F (filed with the U.S. Securities and Exchange Commission) are available online at www.bmo.com/investorrelations and at www.sedarplus.ca. Printed copies of the bank’s complete 2024 audited consolidated financial statements are available free of charge upon request at 416-867-6785 or corp.secretary@bmo.com.
Annual Meeting 2026
The next Annual Meeting of Shareholders will be held on Wednesday, April 15, 2026.
^®^ Registered trademark of Bank of Montreal
| 72 BMO Financial Group Third Quarter Report 2025 |
|---|
EX-99.2
Interim Consolidated Financial Statements
Consolidated Statement of Income
| (Unaudited) (Canadian in millions, except as noted) | For the nine months ended | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| April 30,<br><br>2025 | July 31,<br><br>2024 | July 31,<br><br>2025 | July 31,<br><br>2024 | ||||||||
| Interest, Dividend and Fee Income | |||||||||||
| Loans | 9,594 | $ | 9,501 | $ | 10,269 | $ | 29,216 | $ | 29,846 | ||
| Securities (Note 2) | 3,929 | 3,978 | 3,917 | 12,027 | 11,072 | ||||||
| Securities borrowed or purchased under resale agreements | 1,540 | 1,448 | 1,839 | 4,553 | 5,068 | ||||||
| Deposits with banks | 679 | 727 | 1,078 | 2,223 | 3,135 | ||||||
| 15,742 | 15,654 | 17,103 | 48,019 | 49,121 | |||||||
| Interest Expense | |||||||||||
| Deposits | 7,008 | 7,268 | 8,974 | 22,400 | 25,812 | ||||||
| Securities sold but not yet purchased and securities lent or sold under repurchase agreements | 2,227 | 2,374 | 2,405 | 6,790 | 6,563 | ||||||
| Subordinated debt | 118 | 115 | 116 | 344 | 338 | ||||||
| Other liabilities | 893 | 800 | 814 | 2,494 | 2,378 | ||||||
| 10,246 | 10,557 | 12,309 | 32,028 | 35,091 | |||||||
| Net Interest Income | 5,496 | 5,097 | 4,794 | 15,991 | 14,030 | ||||||
| Non-Interest Revenue | |||||||||||
| Securities commissions and fees | 286 | 275 | 278 | 849 | 818 | ||||||
| Deposit and payment service charges | 447 | 456 | 412 | 1,345 | 1,206 | ||||||
| Trading revenues | 406 | 819 | 622 | 2,027 | 1,681 | ||||||
| Lending fees | 327 | 324 | 353 | 1,013 | 1,126 | ||||||
| Card fees | 207 | 201 | 220 | 627 | 646 | ||||||
| Investment management and custodial fees | 589 | 556 | 528 | 1,719 | 1,512 | ||||||
| Mutual fund revenues | 376 | 353 | 339 | 1,092 | 977 | ||||||
| Underwriting and advisory fees | 453 | 415 | 332 | 1,248 | 1,047 | ||||||
| Securities gains, other than trading (Note 2) | 49 | 66 | 49 | 173 | 143 | ||||||
| Foreign exchange gains, other than trading | 65 | 62 | 67 | 203 | 196 | ||||||
| Insurance service results (Note 5) | 89 | 123 | 100 | 303 | 298 | ||||||
| Insurance investment results (Notes 2 and 5) | 29 | (4 | ) | 17 | 85 | 33 | |||||
| Share of profit (loss) in associates and joint ventures | 45 | (2 | ) | 52 | 92 | 157 | |||||
| Other revenues (losses) | 124 | (62 | ) | 29 | 166 | (32 | ) | ||||
| 3,492 | 3,582 | 3,398 | 10,942 | 9,808 | |||||||
| Total Revenue | 8,988 | 8,679 | 8,192 | 26,933 | 23,838 | ||||||
| Provision for Credit Losses (Note 3) | 797 | 1,054 | 906 | 2,862 | 2,238 | ||||||
| Non-Interest Expense | |||||||||||
| Employee compensation | 2,955 | 2,850 | 2,689 | 9,040 | 8,178 | ||||||
| Premises and equipment | 1,081 | 1,086 | 1,047 | 3,253 | 3,055 | ||||||
| Amortization of intangible assets | 278 | 296 | 277 | 862 | 832 | ||||||
| Advertising and business development | 198 | 210 | 217 | 582 | 610 | ||||||
| Communications | 82 | 95 | 98 | 263 | 299 | ||||||
| Professional fees | 172 | 141 | 136 | 459 | 406 | ||||||
| Association, clearing and annual regulator fees | 71 | 85 | 77 | 232 | 218 | ||||||
| Other | 268 | 256 | 298 | 860 | 1,474 | ||||||
| 5,105 | 5,019 | 4,839 | 15,551 | 15,072 | |||||||
| Income Before Provision for Income Taxes | 3,086 | 2,606 | 2,447 | 8,520 | 6,528 | ||||||
| Provision for income taxes (Note 11) | 756 | 644 | 582 | 2,090 | 1,505 | ||||||
| Net Income | 2,330 | $ | 1,962 | $ | 1,865 | $ | 6,430 | $ | 5,023 | ||
| Attributable to: | |||||||||||
| Bank shareholders | 2,327 | $ | 1,960 | $ | 1,865 | $ | 6,421 | $ | 5,017 | ||
| Non-controlling interest in subsidiaries | 3 | 2 | - | 9 | 6 | ||||||
| Net Income | 2,330 | $ | 1,962 | $ | 1,865 | $ | 6,430 | $ | 5,023 | ||
| Earnings Per Common Share (Canadian ) (Note 10) | |||||||||||
| Basic | 3.14 | $ | 2.51 | $ | 2.49 | $ | 8.48 | $ | 6.58 | ||
| Diluted | 3.14 | 2.50 | 2.48 | 8.47 | 6.57 | ||||||
| Dividends per common share | 1.63 | 1.59 | 1.55 | 4.81 | 4.57 |
All values are in US Dollars.
The accompanying notes are an integral part of these interim consolidated financial statements.
| BMO Financial Group Third Quarter Report 2025 <br>47 |
|---|
Interim Consolidated Financial Statements
Consolidated Statement of Comprehensive Income
| (Unaudited) (Canadian $ in millions) | For the three months ended | For the nine months ended | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| July 31,<br>2025 | April 30,<br>2025 | July 31,<br>2024 | July 31,<br>2025 | July 31,<br>2024 | |||||||||||
| Net Income | $ | 2,330 | $ | 1,962 | $ | 1,865 | $ | 6,430 | $ | 5,023 | |||||
| Other Comprehensive Income (Loss), net of taxes | |||||||||||||||
| Items that will subsequently be reclassified to net income | |||||||||||||||
| Net change in unrealized gains (losses) on fair value through OCI debt securities | |||||||||||||||
| Unrealized gains (losses) on fair value through OCI debt securities arising during the period (1) | 178 | (137 | ) | 56 | 161 | 367 | |||||||||
| Reclassification to earnings of (gains) during the period (2) | (11 | ) | (15 | ) | (19 | ) | (32 | ) | (64 | ) | |||||
| 167 | (152 | ) | 37 | 129 | 303 | ||||||||||
| Net change in unrealized gains (losses) on cash flow hedges | |||||||||||||||
| Gains (losses) on derivatives designated as cash flow hedges arising during the period (3) | (1,051 | ) | 818 | 1,829 | 142 | 2,300 | |||||||||
| Reclassification to earnings of losses on derivatives<br> designated as cash flow hedges during the period (4) | 272 | 184 | 335 | 797 | 1,103 | ||||||||||
| (779 | ) | 1,002 | 2,164 | 939 | 3,403 | ||||||||||
| Net gains (losses) on translation of net foreign operations | |||||||||||||||
| Unrealized gains (losses) on translation of net foreign operations | 282 | (3,205 | ) | 154 | (311 | ) | (244 | ) | |||||||
| Unrealized gains (losses) on hedges of net foreign operations (5) | (74 | ) | 747 | (41 | ) | 132 | 20 | ||||||||
| 208 | (2,458 | ) | 113 | (179 | ) | (224 | ) | ||||||||
| Items that will not be subsequently reclassified to net income | |||||||||||||||
| Net unrealized gains (losses) on fair value through OCI equity securities arising during the period (6) | - | - | 1 | (11 | ) | 9 | |||||||||
| Net gains (losses) on remeasurement of pension and other employee future benefit plans (7) | 55 | (28 | ) | 102 | 49 | 54 | |||||||||
| Net gains (losses) on remeasurement of own credit risk on financial liabilities<br> designated at fair value (8) | (313 | ) | 146 | 107 | (255 | ) | (676 | ) | |||||||
| (258 | ) | 118 | 210 | (217 | ) | (613 | ) | ||||||||
| Other Comprehensive Income (Loss), net of taxes | (662 | ) | (1,490 | ) | 2,524 | 672 | 2,869 | ||||||||
| Total Comprehensive Income | $ | 1,668 | $ | 472 | $ | 4,389 | $ | 7,102 | $ | 7,892 | |||||
| Attributable to: | |||||||||||||||
| Bank shareholders | $ | 1,665 | $ | 470 | $ | 4,389 | $ | 7,093 | $ | 7,886 | |||||
| Non-controlling<br> interest in subsidiaries | 3 | 2 | - | 9 | 6 | ||||||||||
| Total Comprehensive Income | $ | 1,668 | $ | 472 | $ | 4,389 | $ | 7,102 | $ | 7,892 | |||||
| (1) | Net of income tax (provision) recovery of $(66) million, $50 million, $(21) million for the three months ended and $(61) million and $(134) million for the nine months ended, respectively. | ||||||||||||||
| --- | --- | ||||||||||||||
| (2) | Net of income tax provision of $3 million, $6 million, $7 million for the three months ended and $11 million and $24 million for the nine months ended, respectively. | ||||||||||||||
| --- | --- | ||||||||||||||
| (3) | Net of income tax (provision) recovery of $409 million, $(302<br><br>) million, $(702<br><br>) million for the three months ended and $(41) million and $(884<br><br>) million for the nine months ended, respectively. | ||||||||||||||
| --- | --- | ||||||||||||||
| (4) | Net of income tax (recovery) of $(102) million, $(70<br><br>) million, $(127<br><br>) million for the three months ended and $(301) million and $(418<br><br>) million for the nine months ended, respectively. | ||||||||||||||
| --- | --- | ||||||||||||||
| (5) | Net of income tax (provision) recovery of $28 million, $(287<br><br>) million, $14 million for the three months ended and $(51) million and $(9<br><br>) million for the nine months ended, respectively. | ||||||||||||||
| --- | --- | ||||||||||||||
| (6) | Net of income tax (provision) recovery of $nil million, $nil million, $(1<br><br>) million for the three months ended and $4 million and $(4<br><br>) million for the nine months ended, respectively. | ||||||||||||||
| --- | --- | ||||||||||||||
| (7) | Net of income tax (provision) recovery of $(22) million, $11 million, $(40<br><br>) million for the three months ended and $(19) million and $(22<br><br>) million for the nine months ended, respectively. | ||||||||||||||
| --- | --- | ||||||||||||||
| (8) | Net of income tax (provision) recovery of $118 million, $(56<br><br>) million, $(42<br><br>) million for the three months ended and $96 million and $258 million for the nine months ended, respectively. | ||||||||||||||
| --- | --- |
The accompanying notes are an integral part of these interim consolidated financial statements.
| 48<br> BMO Financial Group Third Quarter Report 2025 |
|---|
Interim Consolidated Financial Statements
Consolidated Balance Sheet
| (Unaudited) (Canadian $ in millions) | As at | |||||
|---|---|---|---|---|---|---|
| July 31,<br>2025 | October 31,<br>2024 | |||||
| Assets | ||||||
| Cash and Cash Equivalents | $ | 58,587 | $ | 65,098 | ||
| Interest Bearing Deposits with Banks | 4,207 | 3,640 | ||||
| Securities<br>(Note 2) | ||||||
| Trading | 175,072 | 168,926 | ||||
| Fair value through profit or loss | 19,787 | 19,064 | ||||
| Fair value through other comprehensive income | 106,420 | 93,702 | ||||
| Debt securities at amortized cost | 98,479 | 115,188 | ||||
| 399,758 | 396,880 | |||||
| Securities Borrowed or Purchased Under Resale Agreements | 128,279 | 110,907 | ||||
| Loans<br>(Note 3) | ||||||
| Residential mortgages | 195,207 | 191,080 | ||||
| Consumer instalment and other personal | 92,584 | 92,687 | ||||
| Credit cards | 12,984 | 13,612 | ||||
| Business and government | 381,525 | 384,993 | ||||
| 682,300 | 682,372 | |||||
| Allowance for credit losses (Note 3) | (5,165 | ) | (4,356 | ) | ||
| 677,135 | 678,016 | |||||
| Other Assets | ||||||
| Derivative instruments | 44,197 | 47,253 | ||||
| Customers’ liability under acceptances | 450 | 359 | ||||
| Premises and equipment | 6,184 | 6,249 | ||||
| Goodwill | 16,702 | 16,774 | ||||
| Intangible assets | 4,819 | 4,925 | ||||
| Current tax assets | 2,456 | 2,219 | ||||
| Deferred tax assets | 2,728 | 3,024 | ||||
| Receivable from brokers, dealers and clients | 42,275 | 31,916 | ||||
| Other | 43,776 | 42,387 | ||||
| 163,587 | 155,106 | |||||
| Total Assets | $ | 1,431,553 | $ | 1,409,647 | ||
| Liabilities and Equity | ||||||
| Deposits<br>(Note 4) | $ | 955,363 | $ | 982,440 | ||
| Other Liabilities | ||||||
| Derivative instruments | 51,452 | 58,303 | ||||
| Acceptances | 450 | 359 | ||||
| Securities sold but not yet purchased | 51,408 | 35,030 | ||||
| Securities lent or sold under repurchase agreements | 126,759 | 110,791 | ||||
| Securitization and structured entities’ liabilities | 49,559 | 40,164 | ||||
| Insurance-related liabilities (Note 5) | 18,872 | 18,770 | ||||
| Payable to brokers, dealers and clients | 46,396 | 34,407 | ||||
| Other | 36,063 | 36,720 | ||||
| 380,959 | 334,544 | |||||
| Subordinated Debt<br>(Note 4) | 8,466 | 8,377 | ||||
| Total Liabilities | 1,344,788 | 1,325,361 | ||||
| Equity | ||||||
| Preferred shares and other equity instruments (Note 6) | 9,156 | 8,087 | ||||
| Common shares (Note 6) | 23,554 | 23,921 | ||||
| Contributed surplus | 368 | 354 | ||||
| Retained earnings | 47,554 | 46,469 | ||||
| Accumulated other comprehensive income | 6,091 | 5,419 | ||||
| Total shareholders’ equity | 86,723 | 84,250 | ||||
| Non-controlling<br> interest in subsidiaries | 42 | 36 | ||||
| Total Equity | 86,765 | 84,286 | ||||
| Total Liabilities and Equity | $ | 1,431,553 | $ | 1,409,647 |
The accompanying notes are an integral part of these interim consolidated financial statements.
| BMO Financial Group Third Quarter Report 2025 <br>49 |
|---|
Interim Consolidated Financial Statements
Consolidated Statement of Changes in Equity
| (Unaudited) (Canadian $ in millions) | For the three months ended | For the nine months ended | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| July 31,<br><br>2025 | July 31,<br><br>2024 | July 31,<br><br>2025 | July 31,<br><br>2024 | |||||||||
| Preferred Shares and Other Equity Instruments<br>(Note 6) | ||||||||||||
| Balance at beginning of period | $ | 7,787 | $ | 8,314 | $ | 8,087 | $ | 6,958 | ||||
| Issued during the period | 1,369 | 1,023 | 1,369 | 2,379 | ||||||||
| Redeemed during the period | - | (850 | ) | (300 | ) | (850 | ) | |||||
| Balance at end of period | 9,156 | 8,487 | 9,156 | 8,487 | ||||||||
| Common Shares<br>(Note 6) | ||||||||||||
| Balance at beginning of period | 23,730 | 23,896 | 23,921 | 22,941 | ||||||||
| Issued under the Shareholder Dividend Reinvestment and Share Purchase Plan | - | - | - | 905 | ||||||||
| Issued under the Stock Option Plan | 30 | 15 | 101 | 57 | ||||||||
| Treasury shares sold (purchased) | (8 | ) | - | (1 | ) | 8 | ||||||
| Repurchased for cancellation | (198 | ) | - | (467 | ) | - | ||||||
| Balance at end of period | 23,554 | 23,911 | 23,554 | 23,911 | ||||||||
| Contributed Surplus | ||||||||||||
| Balance at beginning of period | 367 | 350 | 354 | 328 | ||||||||
| Stock option expense, net of options exercised | 5 | (2 | ) | 10 | 9 | |||||||
| Net premium (discount) on sale of treasury shares | (4 | ) | (2 | ) | 4 | 9 | ||||||
| Balance at end of period | 368 | 346 | 368 | 346 | ||||||||
| Retained Earnings | ||||||||||||
| Balance at beginning of period | 47,158 | 44,772 | 46,469 | 44,006 | ||||||||
| Net income attributable to bank shareholders | 2,327 | 1,865 | 6,421 | 5,017 | ||||||||
| Dividends on preferred shares and distributions payable on other equity instruments | (66 | ) | (51 | ) | (273 | ) | (234 | ) | ||||
| Dividends on common shares | (1,165 | ) | (1,130 | ) | (3,475 | ) | (3,327 | ) | ||||
| Equity issue expense | (4 | ) | (5 | ) | (4 | ) | (11 | ) | ||||
| Common shares repurchased for cancellation (Note 6) | (696 | ) | - | (1,584 | ) | - | ||||||
| Balance at end of period | 47,554 | 45,451 | 47,554 | 45,451 | ||||||||
| Accumulated Other Comprehensive (Loss) on Fair Value through OCI Securities, net of taxes | ||||||||||||
| Balance at beginning of period | (370 | ) | (190 | ) | (321 | ) | (464 | ) | ||||
| Unrealized gains on fair value through OCI debt securities arising during the period | 178 | 56 | 161 | 367 | ||||||||
| Unrealized gains (losses) on fair value through OCI equity securities arising during the period | - | 1 | (11 | ) | 9 | |||||||
| Reclassification to earnings of (gains) during the period | (11 | ) | (19 | ) | (32 | ) | (64 | ) | ||||
| Balance at end of period | (203 | ) | (152 | ) | (203 | ) | (152 | ) | ||||
| Accumulated Other Comprehensive (Loss) on Cash Flow Hedges, net of taxes | ||||||||||||
| Balance at beginning of period | 199 | (4,209 | ) | (1,519 | ) | (5,448 | ) | |||||
| Gains (losses) on derivatives designated as cash flow hedges arising during the period | (1,051 | ) | 1,829 | 142 | 2,300 | |||||||
| Reclassification to earnings of losses on derivatives designated as cash flow hedges during the period | 272 | 335 | 797 | 1,103 | ||||||||
| Balance at end of period | (580 | ) | (2,045 | ) | (580 | ) | (2,045 | ) | ||||
| Accumulated Other Comprehensive Income on Translation of Net Foreign Operations, net of taxes | ||||||||||||
| Balance at beginning of period | 5,994 | 5,857 | 6,381 | 6,194 | ||||||||
| Unrealized gains (losses) on translation of net foreign operations | 282 | 154 | (311 | ) | (244 | ) | ||||||
| Unrealized gains (losses) on hedges of net foreign operations | (74 | ) | (41 | ) | 132 | 20 | ||||||
| Balance at end of period | 6,202 | 5,970 | 6,202 | 5,970 | ||||||||
| Accumulated Other Comprehensive Income on Pension and Other Employee<br> Future Benefit Plans, net of taxes | ||||||||||||
| Balance at beginning of period | 868 | 895 | 874 | 943 | ||||||||
| Gains on remeasurement of pension and other employee future benefit plans | 55 | 102 | 49 | 54 | ||||||||
| Balance at end of period | 923 | 997 | 923 | 997 | ||||||||
| Accumulated Other Comprehensive (Loss) on Own Credit Risk on Financial Liabilities Designated at Fair Value,<br> net of taxes | ||||||||||||
| Balance at beginning of period | 62 | (146 | ) | 4 | 637 | |||||||
| Gains (losses) on remeasurement of own credit risk on financial liabilities designated at fair value | (313 | ) | 107 | (255 | ) | (676 | ) | |||||
| Balance at end of period | (251 | ) | (39 | ) | (251 | ) | (39 | ) | ||||
| Total Accumulated Other Comprehensive Income | 6,091 | 4,731 | 6,091 | 4,731 | ||||||||
| Total Shareholders’ Equity | 86,723 | 82,926 | 86,723 | 82,926 | ||||||||
| Non-Controlling<br> Interest in Subsidiaries | ||||||||||||
| Balance at beginning of period | 38 | 31 | 36 | 28 | ||||||||
| Net income attributable to <br>non-controlling<br> interest in subsidiaries | 3 | - | 9 | 6 | ||||||||
| Dividends to <br>non-controlling<br> interest in subsidiaries | - | - | (3 | ) | (3 | ) | ||||||
| Other | 1 | - | - | - | ||||||||
| Balance at end of period | 42 | 31 | 42 | 31 | ||||||||
| Total Equity | $ | 86,765 | $ | 82,957 | $ | 86,765 | $ | 82,957 |
The accompanying notes are an integral part of these interim consolidated financial statements.
