{"id":100169,"date":"2025-08-27T06:23:13","date_gmt":"2025-08-27T06:23:13","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/100169\/"},"modified":"2025-08-27T06:23:13","modified_gmt":"2025-08-27T06:23:13","slug":"bmo-scotiabank-top-earnings-forecasts-but-sound-wary-note-for-road-ahead","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/100169\/","title":{"rendered":"BMO, Scotiabank top earnings forecasts but sound wary note for road ahead"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

Bank of Montreal and Bank of Nova Scotia reported profits that exceeded expectations and lower-than-anticipated loan loss provisions.Reuters<\/p>\n

Two of the country\u2019s biggest banks delivered better-than-expected financial performance as their leaders sounded a note of cautious optimism about the economy\u2019s prospects. <\/p>\n

On Tuesday, Bank of Montreal BMO-T<\/a> and Bank of Nova Scotia BNS-T<\/a> kicked off reporting of results for the quarter ended July 31 with profits that exceeded expectations and lower-than-anticipated loan loss provisions. Executives at the two lenders struck a more upbeat tone than in previous quarters, when the prospect of trade war translated into increased reserves for bad loans. <\/p>\n

Darryl White, chief executive officer at BMO, said the business uncertainty created by U.S. President Donald Trump\u2019s tariff policies has receded in recent months. He said ahead of the potential renegotiation of the trade pact between Canada, the United States and Mexico next year that \u201cthe economy is proceeding as expected, neither robust nor recessionary.\u201d<\/p>\n

At Scotiabank, chief risk officer Phil Thomas said: \u201cIf I look at where we are now versus where we were last quarter: some big improvements, particularly on the retail side.\u201d <\/p>\n

\u201cI\u2019m encouraged by the trends, however I don\u2019t think the worst has necessarily passed us and I think we still need to be very thoughtful about the macroeconomic dynamic,\u201d Mr. Thomas said. <\/p>\n

BMO\u2019s and Scotiabank\u2019s share prices jumped after the lenders released results, with BMO stock closing up 4.7 per cent and Scotiabank gaining 6.9 per cent on Tuesday. So far this year, domestic bank stocks have made a major contribution to the 13.9-per-cent rise in the S&P\/TSX benchmark index. <\/p>\n

BMO reported a $2.22-billion profit in the three months ended July 31, up 25 per cent from $1.87-billion in the same period a year ago. The bank\u2019s earnings per share rose 26 per cent to $3.14, compared with $2.48.<\/p>\n

The bank\u2019s adjusted net income, the measure of profit investors focus on, was $2.4-billion or $3.23 per share. That compared with $1.98-billion or $2.64 a year earlier. BMO\u2019s results beat analysts\u2019 consensus estimate of a $2.97 per share profit.<\/p>\n

BMO increased the size of its stock buyback program to 30 million shares, from 20 million, subject to approval by regulators and the Toronto Stock Exchange. The increase in BMO\u2019s normal course issuer bid is one of the ways the bank can return more of its excess capital to shareholders. <\/p>\n

Meanwhile, Scotiabank posted a $2.53-billion quarterly profit or $1.84 per share, compared with $1.91-billion or $1.41 in the same quarter last year. The bank\u2019s adjusted earnings per share were $1.88. Analysts forecast adjusted earnings of $1.73 a share.<\/p>\n

\u201cBNS reported one of the strongest quarters we\u2019ve seen from the bank in a long time,\u201d said analyst Gabriel Dechaine at National Bank Financial in a report. \u201cDespite the better-than-expected credit performance, the bank maintained cautious\/conservative guidance,\u201d he wrote.<\/p>\n

Scotiabank\u2019s provision for credit losses was $1.04-billion, a decrease of just $11-million from the same quarter a year ago. Mr. Thomas said performance improved in the bank\u2019s consumer credit portfolio, including auto loans. He said: \u201cWe\u2019re starting to see the pig moving through the python.\u201d<\/p>\n

Opinion: Canadian banks are strong. Their regulators are not<\/a><\/p>\n

Consumer credit card spending data has shown an increase in discretionary spending, Mr. Thomas said. However, domestic confidence is still under stress, especially in younger clients.<\/p>\n

\u201cThere\u2019s some green shoots coming but we\u2019re still really cautiously optimistic about the outlook,\u201d Mr. Thomas said. <\/p>\n

In June, BMO announced plans<\/a> to expand its wealth management platform by buying employee-owned Burgundy Asset Management Ltd. for $625-million. The Toronto-based firm manages $27-billion for wealthy clients and institutions. On Tuesday, Mr. White said: \u201c\u201dWe continue to invest to drive sustainable growth across our businesses, including our recently announced acquisition of Burgundy.”<\/p>\n

Mr. White has focused on improving BMO\u2019s return on equity (ROE) after acquiring San Francisco-based Bank of the West in 2023 for US$16.3-billion. The lender\u2019s adjusted ROE rose to 12 per cent in the most recent quarter, from 10.6 per cent in the same period a year ago.<\/p>\n

\u201cBMO posted a solid quarter,\u201d said analyst Paul Holden at CIBC Capital Markets. \u201cOur confidence that BMO is past peak provisions for credit losses increases, and progress against ROE expansion targets is good.\u201d <\/p>\n

Scotiabank also significantly increased its profitability, with adjusted ROE rising to 12.4 per cent, compared with 11.3 per cent a year ago. In a press release, CEO Scott Thomson said: \u201cWe reported improving revenue growth which helped drive another quarter of positive operating leverage and pushed our return on equity meaningfully higher.\u201d<\/p>\n

Last August, Scotiabank built a toehold in the U.S. regional banking market by buying a 14.09-per-cent stake in KeyCorp. for $2.8-billion. In the most recent quarter, Scotiabank earned $68-million on its stake in the Cleveland-based lender. KeyCorp\u2019s share price is up 13 per cent since Scotiabank\u2019s purchase.<\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: Bank of Montreal and Bank of Nova Scotia reported profits that exceeded expectations…\n","protected":false},"author":2,"featured_media":100170,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[901,888,902,879,877,903,48,876,895,896,891,878,875,46,549,295,894,887,914,880,881,893,43,889,890,884,904,885,909,910,44,912,907,911,905,908,882,898,899,714,897,906,865,61,41,39,42,40,900,892,886,883,913],"class_list":["post-100169","post","type-post","status-publish","format-standard","has-post-thumbnail","category-headlines","tag-alberta","tag-arts-news","tag-bc","tag-breaking-news","tag-breaking-news-video","tag-british-columbia","tag-canada","tag-canada-news","tag-canada-sports","tag-canada-sports-news","tag-canada-trafficcanada-weather","tag-canadian-breaking-news","tag-canadian-news","tag-economy","tag-education","tag-environment","tag-federal-government","tag-foreign-news","tag-globe-and-mail","tag-globe-and-mail-breaking-news","tag-globe-and-mail-canada-news","tag-government","tag-headlines","tag-life-news","tag-lifestyle","tag-local-news","tag-manitoba","tag-national-news","tag-new-brunswick","tag-newfoundland-and-labrador","tag-news","tag-northwest-territories","tag-nova-scotia","tag-nunavut","tag-ontario","tag-pei","tag-photos","tag-political-news","tag-political-opinion","tag-politics","tag-politics-news","tag-quebec","tag-sports-news","tag-technology","tag-top-news","tag-top-stories","tag-topnews","tag-topstories","tag-travel","tag-trudeau","tag-us-news","tag-world-news","tag-yukon"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/100169","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=100169"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/100169\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/100170"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=100169"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=100169"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=100169"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}