BMO Financial Group Reports Profit of $1.82 Billion for Q1 2026
Canadian lender BMO Financial Group has reported a substantial $1.82 billion profit for the first quarter of its 2026 fiscal year. This impressive bottom-line result pushes BMO ever closer to achieving its twin profitability targets: a 15% return on assets (ROA) for company-wide operations and a 12% ROA for its U.S. banking operations.
Optimizing U.S. Balance Sheet
BMO’s positive performance comes as it nears the completion of optimizing its U.S. balance sheet. The bank’s CEO, Darryl White, expressed optimism about the prospects of growing stateside loans during the second half of the 2026 fiscal year. “We expect to see positive commercial loan growth in the second half of the year, supported by currently strong pipelines,” White said during a conference call with analysts. “With the U.S. economy expected to outpace Canada for a fourth straight year … we’re well-positioned to capture growth opportunities as business activity expands.”
Projected U.S. Loan Growth
According to BMO U.S. President Aron Levine, the bank is projecting U.S. loan growth in the mid-single digits. Although no specific time frame was offered for this forecast, Levine’s prediction aligns with the broader U.S. banking industry which saw a 2% loan growth between Q3 and Q4, as per recent FDIC statistics.
Turnaround from 2025
These confident projections represent a significant turnaround from 2025. Last year, BMO, a $1.07 trillion-asset Canadian bank, focused on shedding low-yield loans and high-cost deposits in its U.S. business. Financial results for the quarter ending Jan. 31 indicate a 3% year-over-year decline in U.S. loan volume and a 5% annual decline in deposits.
U.S. Optimization Plan
As part of its U.S. optimization plan, BMO sold its nonrelationship credit card portfolio and exited an underperforming franchise loan portfolio. The bank also agreed to sell 138 branches in the Midwest and Mountain West regions to the $229.7 billion-asset First Citizens BancShares in Raleigh, North Carolina. This transaction, designed to refine BMO’s focus on high-growth markets like California, is expected to close in the second half of 2026.
Boosting U.S. Returns
According to Darrel Hackett, BMO’s U.S. CEO, the optimization program is now 90% complete, with completion expected between February and April of 2026. The program is aimed at boosting the ROA for BMO’s U.S. operation to 12% over the next three to five years. BMO reported a 7.9% ROE for its U.S. segment for the three months ending Jan. 31, up from 6.5% a year ago.
First-Quarter Results and Future Targets
BMO’s U.S. banking unit reported a 21% increase in first-quarter net income, totaling $539 million, with revenues of $2.1 billion, up 2%. Overall, BMO reported a 16% year-over-year increase in quarterly net income, totaling $1.82 billion in U.S. dollars. The bank’s company-wide 15% ROA goal is within reach and expected to be achieved by the end of fiscal 2027, according to White. The return on equity for the quarter ending Jan. 31 was 12.1%.
CEO White expressed satisfaction with the bank’s performance. “First-quarter results were very strong,” he said. “We’re executing on our commitment to deliver higher returns and profitable earnings growth.” With a strong start to 2026, it seems BMO is well on its way to achieving its profitability targets.
Source: Here
