Bank of Montreal Announces 30 Million Share Buyback Plan, Representing 4.19% of Issued Capital.

Bank of Montreal (TSX:BMO) announced a normal course issuer bid to repurchase up to 30,000,000 shares, representing 4.19% of its issued share capital. The bid is subject to approval from the Office of the Superintendent of Financial Institutions Canada and the Toronto Stock Exchange. It will be valid for one year after commencement and is based on 716,360,515 common shares issued and outstanding as of July 31, 2025.

Bank of Montreal (TSX: BMO) has announced a significant expansion of its share buyback program. The bank plans to repurchase up to 30 million shares, representing approximately 4.19% of its issued share capital. This new normal course issuer bid is subject to approval from the Office of the Superintendent of Financial Institutions Canada and the Toronto Stock Exchange [1].

The existing share buyback program, which was set to end on January 21, 2026, had an authorization of up to 20 million shares. However, Bank of Montreal has decided to terminate this program and introduce a new, larger buyback initiative. The new program will be valid for one year after commencement, with the total number of shares outstanding as of July 31, 2025, being 716,360,515 [2].

The decision to expand the share buyback program comes amidst strong financial performance. Bank of Montreal reported a third-quarter net income of C$2.33 billion, or C$3.14 per share, for the fiscal quarter ending July 31, 2025. This represents a significant increase compared to the same period last year, where net income was C$1.87 billion, or C$2.48 per share [1].

The expanded share buyback program signals the bank's capital strength and commitment to shareholder value. By repurchasing shares, Bank of Montreal aims to increase earnings per share by reducing the outstanding share count. This strategy can also support the share price by absorbing excess market supply and signal management's confidence in the bank's financial position [2].

The timing of this announcement is notable, as it comes while the bank has already executed over 78% of its originally authorized share repurchases under the existing program. This indicates that management sees continued value in deploying capital towards share repurchases rather than alternative uses like aggressive lending growth or larger acquisitions [2].

For shareholders, the expanded buyback program represents a tax-efficient alternative to dividends, enhancing share value without creating immediate taxable events for continuing shareholders. The discretionary nature of the program allows BMO to maintain flexibility in its capital position and adjust repurchases based on market conditions and capital adequacy considerations [2].

References:
[1] https://www.marketscreener.com/news/bank-of-montreal-plans-to-adopt-larger-share-buyback-program-ce7c50d9d88af526
[2] https://www.stocktitan.net/news/BMO/bmo-financial-group-announces-intention-to-purchase-for-cancellation-sx8cbf8t51uu.html