BMO Posts 34% Q2 Net Income Growth, Raises Dividend 5%
BMO•BMO Financial Group posted Q2 FY26 net income of C$2.63 billion, up 34% year-over-year, with EPS of C$3.53 (+41%) and ROE of 13.0%. It raised its Q3 dividend to C$1.71 per share, a 2% quarterly and 5% annual increase, and set a C$1.1 billion pre-tax charge on its planned Transportation Finance sale.
1. Strong Second Quarter Financial Performance
BMO Financial Group reported net income of C$2.63 billion for the quarter ended April 30, 2026, up 34% year-on-year, with earnings per share of C$3.53 (a 41% increase) and return on equity of 13.0%. Adjusted net income rose 34% to C$2.73 billion and adjusted EPS climbed 40% to C$3.67, while provision for credit losses fell to C$739 million. The Common Equity Tier 1 ratio stood at 13.0%, down from 13.5% a year earlier.
2. Q3 Dividend Hike
The board declared a quarterly dividend of C$1.71 per common share, representing increases of 2% from the prior quarter and 5% year-over-year, payable on August 26 to shareholders of record on July 30. Dividends are designated as eligible under the Income Tax Act and may be reinvested via the bank’s Shareholder Dividend Reinvestment Plan, with enrollment for registered holders closing August 3. A dividend of C$0.426 per share was also declared for Class B Preferred Shares Series 44, payable August 25.
3. Planned Transportation Finance Sale
On May 11, 2026, BMO entered into a definitive agreement to sell its Transportation Finance and Vendor Finance businesses to Stonepeak. The transaction, structured as a sale of business assets with an earn-out, will include an approximate 19.9% equity interest retained by BMO in the new entity. BMO expects to record a pre-tax charge of approximately C$1.1 billion in Q3 fiscal 2026, subject to closing adjustments and regulatory approvals, with closing anticipated in Q4.