| 50<br> BMO Financial Group Third Quarter Report 2025 |
|---|
Interim Consolidated Financial Statements
Consolidated Statement of Cash Flows
| (Unaudited) (Canadian $ in millions) | For the three months ended | For the nine months ended | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| July 31,<br> <br>2025 | July 31,<br> <br>2024 | July 31,<br> <br>2025 | July 31,<br>2024 | |||||||||
| Cash Flows Provided by (Used in) Operating Activities | ||||||||||||
| Net Income | $ | 2,330 | $ | 1,865 | $ | 6,430 | $ | 5,023 | ||||
| Adjustments to determine net cash flows provided by operating activities: | ||||||||||||
| Securities (gains), other than trading (Note 2) | (49 | ) | (49 | ) | (173 | ) | (143 | ) | ||||
| Depreciation of premises and equipment | 252 | 246 | 750 | 730 | ||||||||
| Depreciation of other assets | 3 | 7 | 10 | 24 | ||||||||
| Amortization of intangible assets | 278 | 277 | 862 | 832 | ||||||||
| Provision for credit losses (Note 3) | 797 | 906 | 2,862 | 2,238 | ||||||||
| Deferred taxes | (77 | ) | 146 | 159 | (118 | ) | ||||||
| Share of (profit) in associates and joint ventures | (45 | ) | (52 | ) | (92 | ) | (157 | ) | ||||
| Changes in operating assets and liabilities: | ||||||||||||
| Trading securities | (503 | ) | (8,011 | ) | (5,873 | ) | (43,770 | ) | ||||
| Derivative assets | 5,813 | 1,949 | 5,031 | 7,679 | ||||||||
| Derivative liabilities | (6,464 | ) | 762 | (8,651 | ) | (3,997 | ) | |||||
| Current income taxes | (683 | ) | 587 | (513 | ) | 711 | ||||||
| Accrued interest receivable and payable | (498 | ) | 280 | (913 | ) | 1,119 | ||||||
| Insurance-related liabilities | (466 | ) | 1,051 | 102 | 2,952 | |||||||
| Brokers, dealers and clients receivable and payable | 3,748 | (2,841 | ) | 1,532 | 1,527 | |||||||
| Other items and accruals, net | 3,514 | (5,136 | ) | 816 | (8,544 | ) | ||||||
| Deposits | (5,457 | ) | 25,062 | (26,862 | ) | 54,270 | ||||||
| Loans | (929 | ) | (16,492 | ) | (2,930 | ) | (20,644 | ) | ||||
| Securities sold but not yet purchased | (2,155 | ) | (2,263 | ) | 16,480 | (3,630 | ) | |||||
| Securities lent or sold under repurchase agreements | 7,349 | 4,234 | 16,378 | 19,285 | ||||||||
| Securities borrowed or purchased under resale agreements | (8,416 | ) | 161 | (17,687 | ) | (2,415 | ) | |||||
| Securitization and structured entities’ liabilities | (2,548 | ) | (663 | ) | 9,755 | 9,024 | ||||||
| Net Cash Provided by (Used in) Operating Activities | (4,206 | ) | 2,026 | (2,527 | ) | 21,996 | ||||||
| Cash Flows (Used in) Financing Activities | ||||||||||||
| Net (decrease) in liabilities of subsidiaries | (504 | ) | (2,042 | ) | (1,219 | ) | (8,810 | ) | ||||
| Proceeds from issuance of subordinated debt (Note 4) | - | 1,000 | 1,250 | 1,000 | ||||||||
| Repayment of subordinated debt (Note 4) | (1,250 | ) | - | (1,250 | ) | - | ||||||
| Proceeds from issuance of preferred shares, net of issuance costs (Note 6) | 1,365 | 1,018 | 1,365 | 2,368 | ||||||||
| Redemption of preferred shares (Note 6) | - | (850 | ) | (300 | ) | (850 | ) | |||||
| Net proceeds from issuance of common shares (Note 6) | 27 | 17 | 91 | 48 | ||||||||
| Net sale (purchase) of treasury shares | (12 | ) | - | 3 | 8 | |||||||
| Common shares repurchased for cancellation (Note 6) | (877 | ) | - | (2,013 | ) | - | ||||||
| Cash dividends and distributions paid | (1,293 | ) | (1,245 | ) | (3,800 | ) | (2,659 | ) | ||||
| Cash dividends paid to <br>non-controlling<br> interest | - | - | (3 | ) | (3 | ) | ||||||
| Repayment of lease liabilities | (98 | ) | (91 | ) | (236 | ) | (276 | ) | ||||
| Net Cash (Used in) Financing Activities | (2,642 | ) | (2,193 | ) | (6,112 | ) | (9,174 | ) | ||||
| Cash Flows Provided by (Used in) Investing Activities | ||||||||||||
| Interest bearing deposits with banks | (978 | ) | 791 | (546 | ) | 553 | ||||||
| Purchases of securities, other than trading | (12,590 | ) | (21,789 | ) | (47,965 | ) | (62,007 | ) | ||||
| Maturities of securities, other than trading | 5,639 | 6,919 | 31,021 | 20,008 | ||||||||
| Proceeds from sales of securities, other than trading | 8,221 | 9,338 | 21,332 | 26,605 | ||||||||
| Net purchases of premises and equipment and software | (405 | ) | (413 | ) | (1,230 | ) | (1,132 | ) | ||||
| Net Cash Provided by (Used in) Investing Activities | (113 | ) | (5,154 | ) | 2,612 | (15,973 | ) | |||||
| Effect of Exchange Rate Changes on Cash and Cash Equivalents | 186 | 213 | (484 | ) | (22 | ) | ||||||
| Net (decrease) in Cash and Cash Equivalents | (6,775 | ) | (5,108 | ) | (6,511 | ) | (3,173 | ) | ||||
| Cash and Cash Equivalents at Beginning of Period | 65,362 | 79,869 | 65,098 | 77,934 | ||||||||
| Cash and Cash Equivalents at End of Period | $ | 58,587 | $ | 74,761 | $ | 58,587 | $ | 74,761 | ||||
| Supplemental Disclosure of Cash Flow Information | ||||||||||||
| Net cash provided by operating activities includes: | ||||||||||||
| Interest paid in the period (1) | $ | 10,856 | $ | 12,083 | $ | 32,956 | $ | 33,564 | ||||
| Income taxes paid in the period | 1,086 | 471 | 2,392 | 1,548 | ||||||||
| Interest received in the period | 15,396 | 16,519 | 46,316 | 46,995 | ||||||||
| Dividends received in the period | 521 | 732 | 1,884 | 1,923 | ||||||||
| (1) | Includes dividends paid on securities sold but not yet purchased. | |||||||||||
| --- | --- |
The accompanying notes are an integral part of these interim consolidated financial statements.
| BMO Financial Group Third Quarter Report 2025 <br>51 |
|---|
Notes to Interim Consolidated Financial Statements
July 31, 2025 (Unaudited)
Note 1: Basis of Presentation
Bank of Montreal (the bank or BMO) is a chartered bank under the Bank Act (Canada) and is a public company incorporated in Canada. We are a highly diversified financial services company, providing a broad range of personal and commercial banking, wealth management and investment banking products and services. The bank’s head office is at 129 rue Saint Jacques, Montreal, Quebec. Our executive offices are at 100 King Street West, 1 First Canadian Place, Toronto, Ontario. Our common shares are listed on the Toronto Stock Exchange (TSX) and the New York Stock Exchange.
These condensed interim consolidated financial statements have been prepared in accordance with International Accounting Standard (IAS) 34, Interim Financial Reporting as issued by the International Accounting Standards Board (IASB) using the same accounting policies as disclosed in our annual consolidated financial statements for the year ended October 31, 2024, except as outlined below. These condensed interim consolidated financial statements should be read in conjunction with the notes to our annual consolidated financial statements for the year ended October 31, 2024. We also comply with interpretations of International Financial Reporting Standards (IFRS) by our regulator, the Office of the Superintendent of Financial Institutions (OSFI). These interim consolidated financial statements were authorized for issue by the Board of Directors on August 26, 2025.
Use of Estimates and Judgments
The preparation of the interim consolidated financial statements requires management to make estimates and judgments that affect the carrying amounts of certain assets and liabilities, certain amounts reported in net income and other related disclosures.
The most significant assets and liabilities for which we must make estimates and judgments include the allowance for credit losses (ACL); financial instruments measured at fair value; pension and other employee future benefits; impairment of securities and investments in associates and joint ventures; income taxes and deferred tax assets; goodwill and intangible assets; insurance contract liabilities; provisions including legal proceedings and severance charges; transfers of financial assets and consolidation of structured entities. We make judgments in assessing the business model for financial assets as well as whether substantially all risks and rewards have been transferred in respect of transfers of financial assets and whether we control structured entities. If actual results were to differ from the estimates, the impact would be recorded in future periods.
The economic outlook is subject to several risks that could lead to a less favourable outcome for the North American economy. The most immediate threat is from a possible escalation of U.S. tariffs. Canadian businesses face longer-term risks in the event of an unsuccessful renegotiation of the United States-Mexico-Canada Agreement, as tariffs could then apply to all goods exported to the U.S., rather than just a small share. Other risks stem from the continued conflicts in Ukraine and the Middle East. The impact on our business, results of operations, reputation, financial performance and condition, including the potential for credit, counterparty and mark-to-market losses, our credit ratings and regulatory capital and liquidity ratios, as well as the impacts to our customers and competitors, will depend on future developments, which remain uncertain. By their very nature, the estimates and judgments we make for the purposes of preparing our consolidated financial statements relate to matters that are inherently uncertain. However, we have detailed policies and internal controls in place that are intended to ensure the judgments made in estimating these amounts are well controlled and independently reviewed, and that our policies are consistently applied from period to period. We believe that our estimates of the value of our assets and liabilities are appropriate as at July 31, 2025.
Allowance for Credit Losses
As detailed further in Note 1 of our annual consolidated financial statements for the year ended October 31, 2024, ACL consists of allowances on impaired loans, which represent estimated losses related to impaired loans in the portfolio provided for but not yet written off, and allowances on performing loans, which is our best estimate of impairment in the existing portfolio for loans that have not yet been individually identified as impaired.
The expected credit losses (ECL) model requires the recognition of credit losses generally based on 12 months of expected losses for performing loans and the recognition of lifetime losses on performing loans that have experienced a significant increase in credit risk since origination.
The determination of a significant increase in credit risk takes into account many different factors and varies by product and risk segment. The bank’s methodology for determining a significant increase in credit risk is based on the change in probability of default between origination, and reporting date, assessed using probability-weighted scenarios as well as certain other criteria, such as 30 days past due and watchlist status. The assessment of a significant increase in credit risk requires experienced credit judgment.
In determining whether there has been a significant increase in credit risk and in calculating the amount of ECL, we must rely on estimates and exercise judgment, based on what we know at the end of the reporting period, regarding matters for which the ultimate outcome is unknown. These judgments include changes in circumstances that may cause future assessments of credit risk to be materially different from current assessments, which could require an increase or a decrease in the ACL. The calculation of ECL includes the explicit incorporation of forecasts of future economic conditions. We have developed models incorporating specific macroeconomic variables that are relevant to each portfolio. Key economic variables for our retail portfolios include our primary operating markets of Canada, the United States and regional markets, where considered significant. Forecasts are developed internally by our Economics group, considering external data and our view of future economic conditions. We exercise experienced credit judgment to incorporate multiple economic forecasts, which are probability-weighted, in the determination of the final ECL. The allowance is sensitive to changes in both economic forecasts and the probability weight assigned to each forecast scenario.
Additional information regarding the ACL is included in Note 3.
| 52<br> BMO Financial Group Third Quarter Report 2025 |
|---|
Note 2: Securities
Classification of Securities
The following table summarizes the carrying amounts of the bank’s securities by classification:
| (Canadian $ in millions) | July 31, 2025 | October 31, 2024 | ||
|---|---|---|---|---|
| Trading securities (1) | $ | 175,072 | $ | 168,926 |
| Fair value through profit or loss securities (FVTPL) | ||||
| FVTPL securities mandatorily measured at fair value | 7,549 | 6,850 | ||
| FVTPL investment securities held by Insurance subsidiaries designated at fair value | 12,238 | 12,214 | ||
| Total FVTPL securities | 19,787 | 19,064 | ||
| Fair value through other comprehensive income (FVOCI) securities (2) | 106,420 | 93,702 | ||
| Amortized cost securities (3) | 98,479 | 115,188 | ||
| Total | $ | 399,758 | $ | 396,880 |
| (1) | Trading securities include interests of $32,913 million as at July 31, 2025 ($21,485 million as at October 31, 2024) in Collateralized Mortgage Obligations (CMO). We receive CMO in return for our sales of Mortgage Backed Securities (MBS) to certain structured vehicles that we do not consolidate. When we subsequently sell these CMO to third parties, but do not transfer substantially all risks and rewards of ownership to the third-party investor, or we maintain an interest in the sold instrument, we retain these CMO on our Consolidated Balance Sheet. Refer to Note 7 of our annual consolidated financial statements for the year ended October 31, 2024 for further discussion on these vehicles. | |||
| --- | --- | |||
| (2) | As these securities are presented at fair value on the Balance Sheet, ACL of $6 million ($4 million as at October 31, 2024) is included in Accumulated Other Comprehensive Income. | |||
| --- | --- | |||
| (3) | Amounts are net of ACL of $2 million ($3 million as at October 31, 2024). | |||
| --- | --- |
Amortized Cost Securities
The following table summarizes the carrying value and fair value of amortized cost debt securities:
| (Canadian $ in millions) | July 31, 2025 | October 31, 2024 | ||||||
|---|---|---|---|---|---|---|---|---|
| Carrying value | Fair value | Carrying value | Fair value | |||||
| Issued or guaranteed by: | ||||||||
| Canadian federal government | $ | 1,411 | $ | 1,403 | $ | 2,465 | $ | 2,403 |
| Canadian provincial and municipal governments | 6,520 | 6,544 | 4,488 | 4,216 | ||||
| U.S. federal government | 43,329 | 40,005 | 55,421 | 51,319 | ||||
| U.S. states, municipalities and agencies | 169 | 169 | 182 | 180 | ||||
| Other governments | 399 | 400 | 681 | 675 | ||||
| NHA MBS, U.S. agency MBS and CMO (1) | 38,858 | 35,164 | 42,773 | 38,619 | ||||
| Corporate debt | 7,793 | 7,535 | 9,178 | 9,049 | ||||
| Total | $ | 98,479 | $ | 91,220 | $ | 115,188 | $ | 106,461 |
| (1) | These amounts are either supported by insured mortgages or issued by U.S. agencies and government-sponsored enterprises. NHA refers to the National Housing Act. | |||||||
| --- | --- |
The carrying value of securities that are part of fair value hedging relationships are adjusted for related gains (losses) on hedge contracts.
