Bank of Montreal’s Chief Financial Officer Rahul Nalgirkar outlined the institution’s progress toward 2027 financial targets at an investor event, highlighting accelerating loan demand and broad-based performance improvements across its business units.
The bank reported that loan closings nearly doubled compared to the prior year following a slower period in 2025, driven by strong commercial-lending pipelines and sustained client activity despite Canada-U.S. trade uncertainty. Return on equity climbed to 14% in the third quarter from 9.8% at the end of 2024, representing a gain of approximately 220 basis points. Revenue increased 11% year-over-year, while earnings per share grew 22%. All four of the bank’s business units contributed to the expansion and reported record pre-provision, pre-tax income. Pre-provision, pre-tax income rose 13% to C$4.5 billion.
BMO is targeting a 15% return on equity and 18% return on tangible common equity by the end of 2027. Nalgirkar indicated that 50% to 60% of the remaining improvement needed to reach those targets would come from core operating performance, including fee and deposit growth and strength in personal and commercial banking, wealth management and capital markets. The remainder is expected to result from credit normalization and capital optimization. The bank is focusing on organic growth in its existing U.S. operations rather than pursuing additional acquisitions or geographic expansion.
The bank is investing in artificial intelligence capabilities expected to deliver C$1 billion in annual pre-provision, pre-tax income benefits by 2030. BMO ended the third quarter with a 13% common equity tier 1 ratio and expects pending transactions to add approximately 50 basis points. Core operating deposits increased 8% year-over-year, though total reported deposits were flat. The bank entered the fourth quarter from a position of credit strength, with gross impaired loans falling to 97 basis points, down roughly four to five basis points sequentially.
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