BMO and Scotiabank Defy Trade Tensions with Surprising Earnings

Canada's Bank of Montreal (BMO) and Scotiabank reported quarterly earnings that exceeded profit expectations despite escalating US-Canada trade tensions. The banks' CEOs expressed confidence in their clients' ability to adapt through liquidity management, supply chain adjustments, and market diversification. The Canadian economy showed resilience with strong job growth and low unemployment, supporting the banks' positive outlook.

Both banks' shares rose, with Scotiabank hitting a record high, reflecting investor confidence in their capacity to navigate the challenging trade environment. Bank of Montreal reported a solid fiscal third quarter with an adjusted return on equity (ROE) of 14%, showing growth across all business segments. The bank aims to achieve a sustainable 15% ROE by fiscal year 2027.

The banks' quarterly earnings per share exceeded analyst expectations, driven by strong performance in their US banking and capital markets results. Revenue rose, exceeding forecasts. Despite concerns about the current market, Bank of Montreal plans to buy back up to 25 million shares starting September 8, 2026, pending regulatory approvals.