Unrealized Gains and Losses on FVOCI Securities
The following table summarizes the unrealized gains and losses on FVOCI securities:
| (Canadian $ in millions) | July 31, 2025 | October 31, 2024 | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cost or<br>amortized<br>cost | Gross<br>unrealized<br>gains | Gross<br>unrealized<br>losses | Fair value | Cost or<br>amortized<br>cost | Gross<br>unrealized<br>gains | Gross<br>unrealized<br>losses | Fair value | |||||||||||
| Issued or guaranteed by: | ||||||||||||||||||
| Canadian federal government | $ | 42,595 | $ | 335 | $ | (18 | ) | $ | 42,912 | $ | 33,892 | $ | 303 | $ | (18 | ) | $ | 34,177 |
| Canadian provincial and municipal governments | 6,020 | 98 | (16 | ) | 6,102 | 5,939 | 82 | (25 | ) | 5,996 | ||||||||
| U.S. federal government | 18,862 | 183 | (90 | ) | 18,955 | 17,033 | 100 | (168 | ) | 16,965 | ||||||||
| U.S. states, municipalities and agencies | 5,153 | 31 | (64 | ) | 5,120 | 5,125 | 24 | (81 | ) | 5,068 | ||||||||
| Other governments | 3,819 | 25 | (4 | ) | 3,840 | 5,643 | 20 | (7 | ) | 5,656 | ||||||||
| NHA MBS, U.S. agency MBS and CMO | 25,018 | 161 | (284 | ) | 24,895 | 21,570 | 58 | (335 | ) | 21,293 | ||||||||
| Corporate debt | 4,406 | 19 | (19 | ) | 4,406 | 4,391 | 31 | (52 | ) | 4,370 | ||||||||
| Corporate equity | 162 | 28 | - | 190 | 135 | 42 | - | 177 | ||||||||||
| Total | $ | 106,035 | $ | 880 | $ | (495 | ) | $ | 106,420 | $ | 93,728 | $ | 660 | $ | (686 | ) | $ | 93,702 |
Unrealized gains (losses) may be offset by related (losses) gains on hedge contracts.
Interest Income on Debt Securities
The following table presents interest income calculated using the effective interest method:
| (Canadian $ in millions) | For the three months ended | For the nine months ended | ||||||
|---|---|---|---|---|---|---|---|---|
| July 31, 2025 | July 31, 2024 | July 31, 2025 | July 31, 2024 | |||||
| FVOCI securities | $ | 1,128 | $ | 946 | $ | 3,304 | $ | 2,789 |
| Amortized cost securities | 624 | 988 | 2,090 | 3,017 | ||||
| Total | $ | 1,752 | $ | 1,934 | $ | 5,394 | $ | 5,806 |
| BMO Financial Group Third Quarter Report 2025 <br>53 | ||||||||
| --- |
Non-Interest Revenue
Net gains and losses from securities, excluding gains and losses on trading securities, have been included in our Consolidated Statement of Income as follows:
| (Canadian $ in millions) | For the three months ended | For the nine months ended | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| July 31, 2025 | July 31, 2024 | July 31, 2025 | July 31, 2024 | |||||||
| FVTPL securities | $ | 36 | $ | 23 | $ | 132 | $ | 55 | ||
| FVOCI securities - net realized gains (1) | 13 | 26 | 42 | 89 | ||||||
| Impairment on FVOCI and amortized cost securities | - | - | (1 | ) | (1 | ) | ||||
| Securities gains, other than trading | $ | 49 | $ | 49 | $ | 173 | $ | 143 | ||
| (1) | Gains are net of (losses) on hedge contracts. | |||||||||
| --- | --- |
Interest and dividend income and gains on securities held in our Insurance business are recorded as a component of non-interest revenue, insurance investment results, in our Consolidated Statement of Income as follows:
| (Canadian $ in millions) | For the three months ended | For the nine months ended | ||||||
|---|---|---|---|---|---|---|---|---|
| July 31, 2025 | July 31, 2024 | July 31, 2025 | July 31, 2024 | |||||
| Interest and dividend income | $ | 137 | $ | 127 | $ | 406 | $ | 385 |
| Gains from securities designated at FVTPL (1) | 29 | 560 | 6 | 1,166 | ||||
| Realized gains from FVOCI securities | - | 1 | 2 | 1 | ||||
| Total interest and dividend income and gains held in our Insurance business | $ | 166 | $ | 688 | $ | 414 | $ | 1,552 |
| (1) | Gains (losses) on these securities may be offset by certain (losses) gains from changes in insurance-related liabilities. | |||||||
| --- | --- |
Note 3: Loans and Allowance for Credit Losses
Allowance for Credit Losses
The ACL recorded in our Consolidated Balance Sheet is maintained at a level we consider adequate to absorb credit-related losses on our loans and other credit instruments. The ACL amounted to $5,786 million as at July 31, 2025 ($4,936 million as at October 31, 2024) of which $5,165 million ($4,356 million as at October 31, 2024) was recorded in loans and $621 million ($580 million as at October 31, 2024) was recorded in other liabilities in our Consolidated Balance Sheet. Changes in gross balances, including originations, maturities, sales, write-offs and repayments in the normal course of operations, impact the ACL.
The following tables show the continuity in the loss allowance by product type for the three and nine months ended July 31, 2025 and July 31, 2024. Transfers represent the amount of ECL that moved between stages during the period, for example, moving from a 12-month (Stage 1) to lifetime (Stage 2) ECL measurement basis. Net remeasurements represent the ECL impact due to transfers between stages, as well as changes in economic forecasts and credit quality. Model changes include the ECL impact of new calculation models or methodologies.
| 54<br> BMO Financial Group Third Quarter Report 2025 | |||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Canadian in millions) | |||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| For the three months ended | July 31, 2024 | ||||||||||||||||||||||
| Stage 2 | Stage 3<br>(1) | Total | Stage 1 | Stage 2 | Stage 3 (1) | Total | |||||||||||||||||
| Loans: Residential mortgages | |||||||||||||||||||||||
| Balance as at beginning of period | 67 | $ | 194 | $ | 18 | $ | 279 | $ | 47 | $ | 209 | $ | 13 | $ | 269 | ||||||||
| Transfer to Stage 1 | 36 | (35 | ) | (1 | ) | - | 45 | (46 | ) | 1 | - | ||||||||||||
| Transfer to Stage 2 | (2 | ) | 11 | (9 | ) | - | (2 | ) | 6 | (4 | ) | - | |||||||||||
| Transfer to Stage 3 | - | (16 | ) | 16 | - | - | (5 | ) | 5 | - | |||||||||||||
| Net remeasurement of loss allowance | (52 | ) | (9 | ) | 8 | (53 | ) | (45 | ) | 31 | 12 | (2 | ) | ||||||||||
| Loan originations | 8 | - | - | 8 | 7 | - | - | 7 | |||||||||||||||
| Derecognitions and maturities | (2 | ) | (5 | ) | - | (7 | ) | - | (4 | ) | - | (4 | ) | ||||||||||
| Model changes | 23 | 24 | - | 47 | - | - | - | - | |||||||||||||||
| Total PCL (2) | 11 | (30 | ) | 14 | (5 | ) | 5 | (18 | ) | 14 | 1 | ||||||||||||
| Write-offs (3) | - | - | (2 | ) | (2 | ) | - | - | (1 | ) | (1 | ) | |||||||||||
| Recoveries of previous write-offs | - | - | 2 | 2 | - | - | 1 | 1 | |||||||||||||||
| Foreign exchange and other | 1 | 1 | (23 | ) | (21 | ) | 1 | 1 | (10 | ) | (8 | ) | |||||||||||
| Balance as at end of period | 79 | $ | 165 | $ | 9 | $ | 253 | $ | 53 | $ | 192 | $ | 17 | $ | 262 | ||||||||
| Loans: Consumer instalment and other personal | |||||||||||||||||||||||
| Balance as at beginning of period | 183 | $ | 545 | $ | 179 | $ | 907 | $ | 166 | $ | 394 | $ | 169 | $ | 729 | ||||||||
| Transfer to Stage 1 | 85 | (79 | ) | (6 | ) | - | 66 | (62 | ) | (4 | ) | - | |||||||||||
| Transfer to Stage 2 | (14 | ) | 28 | (14 | ) | - | (10 | ) | 24 | (14 | ) | - | |||||||||||
| Transfer to Stage 3 | (1 | ) | (45 | ) | 46 | - | (1 | ) | (35 | ) | 36 | - | |||||||||||
| Net remeasurement of loss allowance | (90 | ) | 55 | 121 | 86 | (51 | ) | 92 | 120 | 161 | |||||||||||||
| Loan originations | 8 | - | - | 8 | 11 | - | - | 11 | |||||||||||||||
| Derecognitions and maturities | (6 | ) | (10 | ) | - | (16 | ) | (5 | ) | (9 | ) | - | (14 | ) | |||||||||
| Model changes | 13 | 47 | - | 60 | - | - | - | - | |||||||||||||||
| Total PCL (2) | (5 | ) | (4 | ) | 147 | 138 | 10 | 10 | 138 | 158 | |||||||||||||
| Write-offs (3) | - | - | (181 | ) | (181 | ) | - | - | (157 | ) | (157 | ) | |||||||||||
| Recoveries of previous write-offs | - | - | 43 | 43 | - | - | 33 | 33 | |||||||||||||||
| Foreign exchange and other | - | - | (23 | ) | (23 | ) | 1 | - | (15 | ) | (14 | ) | |||||||||||
| Balance as at end of period | 178 | $ | 541 | $ | 165 | $ | 884 | $ | 177 | $ | 404 | $ | 168 | $ | 749 | ||||||||
| Loans: Credit cards | |||||||||||||||||||||||
| Balance as at beginning of period | 217 | $ | 508 | $ | - | $ | 725 | $ | 207 | $ | 383 | $ | - | $ | 590 | ||||||||
| Transfer to Stage 1 | 61 | (61 | ) | - | - | 56 | (56 | ) | - | - | |||||||||||||
| Transfer to Stage 2 | (22 | ) | 22 | - | - | (16 | ) | 16 | - | - | |||||||||||||
| Transfer to Stage 3 | (2 | ) | (116 | ) | 118 | - | (2 | ) | (83 | ) | 85 | - | |||||||||||
| Net remeasurement of loss allowance | (37 | ) | 203 | 81 | 247 | (41 | ) | 149 | 73 | 181 | |||||||||||||
| Loan originations | 11 | - | - | 11 | 21 | - | - | 21 | |||||||||||||||
| Derecognitions and maturities | (4 | ) | (20 | ) | - | (24 | ) | (2 | ) | (7 | ) | - | (9 | ) | |||||||||
| Model changes | - | - | - | - | - | - | - | - | |||||||||||||||
| Total PCL (2) | 7 | 28 | 199 | 234 | 16 | 19 | 158 | 193 | |||||||||||||||
| Write-offs (3) | - | - | (234 | ) | (234 | ) | - | - | (192 | ) | (192 | ) | |||||||||||
| Recoveries of previous write-offs | - | - | 55 | 55 | - | - | 48 | 48 | |||||||||||||||
| Foreign exchange and other | (1 | ) | - | (20 | ) | (21 | ) | (1 | ) | 1 | (14 | ) | (14 | ) | |||||||||
| Balance as at end of period | 223 | $ | 536 | $ | - | $ | 759 | $ | 222 | $ | 403 | $ | - | $ | 625 | ||||||||
| Loans: Business and government | |||||||||||||||||||||||
| Balance as at beginning of period | 902 | $ | 2,022 | $ | 781 | $ | 3,705 | $ | 884 | $ | 1,353 | $ | 653 | $ | 2,890 | ||||||||
| Transfer to Stage 1 | 154 | (139 | ) | (15 | ) | - | 91 | (86 | ) | (5 | ) | - | |||||||||||
| Transfer to Stage 2 | (37 | ) | 41 | (4 | ) | - | (63 | ) | 76 | (13 | ) | - | |||||||||||
| Transfer to Stage 3 | (2 | ) | (71 | ) | 73 | - | (2 | ) | (73 | ) | 75 | - | |||||||||||
| Net remeasurement of loss allowance | (148 | ) | 283 | 359 | 494 | (117 | ) | 242 | 461 | 586 | |||||||||||||
| Loan originations | 73 | - | - | 73 | 70 | - | - | 70 | |||||||||||||||
| Derecognitions and maturities | (39 | ) | (96 | ) | - | (135 | ) | (35 | ) | (67 | ) | - | (102 | ) | |||||||||
| Model changes | - | - | - | - | - | - | - | - | |||||||||||||||
| Total PCL (2) | 1 | 18 | 413 | 432 | (56 | ) | 92 | 518 | 554 | ||||||||||||||
| Write-offs (3) | - | - | (259 | ) | (259 | ) | - | - | (293 | ) | (293 | ) | |||||||||||
| Recoveries of previous write-offs | - | - | 80 | 80 | - | - | 24 | 24 | |||||||||||||||
| Foreign exchange and other | (2 | ) | 20 | (86 | ) | (68 | ) | (1 | ) | 16 | (76 | ) | (61 | ) | |||||||||
| Balance as at end of period | 901 | $ | 2,060 | $ | 929 | $ | 3,890 | $ | 827 | $ | 1,461 | $ | 826 | $ | 3,114 | ||||||||
| Total as at end of period | 1,381 | $ | 3,302 | $ | 1,103 | $ | 5,786 | $ | 1,279 | $ | 2,460 | $ | 1,011 | $ | 4,750 | ||||||||
| Comprising: Loans | 1,130 | $ | 2,980 | $ | 1,055 | $ | 5,165 | $ | 1,061 | $ | 2,230 | $ | 985 | $ | 4,276 | ||||||||
| Other credit instruments (4) | 251 | 322 | 48 | 621 | 218 | 230 | 26 | 474 |
All values are in US Dollars.
| (1) | Includes changes in the allowance for purchased credit impaired (PCI) loans. | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (2) | Excludes PCL on other assets of $(2) million for the three months ended July 31, 2025 ($nil million for the three months ended July 31, 2024). | ||||||||||||||||||||||
| --- | --- | ||||||||||||||||||||||
| (3) | Generally, we continue to seek recovery on amounts that were written off during the year, unless the loan is sold, we no longer have the right to collect or we have exhausted all reasonable efforts to collect. | ||||||||||||||||||||||
| --- | --- | ||||||||||||||||||||||
| (4) | Other credit instruments, including <br>off-balance<br> sheet items, are recorded in other liabilities in our Consolidated Balance Sheet. | ||||||||||||||||||||||
| --- | --- | ||||||||||||||||||||||
| BMO Financial Group Third Quarter Report 2025 <br>55 | |||||||||||||||||||||||
| --- | |||||||||||||||||||||||
| (Canadian in millions) | |||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| For the nine months ended | July 31, 2024 | ||||||||||||||||||||||
| Stage 2 | Stage 3<br>(1) | Total | Stage 1 | Stage 2 | Stage 3 (1) | Total | |||||||||||||||||
| Loans: Residential mortgages | |||||||||||||||||||||||
| Balance as at beginning of period | 56 | $ | 186 | $ | 19 | $ | 261 | $ | 73 | $ | 151 | $ | 10 | $ | 234 | ||||||||
| Transfer to Stage 1 | 118 | (116 | ) | (2 | ) | - | 98 | (98 | ) | - | - | ||||||||||||
| Transfer to Stage 2 | (7 | ) | 25 | (18 | ) | - | (24 | ) | 34 | (10 | ) | - | |||||||||||
| Transfer to Stage 3 | - | (34 | ) | 34 | - | - | (19 | ) | 19 | - | |||||||||||||
| Net remeasurement of loss allowance | (126 | ) | 92 | 26 | (8 | ) | (108 | ) | 138 | 24 | 54 | ||||||||||||
| Loan originations | 18 | - | - | 18 | 17 | - | - | 17 | |||||||||||||||
| Derecognitions and maturities | (3 | ) | (12 | ) | - | (15 | ) | (2 | ) | (9 | ) | - | (11 | ) | |||||||||
| Model changes | 23 | 24 | - | 47 | (1 | ) | (5 | ) | - | (6 | ) | ||||||||||||
| Total PCL (2) | 23 | (21 | ) | 40 | 42 | (20 | ) | 41 | 33 | 54 | |||||||||||||
| Write-offs (3) | - | - | (7 | ) | (7 | ) | - | - | (4 | ) | (4 | ) | |||||||||||
| Recoveries of previous write-offs | - | - | 6 | 6 | - | - | 4 | 4 | |||||||||||||||
| Foreign exchange and other | - | - | (49 | ) | (49 | ) | - | - | (26 | ) | (26 | ) | |||||||||||
| Balance as at end of period | 79 | $ | 165 | $ | 9 | $ | 253 | $ | 53 | $ | 192 | $ | 17 | $ | 262 | ||||||||
| Loans: Consumer instalment and other personal | |||||||||||||||||||||||
| Balance as at beginning of period | 197 | $ | 471 | $ | 175 | $ | 843 | $ | 220 | $ | 434 | $ | 152 | $ | 806 | ||||||||
| Transfer to Stage 1 | 232 | (216 | ) | (16 | ) | - | 237 | (225 | ) | (12 | ) | - | |||||||||||
| Transfer to Stage 2 | (42 | ) | 81 | (39 | ) | - | (31 | ) | 66 | (35 | ) | - | |||||||||||
| Transfer to Stage 3 | (5 | ) | (130 | ) | 135 | - | (5 | ) | (100 | ) | 105 | - | |||||||||||
| Net remeasurement of loss allowance | (225 | ) | 319 | 367 | 461 | (202 | ) | 209 | 322 | 329 | |||||||||||||
| Loan originations | 24 | - | - | 24 | 44 | - | - | 44 | |||||||||||||||
| Derecognitions and maturities | (15 | ) | (29 | ) | - | (44 | ) | (12 | ) | (25 | ) | (11 | ) | (48 | ) | ||||||||
| Model changes | 13 | 47 | - | 60 | 15 | 46 | - | 61 | |||||||||||||||
| Total PCL (2) | (18 | ) | 72 | 447 | 501 | 46 | (29 | ) | 369 | 386 | |||||||||||||
| Write-offs (3) | - | - | (519 | ) | (519 | ) | - | - | (472 | ) | (472 | ) | |||||||||||
| Recoveries of previous write-offs | - | - | 115 | 115 | - | - | 156 | 156 | |||||||||||||||
| Foreign exchange and other | (1 | ) | (2 | ) | (53 | ) | (56 | ) | (89 | ) | (1 | ) | (37 | ) | (127 | ) | |||||||
| Balance as at end of period | 178 | $ | 541 | $ | 165 | $ | 884 | $ | 177 | $ | 404 | $ | 168 | $ | 749 | ||||||||
| Loans: Credit cards | |||||||||||||||||||||||
| Balance as at beginning of period | 233 | $ | 472 | $ | - | $ | 705 | $ | 188 | $ | 308 | $ | - | $ | 496 | ||||||||
| Transfer to Stage 1 | 185 | (185 | ) | - | - | 172 | (172 | ) | - | - | |||||||||||||
| Transfer to Stage 2 | (68 | ) | 68 | - | - | (43 | ) | 43 | - | - | |||||||||||||
| Transfer to Stage 3 | (6 | ) | (335 | ) | 341 | - | (4 | ) | (199 | ) | 203 | - | |||||||||||
| Net remeasurement of loss allowance | (152 | ) | 567 | 241 | 656 | (146 | ) | 434 | 235 | 523 | |||||||||||||
| Loan originations | 44 | - | - | 44 | 58 | - | - | 58 | |||||||||||||||
| Derecognitions and maturities | (10 | ) | (39 | ) | - | (49 | ) | (6 | ) | (20 | ) | - | (26 | ) | |||||||||
| Model changes | - | - | - | - | 4 | 9 | - | 13 | |||||||||||||||
| Total PCL (2) | (7 | ) | 76 | 582 | 651 | 35 | 95 | 438 | 568 | ||||||||||||||
| Write-offs (3) | - | - | (687 | ) | (687 | ) | - | - | (523 | ) | (523 | ) | |||||||||||
| Recoveries of previous write-offs | - | - | 164 | 164 | - | - | 123 | 123 | |||||||||||||||
| Foreign exchange and other | (3 | ) | (12 | ) | (59 | ) | (74 | ) | (1 | ) | - | (38 | ) | (39 | ) | ||||||||
| Balance as at end of period | 223 | $ | 536 | $ | - | $ | 759 | $ | 222 | $ | 403 | $ | - | $ | 625 | ||||||||
| Loans: Business and government | |||||||||||||||||||||||
| Balance as at beginning of period | 892 | $ | 1,698 | $ | 537 | $ | 3,127 | $ | 1,043 | $ | 1,155 | $ | 533 | $ | 2,731 | ||||||||
| Transfer to Stage 1 | 406 | (370 | ) | (36 | ) | - | 478 | (458 | ) | (20 | ) | - | |||||||||||
| Transfer to Stage 2 | (207 | ) | 279 | (72 | ) | - | (237 | ) | 268 | (31 | ) | - | |||||||||||
| Transfer to Stage 3 | (6 | ) | (291 | ) | 297 | - | (6 | ) | (226 | ) | 232 | - | |||||||||||
| Net remeasurement of loss allowance | (291 | ) | 989 | 1,139 | 1,837 | (551 | ) | 851 | 949 | 1,249 | |||||||||||||
| Loan originations | 219 | - | - | 219 | 217 | 8 | - | 225 | |||||||||||||||
| Derecognitions and maturities | (107 | ) | (280 | ) | - | (387 | ) | (119 | ) | (231 | ) | (11 | ) | (361 | ) | ||||||||
| Model changes | - | - | - | - | 53 | 57 | - | 110 | |||||||||||||||
| Total PCL (2) | 14 | 327 | 1,328 | 1,669 | (165 | ) | 269 | 1,119 | 1,223 | ||||||||||||||
| Write-offs (3) | - | - | (883 | ) | (883 | ) | - | - | (737 | ) | (737 | ) | |||||||||||
| Recoveries of previous write-offs | - | - | 234 | 234 | - | - | 114 | 114 | |||||||||||||||
| Foreign exchange and other | (5 | ) | 35 | (287 | ) | (257 | ) | (51 | ) | 37 | (203 | ) | (217 | ) | |||||||||
| Balance as at end of period | 901 | $ | 2,060 | $ | 929 | $ | 3,890 | $ | 827 | $ | 1,461 | $ | 826 | $ | 3,114 | ||||||||
| Total as at end of period | 1,381 | $ | 3,302 | $ | 1,103 | $ | 5,786 | $ | 1,279 | $ | 2,460 | $ | 1,011 | $ | 4,750 | ||||||||
| Comprising: Loans | 1,130 | $ | 2,980 | $ | 1,055 | $ | 5,165 | $ | 1,061 | $ | 2,230 | $ | 985 | $ | 4,276 | ||||||||
| Other credit instruments (4) | 251 | 322 | 48 | 621 | 218 | 230 | 26 | 474 |
All values are in US Dollars.
