Bank of Montreal Q4 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Paul Holden - CIBC World Markets Corp - Analyst : Yeah, thank you. Good morning. Question on ROE. Now, given the 11.3% in '25, we wouldn't expect you to increase the target at this point, that's for sure. But just wondering in terms of that 15% target, do you think it's realistic that you could achieve that in 2027 given the pace at which you're executing against your strategy? Is it a realistic objective? Or are we going to have to wait a little bit longer?

Question: Paul Holden - CIBC World Markets Corp - Analyst : Okay. I'll leave that as my one question. Thank you.

Question: Ebrahim Poonawala - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Hey. Good morning. I guess just two questions, one or two-part questions since we can only ask one. I guess when we think about the commercial loan growth outlook, ex your optimization actions, and I understand that's going to mitigate growth in the near term. But when we look at the US, there are obviously mixed signals around what's happening with the economy. Are you actually seeing signs that the tax bill is having an impact in how businesses are behaving around investments and hiring? And when you look at the first-half loan growth in the US, one, like do you see a pickup? Or do you see risks of downside given the tariff uncertainties? And similarly, in Canada, what needs to happen to really lift the macro overhang if we don't get some clarity on CUSMA maybe until the back half of '26? Thank you.

Question: Ebrahim Poonawala - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Got it. Any [clarifications] on Canada? Yeah, thank you. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 04, 2025 / 1:30PM, BMO.TO - Q4 2025 Bank of Montreal Earnings Call

Question: Ebrahim Poonawala - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Good color. Thank you both.

Question: Gabriel Dechaine - National Bank Financial Research - Analyst : Hi. Good morning. I know the impaired PCL discussion over the past while has focused on the US, but I want to ask about the Canadian credit card book. We're seeing the delinquency rates there rise above the peer average. We're seeing the balances shrink over the course of the year. And I'm wondering what I should take away from that data. Did you grow too fast at a certain point in time? Are we maybe going to see a blip in post-Christmas period credit metrics? And then I'll throw this one in there while I'm at it for Darryl. M&A, would you be willing to issue stock to do a deal? Or are you looking at more tuck-in type things? Thanks.

Question: Gabriel Dechaine - National Bank Financial Research - Analyst : Got it.

Question: Mario Mendonca - Cowen and Company LLC - Analyst : Good morning. Sort of similar question to what Gabe just asked on acquisition, there's plenty of speculation that BMO is actively looking to make an acquisition in the US Banking. And I know it's difficult for you to comment on that speculation because that's a bit of speculation, but perhaps you could speak to this. If BMO were to do a deal in the US, would you sacrifice that ROE target of 12% at least for a few years for the benefit of that increased scale?

Question: Mario Mendonca - Cowen and Company LLC - Analyst : Okay. And I need one quick clarification on the restructuring. Is that a number you're leaving in the core number? Or are you going to take that out and adjust that for it? It sounds like you're leaving it in, but some clarification.

Question: Mario Mendonca - Cowen and Company LLC - Analyst : Okay. Thanks.

Question: Darko Mihelic - RBC Capital Markets Inc - Analyst : Hi. Thank you. I have a two-part question. Just the first part of this is just a clarification on the Corporate segment. Can you just speak to what it was that you did in the quarter that had this segment do much better than the typical loss? And importantly for me, whatever was done in there, it doesn't seem like it has any kind of impact on the tractoring or anything like that. That's just the most important part of the answer to that. And the second part of my question is completely unrelated to the disclosure you provided, Piyush. And one of the things on NBFI, one of the things I just want to confirm with you is you mentioned in your remarks that there's no losses, so to speak, in a significant part of this book. I guess where I'm going with that is were there losses in the other parts of the book? And specifically, Piyush, I'm very interested in understanding if any part of this NBFI lending contributed to the higher losses we saw in '24 and, to some extent, '25. Thank you.

Question: Darko Mihelic - RBC Capital Markets Inc - Analyst : Okay. Thank you for the call. I appreciate it.

Question: Ebrahim Poonawala - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Okay. Thank you. So I guess, Tayfun, for you, as we think about the regulatory changes in the US, the SLR change, et cetera, does any of that actually impact how you think about the capital levels within BMO's US bank or the holding company? Like could any of that change? And I'm just wondering, as we think about the path to the 12% ROE, is there an element of capital flex that we may be underappreciating, especially in light of what seems like we could have a pretty busy period of rulemaking in the US around some of the capital requirements? Thanks.

Question: Ebrahim Poonawala - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Got it. And if I could follow up, maybe, Darryl, for you, given just how frequently bank M&A comes up with any conversation on BMO. One, why would you not want to do a deal in a world where the regulatory backdrop is wide open, you have excess capital? I'm assuming you could deploy some of that US capital in a deal. I get it needs to meet the financial hurdles, but wouldn't scale be the way to go when you think about density, regional scale, a priority for you? Thanks.

Question: Ebrahim Poonawala - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Got it. Thank you very much. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 04, 2025 / 1:30PM, BMO.TO - Q4 2025 Bank of Montreal Earnings Call