Bank of Montreal (BMO) investor relations material

Strategic Vision, Priorities, and Business Model

• Aims to achieve and sustain 15%+ ROE by fiscal 2027–2028, anchored in core operating performance, credit normalization, and disciplined capital allocation.

• Focused on a diversified, client-centric North American strategy, with commercial banking as a core earnings engine and a unified One Client approach integrating advisory, financing, and digital solutions.

• Each business segment has clear ROE and growth targets: U.S. Banking targets 12% ROE by Q4 2027, Canadian Personal and Commercial Banking targets >25% ROE, Wealth Management aims for 40%+ ROE, and Capital Markets targets 15%+ ROE.

• Technology and AI investments are central to enhancing client experience, efficiency, and value capture, with enterprise-wide AI adoption over 96%.

• Disciplined expense, risk, and capital management underpin long-term shareholder value and sustainable ROE.

Financial Performance and Medium-Term Targets

• Delivered 150 bps ROE improvement and 26% EPS growth in 2025, with F2025 adjusted ROE at 13.1% and a target to exceed 15% by F2028.

• Operating leverage reached 4.3% and PPPT grew 18% in 2025; record revenue and PPPT in Q1 2026.

• Medium-term objectives include 15%+ ROE, 18%+ ROTCE, 7-10% EPS growth, 2%+ operating leverage, and strong capital ratios.

• Expense discipline, real estate optimization, and AI-driven efficiencies are expected to sustain positive operating leverage and improve the efficiency ratio below 54% by 2028.

• CET1 ratio is expected to be 12.5%-13% exiting 2027, supporting organic growth, selective M&A, buybacks, and a 40%-50% dividend payout.

U.S. Banking and Commercial Franchise

• U.S. franchise is a key differentiator, positioned to unlock full earnings potential with a unified structure and improved ROE.

• U.S. Banking is expanding in California, the Midwest, and the West, densifying its network and targeting mass affluent and business clients.

• Commercial banking remains a structural advantage, generating $10B in revenue and over 40% of earnings, with TPS and cross-border capabilities as key growth drivers.

• Medium-term U.S. Banking targets: 12% ROE, mid-single digit revenue CAGR, low 50s efficiency ratio, and mid-30s bps PCL impaired ratio.

• Canadian Commercial Banking is #2 in loan market share, with strong deposit growth and a low-30s efficiency ratio target.