| (1) | Includes changes in the allowance for PCI loans. |
|---|---|
| (2) | Excludes PCL on other assets of $(1) million for the nine months ended July 31, 2025 ($7 million for the nine months ended July 31, 2024). |
| --- | --- |
| (3) | Generally, we continue to seek recovery on amounts that were written off during the year, unless the loan is sold, we no longer have the right to collect or we have exhausted all reasonable efforts to collect. |
| --- | --- |
| (4) | Other credit instruments, including <br>off-balance<br> sheet items, are recorded in other liabilities in our Consolidated Balance Sheet. |
| --- | --- |
| 56<br> BMO Financial Group Third Quarter Report 2025 | |
| --- |
Credit Risk Exposure
The following table sets out our credit risk exposure for all loans carried at amortized cost, FVOCI or FVTPL as at July 31, 2025 and October 31, 2024. Stage 1 represents performing loans carried with up to a 12-month ECL, Stage 2 represents performing loans carried with a lifetime ECL, and Stage 3 represents loans with a lifetime ECL that are credit impaired.
| (Canadian in millions) | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| For the three months ended | October 31, 2024 | ||||||||||||||
| Stage 2 | Stage 3<br>(1) | Total | Stage 1 | Stage 2 | Stage 3 (1) | Total | |||||||||
| Loans: Residential mortgages (2) | |||||||||||||||
| Exceptionally low | - | $ | - | $ | - | $ | - | $ | 1 | $ | - | $ | - | $ | 1 |
| Very low | 95,121 | 135 | - | 95,256 | 86,730 | 5,631 | - | 92,361 | |||||||
| Low | 57,789 | 9,568 | - | 67,357 | 52,111 | 15,080 | - | 67,191 | |||||||
| Medium | 9,072 | 4,809 | - | 13,881 | 7,402 | 5,329 | - | 12,731 | |||||||
| High | 306 | 2,919 | - | 3,225 | 268 | 2,622 | - | 2,890 | |||||||
| Not rated (3) | 13,739 | 935 | - | 14,674 | 14,207 | 1,042 | - | 15,249 | |||||||
| Impaired | - | - | 814 | 814 | - | - | 657 | 657 | |||||||
| Gross residential mortgages | 176,027 | 18,366 | 814 | 195,207 | 160,719 | 29,704 | 657 | 191,080 | |||||||
| ACL | 79 | 164 | 9 | 252 | 56 | 185 | 10 | 251 | |||||||
| Carrying amount | 175,948 | 18,202 | 805 | 194,955 | 160,663 | 29,519 | 647 | 190,829 | |||||||
| Loans: Consumer instalment and other personal | |||||||||||||||
| Exceptionally low | 9,523 | 66 | - | 9,589 | 9,162 | 145 | - | 9,307 | |||||||
| Very low | 21,049 | 224 | - | 21,273 | 20,466 | 903 | - | 21,369 | |||||||
| Low | 27,422 | 2,773 | - | 30,195 | 26,125 | 4,575 | - | 30,700 | |||||||
| Medium | 6,923 | 5,492 | - | 12,415 | 7,405 | 5,526 | - | 12,931 | |||||||
| High | 695 | 2,152 | - | 2,847 | 789 | 2,017 | - | 2,806 | |||||||
| Not rated (3) | 14,688 | 963 | - | 15,651 | 14,522 | 475 | - | 14,997 | |||||||
| Impaired | - | - | 614 | 614 | - | - | 577 | 577 | |||||||
| Gross consumer instalment and other personal | 80,300 | 11,670 | 614 | 92,584 | 78,469 | 13,641 | 577 | 92,687 | |||||||
| ACL | 164 | 516 | 165 | 845 | 183 | 447 | 168 | 798 | |||||||
| Carrying amount | 80,136 | 11,154 | 449 | 91,739 | 78,286 | 13,194 | 409 | 91,889 | |||||||
| Loans: Credit cards (4) | |||||||||||||||
| Exceptionally low | 1,668 | - | - | 1,668 | 1,660 | - | - | 1,660 | |||||||
| Very low | 2,179 | 2 | - | 2,181 | 2,166 | 1 | - | 2,167 | |||||||
| Low | 1,947 | 52 | - | 1,999 | 2,110 | 60 | - | 2,170 | |||||||
| Medium | 4,224 | 846 | - | 5,070 | 4,544 | 824 | - | 5,368 | |||||||
| High | 682 | 1,000 | - | 1,682 | 746 | 922 | - | 1,668 | |||||||
| Not rated (3) | 267 | 117 | - | 384 | 430 | 149 | - | 579 | |||||||
| Impaired | - | - | - | - | - | - | - | - | |||||||
| Gross credit cards | 10,967 | 2,017 | - | 12,984 | 11,656 | 1,956 | - | 13,612 | |||||||
| ACL | 156 | 468 | - | 624 | 161 | 421 | - | 582 | |||||||
| Carrying amount | 10,811 | 1,549 | - | 12,360 | 11,495 | 1,535 | - | 13,030 | |||||||
| Loans: Business and government (2) (5) | |||||||||||||||
| Acceptable | |||||||||||||||
| Investment grade | 187,325 | 2,979 | - | 190,304 | 191,742 | 3,437 | - | 195,179 | |||||||
| Sub-investment grade | 138,728 | 24,380 | - | 163,108 | 147,713 | 15,078 | - | 162,791 | |||||||
| Watchlist | 146 | 22,894 | - | 23,040 | 238 | 22,535 | - | 22,773 | |||||||
| Impaired | - | - | 5,523 | 5,523 | - | - | 4,609 | 4,609 | |||||||
| Gross business and government | 326,199 | 50,253 | 5,523 | 381,975 | 339,693 | 41,050 | 4,609 | 385,352 | |||||||
| ACL | 731 | 1,832 | 881 | 3,444 | 743 | 1,507 | 475 | 2,725 | |||||||
| Carrying amount | 325,468 | 48,421 | 4,642 | 378,531 | 338,950 | 39,543 | 4,134 | 382,627 | |||||||
| Total gross loans and acceptances | 593,493 | 82,306 | 6,951 | 682,750 | 590,537 | 86,351 | 5,843 | 682,731 | |||||||
| Total net loans and acceptances | 592,363 | 79,326 | 5,896 | 677,585 | 589,394 | 83,791 | 5,190 | 678,375 | |||||||
| Commitments and financial guarantee contracts | |||||||||||||||
| Acceptable | |||||||||||||||
| Investment grade | 199,241 | 910 | - | 200,151 | 198,132 | 787 | - | 198,919 | |||||||
| Sub-investment grade | 60,021 | 14,756 | - | 74,777 | 68,177 | 6,647 | - | 74,824 | |||||||
| Watchlist | 7 | 8,405 | - | 8,412 | 59 | 8,765 | - | 8,824 | |||||||
| Impaired | - | - | 1,594 | 1,594 | - | - | 1,373 | 1,373 | |||||||
| Gross commitments and financial guarantee contracts | 259,269 | 24,071 | 1,594 | 284,934 | 266,368 | 16,199 | 1,373 | 283,940 | |||||||
| ACL | 251 | 322 | 48 | 621 | 235 | 267 | 78 | 580 | |||||||
| Carrying amount (6) (7) | 259,018 | $ | 23,749 | $ | 1,546 | $ | 284,313 | $ | 266,133 | $ | 15,932 | $ | 1,295 | $ | 283,360 |
All values are in US Dollars.
| (1) | Includes PCI loans. |
|---|---|
| (2) | Includes $70 million ($163 million as at October 31, 2024) of residential mortgages and $14,269 million ($12,431 million as at October 31, 2024) of business and government loans that are classified and measured at FVTPL and not subject to ECL. |
| --- | --- |
| (3) | Includes purchased portfolios and certain cases where an internal risk rating is not assigned. Alternative credit risk assessments, rating methodologies, policies and tools are used to manage credit risk for these portfolios. |
| --- | --- |
| (4) | Credit card loans are immediately written off when principal or interest payments are 180 days past due, and as a result are not reported as impaired in Stage 3. |
| --- | --- |
| (5) | Includes customers’ liability under acceptances. |
| --- | --- |
| (6) | Represents the total contractual amounts of undrawn credit facilities and other <br>off-balance<br> sheet exposures, excluding personal lines of credit and credit cards that are unconditionally cancellable at our discretion. |
| --- | --- |
| (7) | Certain commercial borrower commitments are conditional and may include recourse to counterparties. |
| --- | --- |
| BMO Financial Group Third Quarter Report 2025 <br>57 | |
| --- |
Loans Past Due Not Impaired
Loans that are past due but not classified as impaired are loans where our customers have failed to make payments when contractually due but for which we expect the full amount of principal and interest payments to be collected. The following table presents loans that are past due but not classified as impaired as at July 31, 2025 and October 31, 2024. Loans less than 30 days past due are excluded as they are not generally representative of the borrower’s ability to meet their payment obligations.
| (Canadian $ in millions) | July 31, 2025 | October 31, 2024 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 30 to 89 days | 90 days or more<br>(1) | Total | 30 to 89 days | 90 days or more (1) | Total | |||||||
| Residential mortgages | $ | 814 | $ | 11 | $ | 825 | $ | 696 | $ | 15 | $ | 711 |
| Credit cards, consumer instalment and other personal | 682 | 167 | 849 | 734 | 173 | 907 | ||||||
| Business and government | 453 | 10 | 463 | 689 | 16 | 705 | ||||||
| Total | $ | 1,949 | $ | 188 | $ | 2,137 | $ | 2,119 | $ | 204 | $ | 2,323 |
| (1) | Fully secured loans with amounts between 90 and 180 days past due that we have not classified as impaired totalled $12 million as at July 31, 2025 ($16 million as at October 31, 2024). | |||||||||||
| --- | --- |
ECL Sensitivity and Key Economic Variables
The ECL model requires the recognition of credit losses generally based on 12 months of expected losses for performing loans and the recognition of lifetime losses on performing loans that have experienced a significant increase in credit risk since origination.
The allowance for performing loans is sensitive to changes in both economic forecasts and the probability weight assigned to each forecast scenario. Many of the factors have a high degree of interdependency, although there is no single factor to which loan loss allowances as a whole are sensitive.
The upside scenario as at July 31, 2025 assumes a stronger economic environment than the base case forecast, with lower unemployment rates.
As at July 31, 2025, our base case scenario depicts an economic environment with higher unemployment rates in the near term, largely in response to the trade war, and a moderate economic recovery over the medium term as trade policy uncertainty diminishes and interest rates decline further. Our base case forecast as at October 31, 2024 broadly depicted a stronger economic environment.
If we assumed a 100% weight on the base case forecast and included the impact of loan migration by restaging, with other assumptions held constant, including the application of experienced credit judgment, the allowance on performing loans would be approximately $3,125 million as at July 31, 2025 ($2,625 million as at October 31, 2024), compared to the reported allowance for performing loans of $4,683 million ($4,205 million as at October 31, 2024).
As at July 31, 2025, our downside scenario involves a sharp contraction in the Canadian and U.S. economies in the near term, followed by a relatively slow recovery. Our severe downside scenario depicts an even deeper contraction in the Canadian and U.S. economies than in the downside scenario. The severe downside scenario as at October 31, 2024 broadly depicted a similar economic environment over the projection period. If we assumed a 100% weight on the severe downside forecast and included the impact of loan migration by restaging, with other assumptions held constant, including the application of experienced credit judgment, the allowance on performing loans would be approximately $7,850 million as at July 31, 2025 ($7,500 million as at October 31, 2024), compared to the reported allowance for performing loans of $4,683 million ($4,205 million as at October 31, 2024).
Actual results in a recession will differ as our portfolio will change through time due to migration, growth, changes in geopolitical risks, risk mitigation actions and other factors. In addition, our allowance will reflect the four economic scenarios used in assessing the allowance, with often unequal weightings attached to each scenario, which can change through time.
