BMO Reports Strong Loan Demand Growth Amid Rising Returns
Bank of Montreal (NYSE:BMO) reported a significant increase in loan demand with closings nearly doubling compared to the previous year, despite ongoing Canada-U.S. trade uncertainties. The bank's third-quarter return on equity rose to 14%, up from 9.8% at the end of 2024, and it is targeting 15% ROE by 2027. BMO CFO Rahul Nalgirkar highlighted strong performance across all four business units with revenue increasing 11% year-over-year and pre-provision, pre-tax income reaching a record C$4.5 billion. The bank plans to achieve its return targets through organic growth in the U.S., efficiency improvements via AI tools expected to generate $1 billion annually by 2030, and credit normalization. The U.S. banking segment showed improvement with ROE at 9.8% for Q3, up from last year. BMO is focusing on fee and deposit growth as well as cost optimization initiatives in the U.S., aiming to reach a target of 12% return on equity.
Topics: AI investment Bank of Montreal commercial lending loan demand ROE improvement