10:55 AM EDT, 10/17/2025 (MT Newswires) -- RBC has a neutral view on the Bank of Montreal's ( BNKD ) announcement that it will sell 138 branches throughout the U.S. to First Citizens Bank, along with plans to open 150 new branches over the next five years.

"We believe the branches announced for sale were profitable but not high return and probably proved difficult to scale up to improve profitability/ROE in the U.S.," analyst Darko Mihelic wrote. While the initiative may reduce earnings/profitability due to earnings drag from branch closures and higher expenses from branch openings in the shorter-term, in longer term, he expected, improved U.S. profitability as BMO focuses on core markets with the greatest growth potential and builds on established strengths.

It may take anywhere between three and five years for new branches to become profitable, Mihelic noted.

BMO is rated Sector Perform, with a $163 price target.

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