The following tables show the key economic variables used to estimate the allowance for performing loans forecast over the next 12 months or lifetime measurement period. The variables as at July 31, 2025 include the impact of tariffs and trade policy uncertainty on the economic outlook. While the values disclosed below are national variables, we use regional variables in the underlying models and consider factors impacting particular industries where appropriate.
| As at July 31, 2025 | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Scenarios | ||||||||||||||||
| All figures are average annual values | Upside | Base | Downside | Severe downside | ||||||||||||
| First 12<br> months | Remaining<br> horizon<br>(1) | First 12<br> months | Remaining<br> horizon<br>(1) | First 12<br> months | Remaining<br> horizon<br>(1) | First 12<br> months | Remaining<br> horizon<br>(1) | |||||||||
| Real GDP growth rates (2) | ||||||||||||||||
| Canada | 4.1% | 2.8% | 0.8% | 2.0% | (2.4)% | 1.7% | (3.6)% | 1.2% | ||||||||
| United States | 4.1% | 2.4% | 1.3% | 1.8% | (2.5)% | 1.4% | (3.8)% | 1.3% | ||||||||
| Corporate BBB <br>10-year<br> spread | ||||||||||||||||
| Canada | 1.3% | 1.8% | 1.9% | 2.0% | 3.5% | 3.0% | 4.2% | 3.5% | ||||||||
| United States | 1.1% | 1.6% | 1.8% | 2.0% | 3.6% | 3.1% | 4.6% | 3.6% | ||||||||
| Unemployment rates | ||||||||||||||||
| Canada | 5.4% | 4.9% | 7.6% | 6.9% | 9.4% | 9.5% | 9.9% | 10.5% | ||||||||
| United States | 3.5% | 3.0% | 4.5% | 4.3% | 6.7% | 7.4% | 7.4% | 8.3% | ||||||||
| Housing Price Index (2) | ||||||||||||||||
| Canada (3) | 3.5% | 5.6% | (0.9)% | 3.2% | (11.2)% | (0.9)% | (19.3)% | (5.0)% | ||||||||
| United States (4) | 4.5% | 3.8% | 1.4% | 2.4% | (11.0)% | (1.2)% | (19.2)% | (4.3)% | ||||||||
| (1) | The remaining forecast period is two years. | |||||||||||||||
| --- | --- | |||||||||||||||
| (2) | Real gross domestic product (GDP) and housing price index are averages of quarterly year-over-year growth rates. | |||||||||||||||
| --- | --- | |||||||||||||||
| (3) | In Canada, we use the Housing Price Index Benchmark Composite. | |||||||||||||||
| --- | --- | |||||||||||||||
| (4) | In the United States, we use the National Case-Shiller House Price Index. | |||||||||||||||
| --- | --- | |||||||||||||||
| 58<br> BMO Financial Group Third Quarter Report 2025 | ||||||||||||||||
| --- |
| As at October 31, 2024 | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Scenarios | ||||||||||||||||
| All figures are average annual values | Upside | Base | Downside | Severe downside | ||||||||||||
| First 12<br> months | Remaining<br> horizon (1) | First 12<br> months | Remaining<br> horizon (1) | First 12<br> months | Remaining<br> horizon (1) | First 12<br> months | Remaining<br> horizon (1) | |||||||||
| Real GDP growth rates (2) | ||||||||||||||||
| Canada | 4.6% | 2.6% | 1.8% | 1.9% | (2.3)% | 1.3% | (3.6)% | 1.2% | ||||||||
| United States | 4.3% | 2.4% | 1.9% | 1.9% | (2.1)% | 1.4% | (3.4)% | 1.3% | ||||||||
| Corporate BBB <br>10-year<br> spread | ||||||||||||||||
| Canada | 1.3% | 1.8% | 1.9% | 2.0% | 3.6% | 3.0% | 4.2% | 3.5% | ||||||||
| United States | 0.9% | 1.6% | 1.6% | 2.0% | 3.4% | 3.1% | 4.6% | 3.6% | ||||||||
| Unemployment rates | ||||||||||||||||
| Canada | 5.3% | 4.8% | 7.0% | 6.8% | 8.8% | 9.4% | 9.8% | 10.5% | ||||||||
| United States | 3.4% | 3.0% | 4.7% | 4.4% | 6.7% | 7.3% | 7.6% | 8.4% | ||||||||
| Housing Price Index (2) | ||||||||||||||||
| Canada (3) | 5.9% | 5.4% | 1.6% | 3.0% | (10.9)% | (1.0)% | (19.0)% | (5.0)% | ||||||||
| United States (4) | 5.9% | 4.0% | 2.8% | 2.6% | (9.6)% | (1.0)% | (19.3)% | (4.3)% | ||||||||
| (1) | The remaining forecast period is two years. | |||||||||||||||
| --- | --- | |||||||||||||||
| (2) | Real gross domestic product (GDP) and housing price index are averages of quarterly year-over-year growth rates. | |||||||||||||||
| --- | --- | |||||||||||||||
| (3) | In Canada, we use the Housing Price Index Benchmark Composite. | |||||||||||||||
| --- | --- | |||||||||||||||
| (4) | In the United States, we use the National Case-Shiller House Price Index. | |||||||||||||||
| --- | --- |
The ECL approach requires the recognition of credit losses generally based on 12 months of expected losses for performing loans (Stage 1) and the recognition of lifetime expected losses for performing loans that have experienced a significant increase in credit risk since origination (Stage 2). Under our current probability-weighted scenarios, if all of our performing loans were in Stage 1, our models would generate an allowance for performing loans of approximately $3,450 million ($3,050 million as at October 31, 2024), compared to the reported allowance for performing loans of $4,683 million ($4,205 million as at October 31, 2024).
Note 4: Deposits and Subordinated Debt
Deposits
| Payable on demand | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Canadian $ in millions) | Interest bearing | Non-interest<br><br> bearing | Payable<br> after notice<br>(1) | Payable on a<br> fixed date<br>(2) (3) | July 31, 2025 | October 31, 2024 | ||||||
| Amortized cost deposits by: | ||||||||||||
| Banks (4) | $ | 4,865 | $ | 1,996 | $ | 1,541 | $ | 22,631 | $ | 31,033 | $ | 32,546 |
| Business and government | 74,618 | 42,936 | 208,601 | 231,255 | 557,410 | 575,019 | ||||||
| Individuals | 3,849 | 36,791 | 150,306 | 121,198 | 312,144 | 320,767 | ||||||
| Total amortized cost deposits | 83,332 | 81,723 | 360,448 | 375,084 | 900,587 | 928,332 | ||||||
| Deposits at FVTPL | - | - | - | 54,776 | 54,776 | 54,108 | ||||||
| Total (5) | $ | 83,332 | $ | 81,723 | $ | 360,448 | $ | 429,860 | $ | 955,363 | $ | 982,440 |
| Booked in: | ||||||||||||
| Canada | $ | 72,808 | $ | 69,207 | $ | 160,616 | $ | 300,146 | $ | 602,777 | $ | 618,141 |
| United States | 10,416 | 12,516 | 198,172 | 81,559 | 302,663 | 314,066 | ||||||
| Other countries | 108 | - | 1,660 | 48,155 | 49,923 | 50,233 | ||||||
| Total | $ | 83,332 | $ | 81,723 | $ | 360,448 | $ | 429,860 | $ | 955,363 | $ | 982,440 |
| (1) | Includes $42,150 million of <br>non-interest<br> bearing deposits as at July 31, 2025 ($44,617 million as at October 31, 2024). | |||||||||||
| --- | --- | |||||||||||
| (2) | Includes $58,475 million of senior unsecured debt as at July 31, 2025 subject to the Bank Recapitalization <br>(Bail-In)<br> regime ($65,986 million as at October 31, 2024). The <br>Bail-In<br> regime provides certain statutory powers to the Canada Deposit Insurance Corporation, including the ability to convert specified eligible shares and liabilities into common shares if the bank becomes <br>non-viable. | |||||||||||
| --- | --- | |||||||||||
| (3) | Deposits totalling $28,271 million as at July 31, 2025 ($29,136 million as at October 31, 2024) can be redeemed early, either fully or partially, by customers without penalty. These are classified as payable on a fixed date, based on their remaining contractual maturities. | |||||||||||
| --- | --- | |||||||||||
| (4) | Includes regulated and central banks. | |||||||||||
| --- | --- | |||||||||||
| (5) | Includes $496,501 million of deposits denominated in U.S. dollars as at July 31, 2025 ($521,160 million as at October 31, 2024), and $55,040 million of deposits denominated in other foreign currencies ($54,397 million as at October 31, 2024). | |||||||||||
| --- | --- |
The following table presents deposits payable on a fixed date and greater than one hundred thousand dollars:
| (Canadian $ in millions) | Canada | United States | Other | Total | |
|---|---|---|---|---|---|
| As at July 31, 2025 | $ 252,634 | $ 72,353 | $ 48,155 | $ | 373,142 |
| As at October 31, 2024 | 285,555 | 77,313 | 48,086 | 410,954 |
The following table presents the maturity schedule for deposits payable on a fixed date greater than one hundred thousand dollars, which are booked in Canada:
| (Canadian $ in millions) | Less than 3 months | 3 to 6 months | 6 to 12 months | Over 12 months | Total | |
|---|---|---|---|---|---|---|
| As at July 31, 2025 | $ 51,573 | $ 30,973 | $ 51,394 | $ 118,694 | $ | 252,634 |
| As at October 31, 2024 | 63,442 | 33,704 | 62,674 | 125,735 | 285,555 | |
| BMO Financial Group Third Quarter Report 2025 <br>59 | ||||||
| --- |
Subordinated Debt
On June 17, 2025, we redeemed all of our $1,250 million 2.077% Series J Medium-Term Notes (NVCC) Second Tranche, at a redemption price of 100% of the principal amount plus accrued and unpaid interest to, but excluding, the redemption date.
On March 5, 2025, we issued $1,250 million of 4.077% Series N Medium-Term Notes First Tranche (NVCC) through our Canadian Medium-Term Note Program. The notes will reset to a floating rate on March 5, 2030.
Note 5: Insurance
Insurance Results
Insurance service results in our Consolidated Statement of Income are as follows:
| (Canadian $ in millions) | For the three months ended | For the nine months ended | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| July 31, 2025 | July 31, 2024 | July 31, 2025 | July 31, 2024 | |||||||||
| Insurance revenue | $ | 486 | $ | 440 | $ | 1,430 | $ | 1,307 | ||||
| Insurance service expenses | (399 | ) | (317 | ) | (1,089 | ) | (919 | ) | ||||
| Net expenses from reinsurance contracts | 2 | (23 | ) | (38 | ) | (90 | ) | |||||
| Insurance service results | $ | 89 | $ | 100 | $ | 303 | $ | 298 |
Insurance investment results in our Consolidated Statement of Income are as follows:
| (Canadian $ in millions) | For the three months ended | For the nine months ended | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| July 31, 2025 | July 31, 2024 | July 31, 2025 | July 31, 2024 | |||||||||
| Investment return | $ | 132 | $ | 978 | $ | 433 | $ | 2,046 | ||||
| Insurance finance (expense) from insurance and reinsurance contracts held | (120 | ) | (899 | ) | (332 | ) | (1,911 | ) | ||||
| Movement in investment contract liabilities | 17 | (62 | ) | (16 | ) | (102 | ) | |||||
| Insurance investment results | $ | 29 | $ | 17 | $ | 85 | $ | 33 |
Insurance Contract Liabilities
Insurance contract liabilities by remaining coverage and incurred claims comprise the following:
| (Canadian $ in millions) | For the three months ended July 31, 2025 | For the three months ended July 31, 2024 | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Liabilities for<br> remaining coverage | Liabilities for<br> incurred claims | Total | Liabilities for<br> remaining coverage | Liabilities for<br><br>incurred claims | Total | |||||||||||||
| Insurance contract liabilities, beginning of period | $ | 17,629 | $ | 187 | $ | 17,816 | $ | 14,877 | $ | 214 | $ | 15,091 | ||||||
| Insurance service results | (632 | ) | 565 | (67 | ) | (388 | ) | 289 | (99 | ) | ||||||||
| Net finance expenses from insurance contracts | 138 | - | 138 | 959 | - | 959 | ||||||||||||
| Total cash flows | 807 | (563 | ) | 244 | 318 | (298 | ) | 20 | ||||||||||
| Other changes in the net carrying amount of the insurance contract (1) | (785 | ) | (12 | ) | (797 | ) | - | - | - | |||||||||
| Insurance contract liabilities, end of period (2) | $ | 17,157 | $ | 177 | $ | 17,334 | $ | 15,766 | $ | 205 | $ | 15,971 | ||||||
| (Canadian $ in millions) | For the nine months ended July 31, 2025 | For the nine months ended July 31, 2024 | ||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Liabilities for<br> remaining coverage | Liabilities for<br> incurred claims | Total | Liabilities for<br> remaining coverage | Liabilities for<br><br>incurred claims | Total | |||||||||||||
| Insurance contract liabilities, beginning of period | $ | 17,047 | $ | 201 | $ | 17,248 | $ | 13,114 | $ | 235 | $ | 13,349 | ||||||
| Insurance service results | (1,818 | ) | 1,537 | (281 | ) | (1,171 | ) | 842 | (329 | ) | ||||||||
| Net finance expenses from insurance contracts | 420 | - | 420 | 2,031 | - | 2,031 | ||||||||||||
| Total cash flows | 2,293 | (1,546 | ) | 747 | 1,792 | (871 | ) | 921 | ||||||||||
| Other changes in the net carrying amount of the insurance contract (1) | (785 | ) | (15 | ) | (800 | ) | - | (1 | ) | (1 | ) | |||||||
| Insurance contract liabilities, end of period (2) | $ | 17,157 | $ | 177 | $ | 17,334 | $ | 15,766 | $ | 205 | $ | 15,971 | ||||||
| (1) | Includes $(798) million relating to the sale of a non-strategic portfolio of insurance contracts for the three and nine months ended July 31, 2025. | |||||||||||||||||
| --- | --- | |||||||||||||||||
| (2) | The liabilities for incurred claims relating to insurance contracts in our creditor and reinsurance business were $105 million as at July 31, 2025 and $110 million as at July 31, 2024. | |||||||||||||||||
| --- | --- |
Contractual service margin (CSM) from contracts issued was $18 million and $49 million for the three and nine months ended July 31, 2025, respectively ($13 million and $73 million for the three and nine months ended July 31, 2024, respectively). Total CSM as at July 31, 2025 was $1,460 million ($1,550 million as at October 31, 2024). This excludes the impact of any reinsurance held, which is not significant to the bank. Onerous contract losses for the three and nine months ended July 31, 2025 and 2024 were not material.
| 60<br> BMO Financial Group Third Quarter Report 2025 |
|---|
We use the following rates for discounting fulfilment cash flows for our insurance contract liabilities, which are based on a risk-free yield adjusted for an illiquidity premium that reflects the liquidity characteristics of the liabilities:
| Portfolio duration: | July 31, 2025 | October 31, 2024 | ||
|---|---|---|---|---|
| 1 year | 3.55% | 4.16% | ||
| 3 years | 3.86% | 4.17% | ||
| 5 years | 4.18% | 4.35% | ||
| 10 years | 4.87% | 4.82% | ||
| 20 years | 5.36% | 5.15% | ||
| 30 years | 5.23% | 4.98% | ||
| Ultimate | 5.00% | 5.00% |
Note 6: Equity
Preferred and Common Shares Outstanding and Other Equity Instruments
(1)
| (Canadian $ in millions, except as noted) | July 31, 2025 | October 31, 2024 | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Number<br> of shares | Amount | Dividends declared<br> per share<br>(2) | Number of<br> shares | Amount | Dividends declared<br> per share (2) | Convertible into | |||||||||
| Preferred Shares - Classified as Equity | |||||||||||||||
| Class B – Series 31 | - | $ | - | $ | - | 12,000,000 | $ | 300 | $ | 0.96 | Class B - Series 32 | (3) (4) | |||
| Class B – Series 33 | 8,000,000 | 200 | 0.57 | 8,000,000 | 200 | 0.76 | Class B - Series 34 | (3) (4) | |||||||
| Class B – Series 44 | 16,000,000 | 400 | 1.28 | 16,000,000 | 400 | 1.70 | Class B - Series 45 | (3) (4) | |||||||
| Class B – Series 50 | 500,000 | 500 | 36.87 | 500,000 | 500 | 73.73 | Not convertible | (4) | |||||||
| Class B – Series 52 | 650,000 | 650 | 35.29 | 650,000 | 650 | 70.57 | Not convertible | (4) | |||||||
| Preferred Shares - Classified as Equity | $ | 1,750 | $ | 2,050 | |||||||||||
| Recourse to | |||||||||||||||
| Other Equity Instruments | |||||||||||||||
| 4.800% Additional Tier 1 Capital Notes (AT1 Notes) | $ | 658 | $ | 658 | - | (4) (5) (7) | |||||||||
| 4.300% Limited Recourse Capital Notes, Series 1 (Series 1 LRCNs) | 1,250 | 1,250 | Preferred Shares Series 48 | (4) (6) (7) | |||||||||||
| 5.625% Limited Recourse Capital Notes, Series 2 (Series 2 LRCNs) | 750 | 750 | Preferred Shares Series 49 | (4) (6) (7) | |||||||||||
| 7.325% Limited Recourse Capital Notes, Series 3 (Series 3 LRCNs) | 1,000 | 1,000 | Preferred Shares Series 51 | (4) (6) (7) | |||||||||||
| 7.700% Limited Recourse Capital Notes, Series 4 (Series 4 LRCNs) | 1,356 | 1,356 | Preferred Shares Series 53 | (4) (6) (7) | |||||||||||
| 7.300% Limited Recourse Capital Notes, Series 5 (Series 5 LRCNs) | 1,023 | 1,023 | Preferred Shares Series 54 | (4) (6) (7) | |||||||||||
| 6.875% Limited Recourse Capital Notes, Series 6 (Series 6 LRCNs) | 1,369 | - | Preferred Shares Series 55 | (4) (6) (7) | |||||||||||
| Other Equity Instruments | 7,406 | 6,037 | |||||||||||||
| Preferred Shares and Other Equity Instruments | 9,156 | 8,087 | |||||||||||||
| Common Shares | 716,306,770 | $ | 23,554 | $ | 4.81 | 729,529,876 | $ | 23,921 | $ | 6.12 | (8) (9) (10) | ||||
| (1) | For additional information refer to Notes 17 and 21 of our annual consolidated financial statements for the year ended October 31, 2024. | ||||||||||||||
| --- | --- | ||||||||||||||
| (2) | Represents <br>year-to-date<br> dividends declared per share as at reporting date. <br>Non-cumulative<br> dividends on preferred shares are payable quarterly as and when declared by the Board of Directors, except for Class B – Series 50 and 52 preferred share dividends, which are payable semi-annually. | ||||||||||||||
| --- | --- | ||||||||||||||
| (3) | If converted, the holders have the option to convert back to the original preferred shares on subsequent redemption dates, subject to certain conditions. | ||||||||||||||
| --- | --- | ||||||||||||||
| (4) | The instruments issued include a NVCC provision, which is necessary for the preferred shares, AT1 Notes and by virtue of the recourse to the Preferred Shares Series 48, Preferred Shares Series 49, Preferred Shares Series 51, Preferred Shares Series 53, Preferred Shares Series 54 and Preferred Shares Series 55 (collectively, the LRCN Preferred Shares) for Series 1, Series 2, Series 3, Series 4, Series 5 and Series 6 LRCNs (collectively, the LRCNs), respectively, to qualify as regulatory capital under Basel III. As such, they are convertible into a variable number of our common shares if OSFI announces that the bank is, or is about to become, <br>non-viable<br> or if a federal or provincial government in Canada publicly announces that the bank has accepted or agreed to accept a capital injection, or equivalent support, to avoid <br>non-viability.<br> In such an event, each preferred share, including the LRCN Preferred Shares and AT1 Notes, is convertible into common shares pursuant to an automatic conversion formula and a conversion price based on the greater of: (i) a floor price of $5.00 and (ii) the current market price of our common shares based on the volume weighted average trading price of our common shares on the TSX. The number of common shares issued is determined by dividing the value of the preferred share or other equity instrument, including declared and unpaid dividends, by the conversion price and then applying the multiplier. | ||||||||||||||
| --- | --- | ||||||||||||||
| (5) | The notes had an initial interest rate of 4.800% and reset on August 25, 2024 to 6.709%. | ||||||||||||||
| --- | --- | ||||||||||||||
| (6) | Non-deferrable<br> interest is payable semi-annually on the Series 1, Series 2 and Series 3 LRCNs and quarterly on the Series 4, Series 5 and Series 6 LRCNs at the bank’s discretion. <br>Non-payment<br> of interest will result in a recourse event, with the noteholders’ sole remedy being the holders’ proportionate share of trust assets comprised of the LRCN Preferred Shares, each series of which is issued concurrently with the corresponding LRCNs and are eliminated on consolidation. In such an event, the delivery of the trust assets will represent the full and complete extinguishment of our obligations under the LRCNs. In circumstances where the LRCN Preferred Shares are converted into common shares of the bank under the NVCC provision, the LRCNs would be redeemed and the noteholders’ sole remedy would be their proportionate share of trust assets, then comprised of common shares of the bank received by the trust on conversion. | ||||||||||||||
| --- | --- | ||||||||||||||
| (7) | The rates represent the annual interest rate percentage applicable to the notes issued as at the reporting date. | ||||||||||||||
| --- | --- | ||||||||||||||
| (8) | The stock options issued under the Stock Option Plan are convertible into 6,272,612 common shares as at July 31, 2025 (6,554,492 common shares as at October 31, 2024) of which 2,791,106 are exercisable as at July 31, 2025 (2,856,460 as at October 31, 2024). | ||||||||||||||
| --- | --- | ||||||||||||||
| (9) | During the three and nine months ended July 31, 2025, we issued nil common shares, under the Shareholder Dividend Reinvestment and Share Purchase Plan (nil and 7,790,724 common shares during the three and nine months ended July 31, 2024) and we issued 289,748 and 975,467 common shares, under the Stock Option Plan (160,277 and 639,980 common shares during the three and nine months ended July 31, 2024). | ||||||||||||||
| --- | --- | ||||||||||||||
| (10) | Common shares are net of 53,745 treasury shares as at July 31, 2025 (55,172 treasury shares as at October 31, 2024). | ||||||||||||||
| --- | --- |
Other Equity Instruments
On July 29, 2025, we issued US$1,000 million 6.875%
Limited Recourse Capital Notes, Series 6. The notes will reset to a fixed rate on November 26, 2030. This issuance, together with our AT1 Notes and existing LRCNs are compound financial instruments that have both equity and liability features. On the date of issuance, we assigned an insignificant value to the liability components of both instruments and, as a result, the full amount of proceeds has been classified as equity and forms part of our additional Tier 1 Capital. Distributions on the AT1 Notes and LRCNs are recognized as a reduction in equity when payable. The AT1 Notes and LRCNs are subordinate to the claims of the depositors and certain other creditors in right of payment.
| BMO Financial Group Third Quarter Report 2025 <br>61 |
|---|
Preferred Shares
On August 25, 2025, we redeemed all of our outstanding 8 million Non-Cumulative
5-year Rate Reset Class B Preferred Shares, Series 33 (NVCC) for an aggregate total of $ 200 million.
