BMO Capital Markets sees strong underwriting & advisory fees

BMO Capital Markets sees strong underwriting & advisory fees

TORONTO, July 2, 2025 — BMO Financial Group (TSX: BMO) (NYSE: BMO) has reported strong financial results for the third quarter of 2025, with BMO Capital Markets (BMO CM) seeing notable growth in underwriting and advisory fees. The quarterly results, released on August 26, 2025, highlight the bank's resilience and profitability across various business segments, including its capital markets division.

The third quarter of 2025 saw BMO CM's reported net income increase by $49 million, or 13%, compared to the same period in 2024. This growth was driven by higher revenue, particularly in Global Markets and Investment and Corporate Banking, while expenses and provisions for credit losses remained relatively stable. The division's adjusted net income, which excludes certain specified items, also increased by $48 million, or 12%, reflecting the bank's strong performance in underwriting and advisory services.

Key highlights of BMO CM's performance include:

- Underwriting and Advisory Fees: BMO CM reported significant growth in underwriting and advisory fees, contributing to the overall increase in revenue. These fees are a crucial indicator of the bank's ability to attract and retain clients, as well as its success in executing complex financial transactions.

- Global Markets and Investment Banking: The division saw robust growth in Global Markets and Investment Banking, with higher revenue driven by increased client activity and favorable market conditions. This growth was partially offset by higher expenses and a lower provision for credit losses, which improved the division's overall profitability.

- Credit Quality: The total provision for credit losses in BMO CM decreased by $55 million, largely due to lower provisions in U.S. Commercial Banking and BMO Capital Markets. This improvement in credit quality underscores the bank's commitment to managing risk and maintaining strong financial health.

Darryl White, Chief Executive Officer of BMO Financial Group, commented on the quarter's performance, stating, "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."

The quarterly results also reflect BMO's strategic initiatives, including the recently announced acquisition of Burgundy Asset Management Ltd. This acquisition is expected to close by the end of 2025, subject to regulatory approvals, and will expand BMO's wealth management and financial planning capabilities.

Concurrently, 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 bank also announced its intention to terminate its existing normal course issuer bid (NCIB) and establish a new NCIB to purchase for cancellation up to 30 million common shares, subject to regulatory approval.

Overall, BMO Financial Group's third quarter 2025 results demonstrate the bank's continued strength and resilience in a challenging economic environment. The robust performance of BMO Capital Markets, particularly in underwriting and advisory fees, underscores the division's ability to generate significant revenue and drive profitability. Historical data further supports this trend: backtesting from 2022 to the present shows that BMO has delivered positive returns following earnings releases, with a 64.29% win rate over three days, 57.14% over 10 days, and 42.86% over 30 days. These results suggest that BMO's earnings-driven momentum has historically translated into consistent short- to medium-term gains for investors.

References:

[1] https://www.marketscreener.com/news/bmo-financial-group-reports-third-quarter-2025-results-ce7c50d9d98af722