BMO details strategy to improve US profitability

Core Insights - BMO Financial Group is focusing on organic growth in the U.S. rather than pursuing bank acquisitions, aiming to enhance its market share and achieve a return on equity (ROE) of 12% within the next three to five years [2][3][11] Company Strategy - The bank's U.S. segment contributed approximately 37% of total earnings for the quarter ending October 31, but has faced challenges in realizing expected revenue synergies from the acquisition of Bank of the West [3] - CEO Darryl White emphasized the importance of a robust strategy to accelerate ROE, indicating that while acquisitions could be considered, the current focus is on organic growth [5][11] - BMO has been restructuring its U.S. operations, including selling off lower-returning loan portfolios and exiting higher-cost deposits to improve profitability [7] Financial Performance - BMO's U.S. operations reported a net income of $582 million for the most recent quarter, significantly up from $210 million in the same quarter last year, with an ROE of 8.5% [10] - The common equity Tier 1 ratio was reported at 13.3% at the end of October, exceeding the target of 12.5% [10] Future Plans - The bank plans to invest in talent, technology, and expand its U.S. branch footprint, with intentions to open 150 new branches in strategic markets [9] - BMO completed the repurchase of 22.2 million shares in the fiscal year and intends to continue share buybacks in 2026 [12]