On November 25, 2024, we redeemed all of our outstanding 12 million Non-Cumulative
5-year Rate Reset Class B Preferred Shares, Series 31 (NVCC) for an aggregate total of $ 300 million.
Common Shares
On January 17, 2025, we announced a normal course issuer bid (NCIB) to purchase up to 20 million of our common shares for cancellation commencing January 22, 2025, and ending no later than January 21, 2026. The timing and amount of purchases under the NCIB are determined by management, based on factors such as market conditions and capital levels. During the three months ended July 31, 2025, we purchased for cancellation 6 million common shares under the NCIB, at an average price of $146.11 per share for a total amount of $894 million, including tax. During the nine months ended July 31, 2025, we purchased for cancellation 14.2 million common shares under the NCIB, at an average price of $141.74 per share for a total amount of $2,051 million, including tax.
On August 26, 2025, we announced our intention to terminate our existing NCIB and establish a new NCIB to purchase up to 30 million of our common shares for cancellation, subject to the approval of OSFI and the Toronto Stock Exchange. NCIB’s are part of our regular capital management strategy.
Shareholder Dividend Reinvestment and Share Purchase Plan
Until further notice, common shares under the Shareholder Dividend Reinvestment and Share Purchase Plan will be purchased on the open market without a discount.
Note 7: Fair Value Measurements
Fair Value of Financial Instruments Not Carried at Fair Value on the Balance Sheet
Set out in the following table are the amounts that would be reported if all financial instruments not currently carried at fair value were reported at their fair values. Refer to Note 18 of our annual consolidated financial statements for the year ended October 31, 2024 for further discussion on the determination of fair value.
| (Canadian $ in millions) | July 31, 2025 | October 31, 2024 | ||||||
|---|---|---|---|---|---|---|---|---|
| Carrying value | Fair value | Carrying value | Fair value | |||||
| Securities<br>(1) | ||||||||
| Amortized cost | $ 98,479 | $ | 91,220 | $ | 115,188 | $ | 106,461 | |
| Loans<br>(1) (2) | ||||||||
| Residential mortgages | 194,885 | 193,260 | 190,666 | 188,848 | ||||
| Consumer instalment and other personal | 91,739 | 91,737 | 91,889 | 91,513 | ||||
| Credit cards | 12,360 | 12,360 | 13,030 | 13,030 | ||||
| Business and government | 363,798 | 364,235 | 369,776 | 370,101 | ||||
| 662,782 | 661,592 | 665,361 | 663,492 | |||||
| Deposits<br>(3) | 900,587 | 901,066 | 928,332 | 928,689 | ||||
| Securitization and structured entities’ liabilities<br>(4) | 19,659 | 19,513 | 21,850 | 21,653 | ||||
| Other liabilities<br>(5) | 3,023 | 2,834 | 2,929 | 2,669 | ||||
| Subordinated debt | 8,466 | 8,671 | 8,377 | 8,543 |
This table excludes financial instruments with a carrying value approximating fair value, such as cash and cash equivalents, interest bearing deposits with banks, securities borrowed or purchased under resale agreements, certain other assets, certain other liabilities and securities lent or sold under repurchase agreements.
| (1) | Carrying value is net of ACL. |
|---|---|
| (2) | Excludes $70 million of residential mortgages classified as FVTPL, $14,269 million of business and government loans classified as FVTPL and $14 million of business and government loans classified as FVOCI ($163 million, $12,431 million and $61 million, respectively, as at October 31, 2024). |
| --- | --- |
| (3) | Excludes $47,217 million of structured note liabilities, $3,584 million of money market deposits, $1,579 million of embedded options related to structured deposits carried at amortized cost and $2,396 million of metals deposits measured at fair value ($45,222 million, $6,032 million, $1,047 million and $1,807 million, respectively, as at October 31, 2024). |
| --- | --- |
| (4) | Excludes $29,900 million of securitization and structured entities’ liabilities classified as FVTPL ($18,314 million as at October 31, 2024). |
| --- | --- |
| (5) | Other liabilities include certain investment contract liabilities in our insurance business measured at amortized cost, as well as certain other liabilities of subsidiaries. |
| --- | --- |
Fair Value Hierarchy
We use a fair value hierarchy to categorize assets and liabilities carried at fair value according to the inputs we use in valuation techniques to measure fair value.
| 62<br> BMO Financial Group Third Quarter Report 2025 |
|---|
Valuation Techniques and Significant Inputs
We determine the fair value of assets and liabilities using quoted prices in active markets (Level 1) when these are available. When quoted prices in active markets are not available, we determine the fair value of financial assets and liabilities using models such as discounted cash flows with observable market data for inputs, such as yields or broker quotes and other third-party vendor quotes (Level 2). Fair value may also be determined using models where significant market inputs are not observable due to inactive markets or minimal market activity (Level 3). We maximize the use of observable market inputs to the extent possible.
Our Level 2 trading securities are primarily valued using discounted cash flow models with observable spreads or broker quotes. The fair value of Level 2 FVOCI securities is determined using discounted cash flow models with observable spreads or third-party vendor quotes. Level 2 structured note liabilities are valued using models with observable market information. Level 2 derivative assets and liabilities are valued using industry standard models and observable market information.
| BMO Financial Group Third Quarter Report 2025 <br>63 |
|---|
The extent of our use of actively quoted market prices (Level 1), internal models using observable market information as inputs (Level 2) and models using one or more significant unobservable inputs (Level 3) in the valuation of securities, loans classified as FVTPL and FVOCI, other assets, fair value liabilities, derivative assets and derivative liabilities is presented in the following table:
| (Canadian $ in millions) | July 31, 2025 | October 31, 2024 | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | |||||||||
| Trading Securities | ||||||||||||||||
| Issued or guaranteed by: | ||||||||||||||||
| Canadian federal government | $ | 748 | $ | 12,176 | $ | - | $ | 12,924 | $ | 1,272 | $ | 8,764 | $ | - | $ | 10,036 |
| Canadian provincial and municipal governments | - | 7,292 | - | 7,292 | - | 7,585 | - | 7,585 | ||||||||
| U.S. federal government | 2,337 | 26,925 | - | 29,262 | 2,688 | 21,560 | - | 24,248 | ||||||||
| U.S. states, municipalities and agencies | - | 668 | - | 668 | - | 565 | - | 565 | ||||||||
| Other governments | 71 | 3,728 | - | 3,799 | 92 | 3,757 | - | 3,849 | ||||||||
| NHA MBS, and U.S. agency MBS and CMO | - | 51,547 | - | 51,547 | - | 40,995 | - | 40,995 | ||||||||
| Corporate debt | - | 12,019 | - | 12,019 | - | 10,172 | - | 10,172 | ||||||||
| Trading loans | - | 4,093 | - | 4,093 | - | 5,493 | - | 5,493 | ||||||||
| Corporate equity | 52,658 | 810 | - | 53,468 | 65,559 | 420 | 4 | 65,983 | ||||||||
| 55,814 | 119,258 | - | 175,072 | 69,611 | 99,311 | 4 | 168,926 | |||||||||
| FVTPL Securities | ||||||||||||||||
| Issued or guaranteed by: | ||||||||||||||||
| Canadian federal government | 152 | 564 | - | 716 | 166 | 237 | - | 403 | ||||||||
| Canadian provincial and municipal governments | - | 1,479 | - | 1,479 | - | 1,578 | - | 1,578 | ||||||||
| U.S. federal government | - | 1,467 | - | 1,467 | - | 1,527 | - | 1,527 | ||||||||
| Other governments | - | - | - | - | - | 25 | - | 25 | ||||||||
| NHA MBS, and U.S. agency MBS and CMO | - | 18 | - | 18 | - | 21 | - | 21 | ||||||||
| Corporate debt | - | 8,750 | - | 8,750 | - | 8,745 | 35 | 8,780 | ||||||||
| Corporate equity | 1,009 | 879 | 5,469 | 7,357 | 921 | 910 | 4,899 | 6,730 | ||||||||
| 1,161 | 13,157 | 5,469 | 19,787 | 1,087 | 13,043 | 4,934 | 19,064 | |||||||||
| FVOCI Securities | ||||||||||||||||
| Issued or guaranteed by: | ||||||||||||||||
| Canadian federal government | 1,373 | 41,539 | - | 42,912 | 3,212 | 30,965 | - | 34,177 | ||||||||
| Canadian provincial and municipal governments | - | 6,102 | - | 6,102 | - | 5,996 | - | 5,996 | ||||||||
| U.S. federal government | - | 18,955 | - | 18,955 | 25 | 16,940 | - | 16,965 | ||||||||
| U.S. states, municipalities and agencies | - | 5,120 | - | 5,120 | - | 5,068 | - | 5,068 | ||||||||
| Other governments | - | 3,840 | - | 3,840 | - | 5,656 | - | 5,656 | ||||||||
| NHA MBS, and U.S. agency MBS and CMO | - | 24,895 | - | 24,895 | - | 21,293 | - | 21,293 | ||||||||
| Corporate debt | - | 4,406 | - | 4,406 | - | 4,370 | - | 4,370 | ||||||||
| Corporate equity | - | - | 190 | 190 | - | - | 177 | 177 | ||||||||
| 1,373 | 104,857 | 190 | 106,420 | 3,237 | 90,288 | 177 | 93,702 | |||||||||
| Loans | ||||||||||||||||
| Residential mortgages | - | 70 | - | 70 | - | 163 | - | 163 | ||||||||
| Business and government loans | - | 13,964 | 319 | 14,283 | - | 12,190 | 302 | 12,492 | ||||||||
| - | 14,034 | 319 | 14,353 | - | 12,353 | 302 | 12,655 | |||||||||
| Other Assets<br>(1) | 11,970 | - | 1,433 | 13,403 | 11,236 | - | 1,717 | 12,953 | ||||||||
| Fair Value Liabilities<br>(2) | ||||||||||||||||
| Deposits (3) | - | 54,776 | - | 54,776 | - | 54,108 | - | 54,108 | ||||||||
| Securities sold but not yet purchased | 11,440 | 39,968 | - | 51,408 | 10,631 | 24,399 | - | 35,030 | ||||||||
| Other liabilities (4) | 1,992 | 30,664 | - | 32,656 | 1,754 | 19,110 | - | 20,864 | ||||||||
| 13,432 | 125,408 | - | 138,840 | 12,385 | 97,617 | - | 110,002 | |||||||||
| Derivative Assets | ||||||||||||||||
| Interest rate contracts | 16 | 8,390 | - | 8,406 | 36 | 9,851 | - | 9,887 | ||||||||
| Foreign exchange contracts | 25 | 23,559 | 16 | 23,600 | 4 | 21,258 | 10 | 21,272 | ||||||||
| Commodity contracts | 332 | 1,333 | 2 | 1,667 | 169 | 1,656 | 2 | 1,827 | ||||||||
| Equity contracts | 748 | 9,760 | 16 | 10,524 | 539 | 13,718 | - | 14,257 | ||||||||
| Credit default swaps | - | - | - | - | - | 10 | - | 10 | ||||||||
| 1,121 | 43,042 | 34 | 44,197 | 748 | 46,493 | 12 | 47,253 | |||||||||
| Derivative Liabilities | ||||||||||||||||
| Interest rate contracts | 42 | 10,067 | - | 10,109 | 32 | 10,811 | - | 10,843 | ||||||||
| Foreign exchange contracts | - | 20,318 | - | 20,318 | - | 19,955 | - | 19,955 | ||||||||
| Commodity contracts | 61 | 1,345 | - | 1,406 | 96 | 1,721 | 4 | 1,821 | ||||||||
| Equity contracts | 236 | 19,383 | - | 19,619 | 75 | 25,596 | 2 | 25,673 | ||||||||
| Credit default swaps | - | - | - | - | - | 10 | 1 | 11 | ||||||||
| 339 | 51,113 | - | 51,452 | 203 | 58,093 | 7 | 58,303 | |||||||||
| (1) | Other assets include precious metals, segregated fund assets and investment properties in our insurance business, carbon credits, certain receivables and other items measured at fair value. | |||||||||||||||
| --- | --- | |||||||||||||||
| (2) | Interest expense for liabilities carried at fair value is $832 million and $2,612 million for the three and nine months ended July 31, 2025, respectively ($726 million and $2,061 million for the three and nine months ended July 31,<br><br>2024). Interest expense for liabilities carried at amortized cost is $9,414 million and $29,416 million for the three and nine months ended July 31, 2025, respectively ($11,583 million and $33,030 million for the three and nine months ended July 31, 2024). | |||||||||||||||
| --- | --- | |||||||||||||||
| (3) | Deposits include structured note liabilities, money market and metals deposits designated at FVTPL and certain embedded options related to structured deposits carried at amortized cost. | |||||||||||||||
| --- | --- | |||||||||||||||
| (4) | Other liabilities include certain investment contract liabilities and segregated fund liabilities in our insurance business, as well as certain securitization and structured entities’ liabilities measured at FVTPL. | |||||||||||||||
| --- | --- |
Certain comparative figures have been reclassified to conform with the current period’s presentation.
| 64<br> BMO Financial Group Third Quarter Report 2025 |
|---|
Quantitative Information about Level 3 Fair Value Measurements
The table below presents the fair values of our significant Level 3 financial instruments measured at fair value on a recurring basis, the valuation techniques used to determine their fair values and the value ranges of significant unobservable inputs used in the valuations. We have not applied any other reasonably possible alternative assumptions to the significant Level 3 categories of private equity investments, as the net asset values are provided by the investment or fund managers.
| (Canadian in millions, except as noted) | July 31, 2025 | |||||||
|---|---|---|---|---|---|---|---|---|
| Range of input values<br>(1) | ||||||||
| Fair value<br> of assets | Valuation techniques | Significant<br> unobservable inputs | Low | High | ||||
| Private equity | $ | 5,659 | Net asset value | Net asset value | na | na | ||
| EV/EBITDA | Multiple | 5 | 28 | |||||
| Investment properties | 1,358 | Income approach | Capitalization rate | 2% | 8% |
All values are in US Dollars.
| (1) | The low and high input values represent the lowest and highest actual level of inputs used to value a group of financial instruments in a particular product category. These input ranges do not reflect the level of input uncertainty, but are affected by the specific underlying instruments within each product category. The input ranges will therefore vary from period to period based on the characteristics of the underlying instruments held at each balance sheet date. |
|---|
na – not applicable
Significant Transfers
Our policy is to record transfers of assets and liabilities between fair value hierarchy levels at their fair values as at the end of each reporting period, consistent with the date of the determination of fair value. Transfers between Level 1 and Level 2 are dependent on the recency of issuance and availability of quoted market prices in the active market. There were no significant transfers between Level 1 and Level 2 during the three and nine months ended July 31, 2025 and 2024.
