Bank of Montreal (BMO) investor relations material

Geopolitical and macroeconomic risk outlook

• Geopolitical risks, especially in the Middle East, are closely monitored and considered high priority, with potential for cascading impacts if prolonged beyond a few weeks.

• Oil price volatility and shortages, along with impacts on raw materials for food and agriculture, could drive inflation if the crisis persists.

• Canadian GDP may benefit from oil exports, but broader inflationary pressures are a concern.

• Capital and liquidity positions are strong, but expectations may need recalibration depending on crisis duration.

Credit provision and portfolio quality

• Performing provision stands at CAD 4.6 billion (69 bps), built over 15 quarters, providing resilience against uncertainty.

• No significant provision builds or releases expected in the near term due to ongoing uncertainty; neutral stance anticipated through the year.

• If Middle East conflict extends, macroeconomic outlooks for the U.S. and Canada may shift, with impacts likely first seen in performing PCL.

• Credit performance guidance remains stable, with impairments expected in the mid-40s bps through 2027.

Sector and regional portfolio insights

• U.S. retail credit performance expected to remain stable; U.S. commercial improving, though outsized recoveries may not repeat.

• Canadian retail faces some stress due to unsecured lending and macro factors, with possible Q2 builds, but overall outlook is flat to mid-40s bps.

• Commercial real estate and loan growth in Canada are showing signs of recovery as sentiment improves.