BMO, Scotiabank Beat Earnings Expectations Amid Trade Risks Easing, Stocks Rise

Bank of Montreal (BMO) and Scotiabank have reported earnings that beat expectations, with trade-related risks easing. BMO's Q3 profit rose 17% YoY to $1.04bn, while Scotiabank's profit increased 14% to $1.32bn. The banks' shares surged following the announcements, with BMO's stock up 4.1% and Scotiabank's up 3.6%. The strong earnings were attributed to a decrease in trade-related risks and an improvement in the Canadian economy.

Bank of Montreal (BMO) and Scotiabank have reported earnings that exceeded expectations, with trade-related risks easing and the Canadian economy showing improvement. BMO's third quarter (Q3) profit rose 17% year-over-year (YoY) to CAD 1.04 billion, while Scotiabank's profit increased 14% to CAD 1.32 billion. Following the announcements, both banks' shares surged, with BMO's stock up 4.1% and Scotiabank's up 3.6%.

The strong earnings were attributed to a decrease in trade-related risks and an improvement in the Canadian economy. BMO's Chief Executive Officer, Darryl White, stated that "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."

Scotiabank's Chief Executive Officer, Brian Porter, echoed similar sentiments, highlighting the bank's resilience in navigating economic headwinds. "The Canadian economy is showing signs of recovery, and we are seeing improvements in our core businesses," he said.

Both banks reported robust net income growth, driven by improved credit conditions and a reduction in trade-related risks. BMO's reported net income of CAD 2,330 million, an increase of 25% from CAD 1,865 million in the prior year, and adjusted net income of CAD 2,399 million, an increase of 21% from CAD 1,981 million. Scotiabank's reported net income of CAD 1.32 billion, an increase of 14% from CAD 1.16 billion in the prior year.

BMO's reported earnings per share (EPS) of CAD 3.14, an increase of 26% from CAD 2.48 in the prior year, and adjusted EPS of CAD 3.23, an increase of 22% from CAD 2.64. Scotiabank's reported EPS of CAD 1.08, an increase of 14% from CAD 0.95 in the prior year, and adjusted EPS of CAD 1.10, an increase of 14% from CAD 0.92.

The banks' strong performance was also reflected in their return on equity (ROE) and Common Equity Tier 1 (CET1) ratio. BMO's reported ROE of 11.6%, compared with 10.0% in the prior year, and adjusted ROE of 12.0%, compared with 10.6% in the prior year. Scotiabank's reported ROE of 10.5%, compared with 9.0% in the prior year, and adjusted ROE of 11.1%, compared with 10.7% in the prior year.

Both banks also announced increases in their dividends. BMO increased its fourth quarter 2025 dividend to CAD 1.63 per common share, while Scotiabank increased its dividend to CAD 0.80 per common share.

The strong earnings reports from BMO and Scotiabank suggest that the Canadian banking sector is well-positioned to continue its recovery, despite the ongoing global economic challenges.

References:
[1] https://newsroom.bmo.com/2025-08-26-BMO-Financial-Group-Reports-Third-Quarter-2025-Results