BMO Financial Group Nears U.S. Optimization, Eyes Loan Growth

BMO Financial Group is nearing completion of a strategic overhaul of its U.S. Operations and anticipates positive commercial loan growth in the latter half of its 2026 fiscal year, buoyed by a robust U.S. Economy. The Canadian bank reported a strong first-quarter profit of $1.82 billion (USD) for its 2026 fiscal year, bringing it closer to achieving its profitability targets.

U.S. Optimization Nears Completion

BMO’s optimization plan, aimed at boosting return on assets (ROA) to 12% in its U.S. Segment over the next three to five years, is approximately 90% complete, with finalization expected between February and April of 2026 according to BMO U.S. CEO Darrel Hackett. This involved shedding low-yield loans and high-cost deposits.

As part of this strategy, BMO previously sold a nonrelationship credit card portfolio and exited an underperforming franchise loan portfolio. A key component of the plan included the sale of 138 branches in North Dakota, South Dakota, Wyoming, Nebraska, Kansas, Missouri, Oklahoma, Idaho, western Minnesota, eastern Oregon, and southern Illinois to First Citizens BancShares as announced in October 2025. This transaction is expected to close in the second half of 2026.

BMO plans to reinvest capital by opening 150 new branches over the next five years, with a particular focus on California, though expansion will not be limited to that state .

Financial Performance and Outlook

BMO reported a first-quarter net income of $539 million for its U.S. Banking unit, a 21% increase year-over-year. Revenues in the U.S. Segment rose by 2% to $2.1 billion. The U.S. Segment’s ROE reached 7.9% for the three months ending January 31, up from 6.5% a year prior.

Company-wide, BMO’s first-quarter net income totaled $1.82 billion, a 16% year-over-year increase. The acquisition of Burgundy Asset Management in November contributed to a 14% increase in wealth revenue, reaching $1.1 billion. Canadian personal and commercial banking operations also saw a 7% revenue increase, reaching $2.38 billion.

BMO CEO Darryl White expressed confidence in achieving the company-wide ROA target of 15% by the end of fiscal 2027. The company’s overall ROE for the quarter was 12.1%.

“First-quarter results were very strong,” White said. “We’re executing on our commitment to deliver higher returns and profitable earnings growth.”

BMO anticipates positive commercial loan growth in the second half of the year, supported by strong loan pipelines. BMO U.S. President Aron Levine projects U.S. Loan growth in the mid-single digits, aligning with the broader U.S. Banking industry, which experienced 2% loan growth between the third and fourth quarters of 2025 .

About BMO Financial Group

Bank of Montreal, operating as BMO Financial Group in the United States, is a Canadian multinational investment bank and financial services company founded in 1817 . It serves 13 million customers across Canada, the United States, and select global markets, offering a range of banking, wealth management, and investment services .