Changes in Level 3 Fair Value Measurements
The tables below present a reconciliation of all changes in Level 3 financial instruments for the three and nine months ended July 31, 2025 and 2024, including realized and unrealized gains (losses) included in earnings and other comprehensive income as well as transfers into and out of Level 3. Transfers from Level 2 into Level 3 were due to an increase in unobservable market inputs used in pricing the securities. Transfers out of Level 3 into Level 2 were due to an increase in observable market inputs used in pricing the securities.
| BMO Financial Group Third Quarter Report 2025 <br>65 | ||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Change in fair value | Movements | Transfers | ||||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| For the three months ended July 31, 2025<br> <br>(Canadian $ in millions) | Fair Value<br> as at April 30,<br> 2025 | Included in<br> earnings | Included<br> in other<br> comprehensive<br> income<br>(1) | Issuances/<br> Purchases | Sales | Maturities/<br> Settlement | Transfers<br> into<br> Level 3 | Transfers<br> out of<br> Level 3 | Fair Value<br> as at July 31,<br> 2025 | Change in<br> unrealized gains<br> (losses) recorded<br> in income<br> <br>for instruments<br> still held<br>(2) | ||||||||||||||||
| Trading Securities | ||||||||||||||||||||||||||
| NHA MBS and U.S. agency MBS and CMO | $ | 5 | $ | - | $ | - | $ | - | $ | (5 | ) | $ | - | $ | - | $ | - | $ | - | $ | - | |||||
| Corporate equity | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||
| Total trading securities | 5 | - | - | - | (5 | ) | - | - | - | - | - | |||||||||||||||
| FVTPL Securities | ||||||||||||||||||||||||||
| Corporate debt | 36 | - | - | - | - | - | - | (36 | ) | - | - | |||||||||||||||
| Corporate equity | 5,257 | (25 | ) | 10 | 288 | (55 | ) | - | - | (6 | ) | 5,469 | 20 | |||||||||||||
| Total FVTPL securities | 5,293 | (25 | ) | 10 | 288 | (55 | ) | - | - | (42 | ) | 5,469 | 20 | |||||||||||||
| FVOCI Securities | ||||||||||||||||||||||||||
| Corporate equity | 189 | - | - | 1 | - | - | - | - | 190 | na | ||||||||||||||||
| Total FVOCI securities | 189 | - | - | 1 | - | - | - | - | 190 | na | ||||||||||||||||
| Business and Government Loans | 382 | (17 | ) | - | - | - | (46 | ) | - | - | 319 | (17 | ) | |||||||||||||
| Other Assets | 1,435 | - | - | 13 | - | (15 | ) | - | - | 1,433 | - | |||||||||||||||
| Derivative Assets | ||||||||||||||||||||||||||
| Foreign exchange contracts | - | - | - | 16 | - | - | - | - | 16 | - | ||||||||||||||||
| Commodity contracts | 9 | (7 | ) | - | - | - | - | - | - | 2 | (7 | ) | ||||||||||||||
| Equity contracts | 14 | 2 | - | - | - | - | - | - | 16 | 2 | ||||||||||||||||
| Credit default swaps | 1 | - | - | - | - | (1 | ) | - | - | - | - | |||||||||||||||
| Total derivative assets | 24 | (5 | ) | - | 16 | - | (1 | ) | - | - | 34 | (5 | ) | |||||||||||||
| Other Liabilities | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||
| Derivative Liabilities | ||||||||||||||||||||||||||
| Commodity contracts | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||
| Equity contracts | 1 | - | - | - | - | - | - | (1 | ) | - | - | |||||||||||||||
| Credit default swaps | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||
| Total derivative liabilities | 1 | - | - | - | - | - | - | (1 | ) | - | - | |||||||||||||||
| Change in fair value | Movements | Transfers | ||||||||||||||||||||||||
| For the nine months ended July 31, 2025<br> <br>(Canadian $ in millions) | Fair Value as<br> at October 31,<br> 2024 | Included in<br> earnings | Included<br> in other<br> comprehensive<br> income<br>(1) | Issuances/<br> Purchases | Sales | Maturities/<br> Settlement | Transfers<br> into<br> Level 3 | Transfers<br> out of<br> Level 3 | Fair Value<br> as at July 31,<br> 2025 | Change in<br> unrealized gains<br> (losses) recorded<br> in income<br> for instruments<br> still held<br>(2) | ||||||||||||||||
| Trading Securities | ||||||||||||||||||||||||||
| NHA MBS and U.S. agency MBS and CMO | $ | - | $ | - | $ | - | $ | 5 | $ | (5 | ) | $ | - | $ | - | $ | - | $ | - | $ | - | |||||
| Corporate equity | 4 | - | - | 2 | - | - | - | (6 | ) | - | - | |||||||||||||||
| Total trading securities | 4 | - | - | 7 | (5 | ) | - | - | (6 | ) | - | - | ||||||||||||||
| FVTPL Securities | ||||||||||||||||||||||||||
| Corporate debt | 35 | 1 | - | 2 | - | - | - | (38 | ) | - | 1 | |||||||||||||||
| Corporate equity | 4,899 | (121 | ) | (11 | ) | 902 | (194 | ) | - | - | (6 | ) | 5,469 | 36 | ||||||||||||
| Total FVTPL securities | 4,934 | (120 | ) | (11 | ) | 904 | (194 | ) | - | - | (44 | ) | 5,469 | 37 | ||||||||||||
| FVOCI Securities | ||||||||||||||||||||||||||
| Corporate equity | 177 | - | (15 | ) | 28 | - | - | - | - | 190 | na | |||||||||||||||
| Total FVOCI securities | 177 | - | (15 | ) | 28 | - | - | - | - | 190 | na | |||||||||||||||
| Business and Government Loans | 302 | (15 | ) | (1 | ) | 56 | - | (52 | ) | 29 | - | 319 | (15 | ) | ||||||||||||
| Other Assets | 1,717 | (56 | ) | - | 214 | (7 | ) | (435 | ) | - | - | 1,433 | (52 | ) | ||||||||||||
| Derivative Assets | ||||||||||||||||||||||||||
| Foreign exchange contracts | 10 | - | - | 48 | - | (42 | ) | - | - | 16 | - | |||||||||||||||
| Commodity contracts | 2 | - | - | - | - | - | - | - | 2 | - | ||||||||||||||||
| Equity contracts | - | - | - | - | - | - | 16 | - | 16 | - | ||||||||||||||||
| Credit default swaps | - | - | - | - | - | (1 | ) | 1 | - | - | - | |||||||||||||||
| Total derivative assets | 12 | - | - | 48 | - | (43 | ) | 17 | - | 34 | - | |||||||||||||||
| Other Liabilities | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||
| Derivative Liabilities | ||||||||||||||||||||||||||
| Commodity contracts | 4 | (4 | ) | - | - | - | - | - | - | - | (4 | ) | ||||||||||||||
| Equity contracts | 2 | - | - | - | - | - | 1 | (3 | ) | - | - | |||||||||||||||
| Credit default swaps | 1 | - | - | - | - | (1 | ) | - | - | - | - | |||||||||||||||
| Total derivative liabilities | 7 | (4 | ) | - | - | - | (1 | ) | 1 | (3 | ) | - | (4 | ) | ||||||||||||
| (1) | Foreign exchange translation on assets and liabilities held by foreign operations is included in other comprehensive income, net foreign operations. | |||||||||||||||||||||||||
| --- | --- | |||||||||||||||||||||||||
| (2) | Changes in unrealized gains (losses) on Trading and FVTPL securities still held on July 31, 2025 are included in earnings for the period. | |||||||||||||||||||||||||
| --- | --- |
Unrealized gains (losses) recognized on Level 3 financial instruments may be offset by (losses) gains on economic hedge contracts.
na – not applicable
| 66<br> BMO Financial Group Third Quarter Report 2025 | ||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Change in fair value | Movements | Transfers | ||||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| For the three months ended July 31, 2024<br> <br>(Canadian $ in millions) | Fair Value<br> as at April 30,<br> 2024 | Included in<br> earnings | Included<br> <br>in other<br> comprehensive<br> income<br>(1) | Issuances/<br> Purchases | Sales | Maturities/<br> Settlement | Transfers<br> into<br> Level 3 | Transfers<br> out of<br> Level 3 | Fair Value<br> <br>as at July 31,<br> 2024 | Change in<br> unrealized gains<br> (losses) recorded<br> in income<br> <br>for instruments<br> still held<br>(2) | ||||||||||||||||
| Trading Securities | ||||||||||||||||||||||||||
| NHA MBS and U.S. agency MBS and CMO | $ | - | $ | - | $ | - | $ | 41 | $ | - | $ | - | $ | - | $ | - | $ | 41 | $ | - | ||||||
| Corporate equity | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||
| Total trading securities | - | - | - | 41 | - | - | - | - | 41 | - | ||||||||||||||||
| FVTPL Securities | ||||||||||||||||||||||||||
| Corporate debt | 35 | - | - | 1 | - | - | - | - | 36 | - | ||||||||||||||||
| Corporate equity | 4,501 | (44 | ) | 5 | 183 | (54 | ) | (1 | ) | - | - | 4,590 | 7 | |||||||||||||
| Total FVTPL securities | 4,536 | (44 | ) | 5 | 184 | (54 | ) | (1 | ) | - | - | 4,626 | 7 | |||||||||||||
| FVOCI Securities | ||||||||||||||||||||||||||
| Corporate equity | 174 | - | 2 | 1 | - | - | - | - | 177 | na | ||||||||||||||||
| Total FVOCI securities | 174 | - | 2 | 1 | - | - | - | - | 177 | na | ||||||||||||||||
| Business and Government Loans | 353 | - | - | 1 | - | (88 | ) | - | - | 266 | - | |||||||||||||||
| Other Assets | 1,622 | 24 | - | 58 | - | (22 | ) | - | - | 1,682 | 24 | |||||||||||||||
| Derivative Assets | ||||||||||||||||||||||||||
| Foreign exchange contracts | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||
| Commodity contracts | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||
| Equity contracts | 13 | - | - | - | - | - | - | (13 | ) | - | - | |||||||||||||||
| Credit default swaps | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||
| Total derivative assets | 13 | - | - | - | - | - | - | (13 | ) | - | - | |||||||||||||||
| Other Liabilities | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||
| Derivative Liabilities | ||||||||||||||||||||||||||
| Commodity contracts | 2 | - | - | - | - | - | - | - | 2 | - | ||||||||||||||||
| Equity contracts | 1 | - | - | - | - | - | - | (1 | ) | - | - | |||||||||||||||
| Credit default swaps | 1 | - | - | - | - | - | - | - | 1 | - | ||||||||||||||||
| Total derivative liabilities | 4 | - | - | - | - | - | - | (1 | ) | 3 | - | |||||||||||||||
| Change in fair value | Movements | Transfers | ||||||||||||||||||||||||
| For the nine months ended July 31, 2024<br> <br>(Canadian $ in millions) | Fair Value<br> as at October 31,<br> 2023 | Included in<br> earnings | Included<br> <br>in other<br> comprehensive<br> income<br>(1) | Issuances/<br> Purchases | Sales | Maturities/<br> Settlement | Transfers<br> into<br> Level 3 | Transfers<br> out of<br> Level 3 | Fair Value<br> as at July 31,<br> 2024 | Change in<br> unrealized gains<br> (losses) recorded<br> in income<br> <br>for instruments<br> still held<br>(2) | ||||||||||||||||
| Trading Securities | ||||||||||||||||||||||||||
| NHA MBS and U.S. agency MBS and CMO | $ | - | $ | - | $ | - | $ | 41 | $ | - | $ | - | $ | - | $ | - | $ | 41 | $ | - | ||||||
| Corporate equity | 37 | - | - | - | - | - | - | (37 | ) | - | - | |||||||||||||||
| Total trading securities | 37 | - | - | 41 | - | - | - | (37 | ) | 41 | - | |||||||||||||||
| FVTPL Securities | ||||||||||||||||||||||||||
| Corporate debt | 27 | (9 | ) | - | 18 | - | - | - | - | 36 | (9 | ) | ||||||||||||||
| Corporate equity | 4,208 | (136 | ) | (5 | ) | 705 | (180 | ) | (1 | ) | - | (1 | ) | 4,590 | 24 | |||||||||||
| Total FVTPL securities | 4,235 | (145 | ) | (5 | ) | 723 | (180 | ) | (1 | ) | - | (1 | ) | 4,626 | 15 | |||||||||||
| FVOCI Securities | ||||||||||||||||||||||||||
| Corporate equity | 160 | - | 13 | 4 | - | - | - | - | 177 | na | ||||||||||||||||
| Total FVOCI securities | 160 | - | 13 | 4 | - | - | - | - | 177 | na | ||||||||||||||||
| Business and Government Loans | 186 | - | (1 | ) | 47 | - | (164 | ) | 198 | - | 266 | - | ||||||||||||||
| Other Assets | 1,723 | 7 | - | 74 | (21 | ) | (101 | ) | - | - | 1,682 | 24 | ||||||||||||||
| Derivative Assets | ||||||||||||||||||||||||||
| Foreign exchange contracts | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||
| Commodity contracts | 5 | (5 | ) | - | - | - | - | - | - | - | (5 | ) | ||||||||||||||
| Equity contracts | - | - | - | - | - | - | 13 | (13 | ) | - | - | |||||||||||||||
| Credit default swaps | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||
| Total derivative assets | 5 | (5 | ) | - | - | - | - | 13 | (13 | ) | - | (5 | ) | |||||||||||||
| Other Liabilities | 5 | - | - | 8 | - | (13 | ) | - | - | - | - | |||||||||||||||
| Derivative Liabilities | ||||||||||||||||||||||||||
| Commodity contracts | 1 | 1 | - | - | - | - | - | - | 2 | 1 | ||||||||||||||||
| Equity contracts | 8 | - | - | - | - | - | 1 | (9 | ) | - | - | |||||||||||||||
| Credit default swaps | 2 | (2 | ) | - | - | - | - | 1 | - | 1 | (1 | ) | ||||||||||||||
| Total derivative liabilities | 11 | (1 | ) | - | - | - | - | 2 | (9 | ) | 3 | - | ||||||||||||||
| (1) | Foreign exchange translation on assets and liabilities held by foreign operations is included in other comprehensive income, net foreign operations. | |||||||||||||||||||||||||
| --- | --- | |||||||||||||||||||||||||
| (2) | Changes in unrealized gains (losses) on Trading and FVTPL securities still held on July 31, 2024 are included in earnings for the period. | |||||||||||||||||||||||||
| --- | --- |
Unrealized gains (losses) recognized on Level 3 financial instruments may be offset by (losses) gains on economic hedge contracts.
na – not applicable
| BMO Financial Group Third Quarter Report 2025 <br>67 |
|---|
Note 8: Capital Management
Our objective is to maintain a strong capital position in a cost-effective structure that: is appropriate given our target regulatory capital ratios and our internal assessment of required economic capital; underpins our operating groups’ business strategies and considers the market environment; supports depositor, investor and regulator confidence, while building long-term shareholder value; and is consistent with our target credit ratings.
As at July 31, 2025, we met OSFI’s target capital ratio requirements, which include a 2.5% Capital Conservation Buffer, a 1.0% Common Equity Surcharge for Domestic Systemically Important Banks (D-SIBs), a Countercyclical Buffer and a 3.5% Domestic Stability Buffer (DSB) applicable to D-SIBs. On June 26, 2025, OSFI announced that the DSB will remain at 3.5%. Our capital position as at July 31, 2025 is further detailed in the Capital Management section of our interim Management’s Discussion and Analysis.
Regulatory Capital and Total Loss Absorbing Capacity Measures, Risk-Weighted Assets and Leverage Exposures
(1)
| (Canadian $ in millions, except as noted) | July 31, 2025 | October 31, 2024 |
| CET1 Capital | ||
| Tier 1 Capital | ||
| Total Capital | ||
| TLAC | ||
| Risk-Weighted Assets | ||
| Leverage Exposures | ||
| CET1 Ratio | ||
| Tier 1 Capital Ratio | ||
| Total Capital Ratio | ||
| TLAC Ratio | ||
| Leverage Ratio | ||
| TLAC Leverage Ratio |
All values are in US Dollars.
| (1) | Calculated in accordance with OSFI’s Capital Adequacy Requirements Guideline, Leverage Requirements Guideline and Total Loss Absorbing Capacity (TLAC) Guideline. |
|---|
Note 9: Employee Compensation
Stock Options
We did not grant any stock options during the three months ended July 31, 2025 or 2024. During the nine months ended July 31, 2025, we granted a total of 716,633 stock options (1,113,853 stock options during the nine months ended July 31, 2024) with a weighted-average fair value of $18.46 per option ($15.33 per option for the nine months ended July 31, 2024).
To determine the fair value of the stock option tranches (i.e. the portion that vests each year) on the grant date, the following ranges of values were used for each option pricing assumption:
| For stock options granted during the nine months ended | July 31, 2024 |
| Expected dividend yield | |
| Expected share price volatility | |
| Risk-free rate of return | |
| Expected period until exercise (in years) | |
| Exercise price () |
All values are in US Dollars.
Changes to the input assumptions can result in different fair value estimates.
Pension and Other Employee Future Benefit Expenses
Pension and other employee future benefit expenses are determined as follows:
| (Canadian in millions) | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Other employee future benefit plans | |||||||||
| For the three months ended | July 31, 2024 | July 31, 2025 | July 31, 2024 | ||||||
| Current service cost | 44 | $ | 39 | $ | 2 | $ | 1 | ||
| Net interest (income) expense (1) | (12 | ) | (16 | ) | 9 | 11 | |||
| Impact of plan amendments | - | - | - | - | |||||
| Administrative expenses | 2 | 3 | - | - | |||||
| Benefits expense | 34 | 26 | 11 | 12 | |||||
| Government pension plans expense (2) | 96 | 93 | - | - | |||||
| Defined contribution expense | 66 | 62 | - | - | |||||
| Total pension and other employee future benefit expenses recognized in our Consolidated Statement of Income | 196 | $ | 181 | $ | 11 | $ | 12 |
All values are in US Dollars.
| (1) | Net interest (income) expense is increased by $nil million for pension benefit plans and $1 million for other employee future benefit plans for the three months ended July 31, 2025 ($nil million for pension benefit plans and $1 million for other employee future benefit plans for the three months ended July 31, 2024) as a result of assets written down through other comprehensive income due to the asset ceiling. | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| (2) | Includes Canada Pension Plan, Quebec Pension Plan and U.S. Federal Insurance Contribution Act. | |||||||||
| --- | --- | |||||||||
| 68<br> BMO Financial Group Third Quarter Report 2025 | ||||||||||
| --- | ||||||||||
| (Canadian in millions) | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Other employee future benefit plans | ||||||||||
| For the nine months ended | July 31, 2024 | July 31, 2025 | July 31, 2024 | |||||||
| Current service cost | 133 | $ | 115 | $ | 5 | $ | 4 | |||
| Net interest (income) expense (1) | (38 | ) | (46 | ) | 28 | 31 | ||||
| Impact of plan amendments | (19 | ) | - | - | (84 | ) | ||||
| Administrative expenses | 9 | 9 | - | - | ||||||
| Benefits expense | 85 | 78 | 33 | (49 | ) | |||||
| Government pension plans expense (2) | 310 | 302 | - | - | ||||||
| Defined contribution expense | 244 | 231 | - | - | ||||||
| Total pension and other employee future benefit expenses (recovery) recognized in our Consolidated Statement of Income | 639 | $ | 611 | $ | 33 | $ | (49 | ) |
All values are in US Dollars.
| (1) | Net interest (income) expense is increased by $nil million for pension benefit plans and $4 million for other employee future benefit plans for the nine months ended July 31, 2025 ($nil million for pension benefit plans and $2 million for other employee future benefit plans for the nine months ended July 31, 2024) as a result of assets written down through other comprehensive income due to the asset ceiling. |
|---|---|
| (2) | Includes Canada Pension Plan, Quebec Pension Plan and U.S. Federal Insurance Contribution Act. |
| --- | --- |
We amended one of our U.S. pension plans in the first quarter of 2025, resulting in a $19 million benefit that was recognized as a reduction in employee compensation expense.
