Executives at BMO Financial Group say the economic outlook in Canada and the U.S. is becoming steadier, but the bank is still bracing for trade and geopolitical ups and downs in the months ahead.
"Early this year, my uncertainty meter was very high and today it's less high. It doesn't mean there's no uncertainty," chief executive Darryl White told analysts on a conference call Tuesday to discuss the bank's third-quarter results.
"The confidence in the outlook today is one that's just a little easier to call than it was six months ago."
He said trade risks in North America have eased, as most industries are compliant with the Canada-U.S.-Mexico trade agreement and sheltered from U.S. President Donald Trump's tariffs.
Government support for tariff-affected industries is rolling out and consumer spending has been resilient, White added.
Earlier Tuesday, BMO said its third-quarter profit rose from a year ago as its provision for credit losses fell.
Net income was $2.33 billion, or $3.14 per diluted share, for the quarter ended July 31, up from $1.87 billion, or $2.48 per diluted share, a year earlier.
Earnings were $3.23 per diluted share on an adjusted basis, up from $2.64 a year earlier.
The average analyst estimate had been for earnings of $2.95 per share, according to LSEG Data & Analytics.
Quarterly revenue totalled $8.99 billion, up from $8.19 billion.
BMO's provision for credit losses amounted to $797 million for the quarter, compared to $906 million a year earlier.
"Our impaired provisions have been trending down this year in line with our expectations. At the same time, we remain cautious as the full impacts from the current tariff announcements have yet to flow through the economy and the policy environment remains evolving," chief risk officer Piyush Agrawal said.
"We are actively managing risks through disciplined portfolio management and direct client engagement. We also expect monetary policy to be supportive."
At the moment, the U.S. economy seems to be on a bit more solid footing than Canada's, the executives said.
"I'm confident about the quality of our books in both north and south. It's the economic uncertainty that just needs a little bit more resolution, especially for Canada," said Agrawal, citing more pronounced retail weakness north of the border, where BMO has a bigger portfolio.
White said Canada appears to be in a tepid growth environment.
"It's neither robust, nor does it feel recessionary in Canada," he said.
As for whether things improve in 2026, White said much will depend on government actions.
"We've definitely got a positive narrative in terms of pro-growth and pro-economy policy today that I think is a welcome improvement from what we had seen in the past. But at the same time there, we need to see actions behind words."
BMO's Canadian personal and commercial banking business earned $867 million in its latest quarter, down from $914 million a year ago, as higher revenue was more than offset by higher expenses and a higher provision for credit losses.
In the U.S., BMO said its personal and commercial banking business earned $709 million, up from $470 million in the same quarter last year.
BMO said its wealth management business earned $436 million, up from $362 million a year ago, while its capital markets business earned $438 million, up from $389 million in the same quarter last year.
BMO's corporate services group reported a net loss of $120 million, compared with a net loss of $270 million a year earlier.
This report by The Canadian Press was first published Aug. 26, 2025.
Companies in this story: (TSX:BMO)
Lauren Krugel, The Canadian Press
