06:20 AM EDT, 05/28/2025 (MT Newswires) -- Bank of Montreal ( BNKD ) (BMO.TO, BMO) on Wednesday reported better-than-expected earnings on "growth across each operating group and ongoing positive operating leverage" and increased its dividend although its provision for credit losses was also higher in the quarter.

For Q2, BMO had adjusted net income of $2,046 million, compared with $2,033 million. It had adjusted EPS of $2.62, compared with $2.59 a year ago and a FactSet forecast of $2.53.

Among other highlights, it reported provision for credit losses (PCL) of $1,054 million, compared with $705 million; a Common Equity Tier 1 (CET1) Ratio of 13.5%, compared with 13.1%; and adjusted ROE of 9.8%, compared with 10.9%.

National Bank in a preview note published earlier in May forecast EPS from BMO of $2.60 versus a consensus then of $2.49, and said it didn't expect a dividend increase. It noted "credit guidance has been a moving target" for BMO. "Commercial loan growth outlook likely weakens," National Bank said, while also noting BMO's buyback activity was "tracking program capacity".

BMO's board declared a quarterly dividend of $1.63 per share on paid-up common shares for the third quarter of fiscal year 2025, a $0.04 cent, or 3%, increase from the prior quarter, up 5% from the prior year.

During the quarter, BMO purchased for cancellation 7 million common shares under the normal course issuer bid.

"This quarter, we delivered strong revenue and pre-provision, pre-tax earnings growth across each operating group and ongoing positive operating leverage. Impaired credit provisions moderated again this quarter as expected, while we bolstered performing allowances. We're executing against our plan to rebuild return on equity, including actions to optimize our balance sheet and invest for growth," said Darryl White, Chief Executive Officer, BMO Financial Group.

"We're supporting our clients through the current environment from a position of strength. Our robust capital position enables us to return capital to shareholders through buybacks and higher dividends, and provides resilience for a range of economic outcomes as we help our clients and the communities we serve make real financial progress," White added.

BMO closed Tuesday up 0.7% at $144.86.