Note 10: Earnings Per Share
Basic earnings per share is calculated by dividing net income attributable to bank shareholders, after deducting dividends payable on preferred shares and distributions payable on other equity instruments, by the daily average number of fully paid common shares outstanding throughout the period.
Diluted earnings per share is calculated in the same manner, with further adjustments made to reflect the dilutive impact of instruments convertible into our common shares.
The following tables present our basic and diluted earnings per share:
Basic Earnings Per Common Share
| (Canadian $ in millions, except as noted) | For the three months ended | For the nine months ended | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| July 31, 2025 | July 31, 2024 | July 31, 2025 | July 31, 2024 | |||||||||
| Net income attributable to bank shareholders | $ | 2,327 | $ | 1,865 | $ | 6,421 | $ | 5,017 | ||||
| Dividends on preferred shares and distributions on other equity instruments | (66 | ) | (51 | ) | (273 | ) | (234 | ) | ||||
| Net income available to common shareholders | $ | 2,261 | $ | 1,814 | $ | 6,148 | $ | 4,783 | ||||
| Weighted-average number of common shares outstanding (in thousands) | 719,514 | 729,449 | 724,820 | 727,174 | ||||||||
| Basic earnings per common share (Canadian $) | $ | 3.14 | $ | 2.49 | $ | 8.48 | $ | 6.58 |
Diluted Earnings Per Common Share
| (Canadian $ in millions, except as noted) | For the three months ended | For the nine months ended | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| July 31, 2025 | July 31, 2024 | July 31, 2025 | July 31, 2024 | |||||||||
| Net income available to common shareholders | $ | 2,261 | $ | 1,814 | $ | 6,148 | $ | 4,783 | ||||
| Weighted-average number of common shares outstanding (in thousands) | 719,514 | 729,449 | 724,820 | 727,174 | ||||||||
| Dilutive impact of stock options (1) | ||||||||||||
| Stock options potentially exercisable | 5,597 | 3,473 | 5,912 | 3,629 | ||||||||
| Common shares potentially repurchased | (4,318 | ) | (2,730 | ) | (4,751 | ) | (2,793 | ) | ||||
| Weighted-average number of diluted common shares outstanding (in thousands) | 720,793 | 730,192 | 725,981 | 728,010 | ||||||||
| Diluted earnings per common share (Canadian $) | $ | 3.14 | $ | 2.48 | $ | 8.47 | $ | 6.57 | ||||
| (1) | The dilutive effect of stock options was calculated using the treasury stock method. In computing diluted earnings per share, we excluded average stock options outstanding of 716,633 and 635,554 with a weighted-average exercise price of $149.35 and $150.96 for the three and nine months ended July 31, 2025, respectively (3,309,605 and 3,197,420 with a weighted-average exercise price of $129.73 and $130.81 for the three and nine months ended July 31, 2024, respectively), as the average share price for the periods did not exceed the exercise price. | |||||||||||
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Note 11: Income Taxes
Tax Assessments
Canadian tax authorities have reassessed us for additional income tax and interest in an amount of approximately $1,465 million in respect of certain 2011-2018 Canadian corporate dividends. These reassessments denied certain dividend deductions on the basis that the dividends were received as part of a “dividend rental arrangement.” In general, the tax rules raised by the Canadian tax authorities were prospectively addressed in the 2015 and 2018 Canadian federal budgets. We filed Notices of Appeal with the Tax Court of Canada and the matter is in litigation. We remain of the view that our tax filing positions were appropriate and intend to challenge all reassessments. However, if such challenges are unsuccessful, the additional expense would negatively impact our net income.
| BMO Financial Group Third Quarter Report 2025 <br>69 |
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Global Minimum Tax
In May 2023, the IASB issued an amendment to IAS 12 Income Taxes (IAS 12). The amendment addresses concerns around accounting for the global minimum top-up tax as outlined in the two-pillar plan for international tax reform developed by members of the Organisation for Economic Co-operation and Development/G20 Inclusive Framework on Base Erosion and Profit Shifting. The amendment to IAS 12 includes temporary mandatory relief from recognizing and disclosing deferred taxes related to the top-up tax. We have applied the temporary mandatory relief related to deferred taxes in jurisdictions in which we operate where the top-up tax legislation has been enacted, or substantively enacted. The global minimum tax rules are effective for our fiscal year beginning November 1, 2024, and as a result, our effective tax rate increased by approximately 50 basis points and 60 basis points for the three and nine months ended July 31, 2025, respectively.
Note 12: Operating Segmentation
Operating Groups
We conduct our business through three operating groups, each of which has a distinct mandate. Our operating groups are Personal and Commercial Banking (P&C) (comprised of Canadian Personal and Commercial Banking (Canadian P&C) and U.S. Personal and Commercial Banking (U.S. P&C)), BMO Wealth Management (BMO WM) and BMO Capital Markets (BMO CM), along with a Corporate Services unit.
For additional information refer to Note 26 of our annual consolidated financial statements for the year ended October 31, 2024.
Our results and average assets, grouped by operating segment, are as follows:
| (Canadian in millions) | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| For the three months ended July 31, 2025 | U.S. P&C<br>(1) | BMO WM | BMO CM<br>(1) | Corporate<br>Services<br>(1)<br><br>(2) | Total | |||||||||
| Net interest income | 2,459 | $ | 2,105 | $ | 373 | $ | 729 | $ | (170 | ) | $ | 5,496 | ||
| Non-interest revenue | 639 | 436 | 1,259 | 1,047 | 111 | 3,492 | ||||||||
| Total Revenue | 3,098 | 2,541 | 1,632 | 1,776 | (59 | ) | 8,988 | |||||||
| Provision for credit losses on impaired loans | 489 | 240 | 2 | 33 | 9 | 773 | ||||||||
| Provision for (recovery of) credit losses on performing loans | 76 | (69 | ) | 1 | 23 | (7 | ) | 24 | ||||||
| Total provision for credit losses | 565 | 171 | 3 | 56 | 2 | 797 | ||||||||
| Depreciation and amortization | 162 | 224 | 67 | 80 | - | 533 | ||||||||
| Non-interest expense | 1,177 | 1,235 | 983 | 1,059 | 118 | 4,572 | ||||||||
| Income (loss) before taxes and non-controlling interest in subsidiaries | 1,194 | 911 | 579 | 581 | (179 | ) | 3,086 | |||||||
| Provision for (recovery of) income taxes | 327 | 202 | 143 | 143 | (59 | ) | 756 | |||||||
| Reported net income (loss) | 867 | $ | 709 | $ | 436 | $ | 438 | $ | (120 | ) | $ | 2,330 | ||
| Non-controlling interest in subsidiaries | - | $ | 2 | $ | - | $ | - | $ | 1 | $ | 3 | |||
| Net income (loss) attributable to bank shareholders | 867 | $ | 707 | $ | 436 | $ | 438 | $ | (121 | ) | $ | 2,327 | ||
| Average assets (3) | 345,353 | $ | 234,022 | $ | 71,145 | $ | 514,826 | $ | 268,396 | $ | 1,433,742 | |||
| For the three months ended July 31, 2024 | U.S. P&C (1) | BMO WM | BMO CM (1) | Corporate<br>Services (1) (2) | Total | |||||||||
| Net interest income | 2,253 | $ | 2,056 | $ | 326 | $ | 479 | $ | (320 | ) | $ | 4,794 | ||
| Non-interest revenue | 655 | 397 | 1,113 | 1,187 | 46 | 3,398 | ||||||||
| Total Revenue | 2,908 | 2,453 | 1,439 | 1,666 | (274 | ) | 8,192 | |||||||
| Provision for credit losses on impaired loans | 353 | 368 | 1 | 92 | 14 | 828 | ||||||||
| Provision for (recovery of) credit losses on performing loans | 35 | 26 | (10 | ) | 36 | (9 | ) | 78 | ||||||
| Total provision for (recovery of) credit losses | 388 | 394 | (9 | ) | 128 | 5 | 906 | |||||||
| Depreciation and amortization | 151 | 239 | 65 | 75 | - | 530 | ||||||||
| Non-interest expense | 1,109 | 1,253 | 904 | 972 | 71 | 4,309 | ||||||||
| Income (loss) before taxes and non-controlling interest in subsidiaries | 1,260 | 567 | 479 | 491 | (350 | ) | 2,447 | |||||||
| Provision for (recovery of) income taxes | 346 | 97 | 117 | 102 | (80 | ) | 582 | |||||||
| Reported net income (loss) | 914 | $ | 470 | $ | 362 | $ | 389 | $ | (270 | ) | $ | 1,865 | ||
| Non-controlling interest in subsidiaries | - | $ | (3 | ) | $ | - | $ | - | $ | 3 | $ | - | ||
| Net income (loss) attributable to bank shareholders | 914 | $ | 473 | $ | 362 | $ | 389 | $ | (273 | ) | $ | 1,865 | ||
| Average assets (3) | 329,786 | $ | 240,484 | $ | 65,428 | $ | 475,893 | $ | 274,275 | $ | 1,385,866 |
All values are in US Dollars.
| (1) | Operating groups report on a taxable equivalent basis (teb). Net interest income, revenue and the provision for income taxes are increased on <br>tax-exempt<br> securities to an equivalent <br>before-tax<br> basis to facilitate comparisons of income between taxable and <br>tax-exempt<br> sources. The offset to the groups’ teb adjustments is reflected in Corporate Services net interest income, revenue and provision for income taxes. | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (2) | Corporate Services includes Technology and Operations. | |||||||||||||
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| (3) | Included within average assets are average earning assets, which are comprised of deposits with other banks, deposits at central banks, securities borrowed or purchased under resale agreements, loans and securities. Total average earning assets for <br>the<br>three months ended July 31, 2025 are $1,287,815 million, including $343,805 million for Canadian P&C, $214,154 million for U.S. P&C, and $729,856 million for all other operating segments including Corporate Services (for<br>the<br>three months ended July 31, 2024 - Total: $1,258,977 million, Canadian P&C: $323,485 million, U.S. P&C: $219,443 million and all other operating segments: $716,049 million). | |||||||||||||
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| 70<br> BMO Financial Group Third Quarter Report 2025 | ||||||||||||||
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| (Canadian in millions) | ||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| For the nine months ended July 31, 2025 | U.S. P&C<br>(1) | BMO WM | BMO CM<br>(1) | Corporate<br>Services<br>(1)<br><br>(2) | Total | |||||||||
| Net interest income | 7,203 | $ | 6,432 | $ | 1,097 | $ | 1,902 | $ | (643 | ) | $ | 15,991 | ||
| Non-interest revenue | 1,934 | 1,313 | 3,649 | 3,726 | 320 | 10,942 | ||||||||
| Total Revenue | 9,137 | 7,745 | 4,746 | 5,628 | (323 | ) | 26,933 | |||||||
| Provision for credit losses on impaired loans | 1,456 | 799 | 5 | 96 | 41 | 2,397 | ||||||||
| Provision for (recovery of) credit losses on performing loans | 259 | 120 | 6 | 107 | (27 | ) | 465 | |||||||
| Total provision for credit losses | 1,715 | 919 | 11 | 203 | 14 | 2,862 | ||||||||
| Depreciation and amortization | 472 | 707 | 199 | 244 | - | 1,622 | ||||||||
| Non-interest expense | 3,446 | 3,796 | 2,987 | 3,250 | 450 | 13,929 | ||||||||
| Income (loss) before taxes and non-controlling interest in subsidiaries | 3,504 | 2,323 | 1,549 | 1,931 | (787 | ) | 8,520 | |||||||
| Provision for (recovery of) income taxes | 961 | 488 | 383 | 475 | (217 | ) | 2,090 | |||||||
| Reported net income (loss) | 2,543 | $ | 1,835 | $ | 1,166 | $ | 1,456 | $ | (570 | ) | $ | 6,430 | ||
| Non-controlling interest in subsidiaries | - | $ | 7 | $ | - | $ | - | $ | 2 | $ | 9 | |||
| Net income (loss) attributable to bank shareholders | 2,543 | $ | 1,828 | $ | 1,166 | $ | 1,456 | $ | (572 | ) | $ | 6,421 | ||
| Average assets (3) | 343,543 | $ | 241,930 | $ | 70,725 | $ | 552,471 | $ | 277,453 | $ | 1,486,122 | |||
| For the nine months ended July 31, 2024 | U.S. P&C (1) | BMO WM | BMO CM (1) | Corporate<br>Services (1) (2) | Total | |||||||||
| Net interest income | 6,548 | $ | 6,108 | $ | 973 | $ | 1,342 | $ | (941 | ) | $ | 14,030 | ||
| Non-interest revenue | 1,957 | 1,188 | 3,187 | 3,574 | (98 | ) | 9,808 | |||||||
| Total Revenue | 8,505 | 7,296 | 4,160 | 4,916 | (1,039 | ) | 23,838 | |||||||
| Provision for credit losses on impaired loans | 886 | 839 | 10 | 164 | 60 | 1,959 | ||||||||
| Provision for (recovery of) credit losses on performing loans | 195 | 126 | (13 | ) | (6 | ) | (23 | ) | 279 | |||||
| Total provision for credit losses | 1,081 | 965 | (3 | ) | 158 | 37 | 2,238 | |||||||
| Depreciation and amortization | 439 | 723 | 198 | 226 | - | 1,586 | ||||||||
| Non-interest expense | 3,247 | 3,676 | 2,746 | 2,965 | 852 | 13,486 | ||||||||
| Income (loss) before taxes and non-controlling interest in subsidiaries | 3,738 | 1,932 | 1,219 | 1,567 | (1,928 | ) | 6,528 | |||||||
| Provision for (recovery of) income taxes | 1,031 | 359 | 297 | 326 | (508 | ) | 1,505 | |||||||
| Reported net income (loss) | 2,707 | $ | 1,573 | $ | 922 | $ | 1,241 | $ | (1,420 | ) | $ | 5,023 | ||
| Non-controlling interest in subsidiaries | - | $ | 1 | $ | - | $ | - | $ | 5 | $ | 6 | |||
| Net income (loss) attributable to bank shareholders | 2,707 | $ | 1,572 | $ | 922 | $ | 1,241 | $ | (1,425 | ) | $ | 5,017 | ||
| Average assets (3) | 324,846 | $ | 236,323 | $ | 63,877 | $ | 456,676 | $ | 271,060 | $ | 1,352,782 |
All values are in US Dollars.
| (1) | Operating groups report on a taxable equivalent basis (teb). Net interest income, revenue and the provision for income taxes are increased on <br>tax-exempt<br> securities to an equivalent <br>before-tax<br> basis to facilitate comparisons of income between taxable and <br>tax-exempt<br> sources. The offset to the groups’ teb adjustments is reflected in Corporate Services net interest income, revenue and provision for income taxes. |
|---|---|
| (2) | Corporate Services includes Technology and Operations. |
| --- | --- |
| (3) | Included within average assets are average earning assets, which are comprised of deposits with other banks, deposits at central banks, securities borrowed or purchased under resale agreements, loans and securities. Total average earning assets for <br>the<br>nine months ended July 31, 2025 are $1,305,339 million, including $341,670 million for Canadian P&C, $221,462 million for U.S. P&C, and $742,207 million for all other operating segments including Corporate Services (for<br>the<br> nine months ended July 31, 2024—Total: $1,223,370 million, Canadian P&C: $314,450 million, U.S. P&C: $215,797 million and all other operating segments: $693,123 million). |
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Note 13: Acquisition
Burgundy Asset Management Ltd.
On June 19, 2025, we announced a definitive agreement to acquire Burgundy Asset Management Ltd. (Burgundy), a leading independent wealth manager, providing discretionary investment management for private clients, foundations, endowments, pensions and family offices. The purchase price is $625 million, payable in
shares of a wholly-owned subsidiary of BMO that are exchangeable into BMO common shares, including a $125 million holdback to be paid subject to Burgundy maintaining certain assets under management 18 months post-closing. An earn-out component may also be paid in the future based on the achievement of certain growth targets. The acquisition is subject to regulatory approvals and is expected to close by the end of calendar 2025. Burgundy will form part of the BMO Wealth Management reporting segment. The impact of this acquisition is not expected to be material to the bank.
| BMO Financial Group Third Quarter Report 2025 <br>71 |
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EX-99.3
Exhibit 99.3
CONSOLIDATED CAPITALIZATION OF BANK OF MONTREAL
The following table sets forth the consolidated capitalization of the Bank as at July 31, 2025.
| As at<br>July 31, 2025 | ||
|---|---|---|
| (in millions of Canadian<br>dollars) | ||
| Subordinated Debt | 8,466 | |
| Total Equity | ||
| Preferred Shares^(1)^ and Other Equity Instruments^(2)^ | 9,156 | |
| Common Shares | 23,554 | |
| Contributed Surplus | 368 | |
| Retained Earnings | 47,554 | |
| Accumulated Other Comprehensive Income | 6,091 | |
| Total Shareholders’ Equity | 86,723 | |
| Non-controlling Interest in Subsidiaries | 42 | |
| Total Equity | 86,765 | |
| Total Capitalization | 95,231 |
Notes:
| (1) | Preferred Shares classified under Total Equity consist of Class B Preferred Shares Series 33, 44, 50 and 52. For<br>more information on the classification of Preferred Shares, please refer to Note 6 of the unaudited interim consolidated financial statements of Bank of Montreal for the nine months ended July 31, 2025. |
|---|---|
| (2) | The Other Equity Instruments described under Total Equity consist of Additional Tier 1 Capital Notes and Limited Recourse<br>Capital Notes, Series 1, 2, 3, 4, 5 and 6. Please refer to Note 6 of the unaudited interim consolidated financial statements of Bank of Montreal for the nine months ended July 31, 2025. |
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