Bank of Montreal Earnings: Decent Fourth Quarter, With More Cost Savings on the Way

Narrow-moat-rated Bank of Montreal reported OK fiscal fourth-quarter earnings. As expected, results were quite messy with multiple one-time charges. Adjusted earnings per share came in at CAD 2.81, a decrease of 8% year over year and 1% sequentially. Management highlighted updated Bank of the West cost synergies of about $800 million from the previous $670 million. However, the fully realized pretax preprovision earnings benefit of $2 billion was unchanged, implying some of the nonexpense benefits had decreased. Management also delayed the fully realized pretax preprovision schedule by one or two quarters, into the first half of 2026. This supports our thesis that it’s more difficult to realize revenue synergies than cost savings.