BMO Closes Sale of Transportation and Vendor Finance Businesses

The transaction is expected to improve BMO's CET1 capital ratio by approximately 23 basis points in fiscal 2026's fourth quarter.

Rhea-AI Summary

BMO Financial Group (BMO) has closed the previously announced sale of its Transportation Finance and Vendor Finance businesses to Stonepeak. At closing, BMO transferred approximately 75% (C$11 billion) of the estimated C$14.5 billion combined loan and lease portfolio. The remaining balances are expected to transfer in the first quarter of fiscal 2027, subject to customary conditions.

BMO retains a 19.9% interest in the Stonepeak-managed acquiring entity and will provide transition services. The businesses will operate as Longview Capital Solutions. BMO expects the transaction to improve its common equity Tier 1 (CET1) ratio, a measure of bank capital strength, by approximately 23 basis points in the fourth quarter of fiscal 2026.

3 points · 0 major

PositiveiHow this balance works

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0 major · 2 points

Hollow bars mark forward-looking points. How the balance works

Positive

• Moderate pointSale to Stonepeak closed, with approximately 75% (C$11 billion) of the portfolio transferred.
• Moderate point. Forward-looking: it has not happened yet and may not happen.BMO expects a approximately 23-basis-point CET1 ratio improvement in the fourth quarter of fiscal 2026.
• Minor point19.9% retained interest preserves BMO's participation in the acquired businesses.

Negative

• Minor point. Forward-looking: it has not happened yet and may not happen.Remaining portfolio balances await transfer, expected in the first quarter of fiscal 2027, subject to customary conditions.
• Minor point. Forward-looking: it has not happened yet and may not happen.Transitional services agreement commits BMO to providing certain services during the client transition.

Key Figures

Portfolio transferred: C$11 billion Retained interest: 19.9% CET1 ratio improvement: 23 bps

Portfolio transferred

C$11 billion

Transferred to Stonepeak at closing

Retained interest

19.9%

BMO’s interest in the Stonepeak-managed entity

CET1 ratio improvement

23 bps

Expected in the fourth quarter of fiscal 2026

Key Terms

cet1, transitional services agreement

2 terms

cet1 financial

"improve the bank's common equity Tier 1 (CET1) ratio"

CET1, or Common Equity Tier 1, is a measure of a bank's core financial strength, representing its most reliable and high-quality capital, primarily made up of shareholders' equity like common stock. It acts like a financial safety buffer, helping the bank absorb losses and stay stable during economic downturns. For investors, a strong CET1 ratio indicates a bank's resilience and overall health.

transitional services agreement financial

"entered into a transitional services agreement"

A transitional services agreement (TSA) is a time‑limited contract used in mergers, acquisitions, and divestitures where the seller agrees to keep providing specific operational services to the buyer after the transaction closes so the buyer can run the acquired business until it can take over those functions. Typical services include IT, payroll, finance, HR, facilities, and customer support; the TSA specifies scope, service levels, fees or cost‑recovery, duration, and termination conditions so each party’s responsibilities and the handover timetable are clear.

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TORONTO and CHICAGO, Oct. 29, 2026 /PRNewswire/ -- BMO Financial Group (TSX: BMO) (NYSE: BMO) today announced it has closed the previously announced sale of its Transportation Finance and Vendor Finance businesses to Stonepeak.

At closing, BMO transferred approximately 75% (C$11 billion) of the estimated C$14.5 billion total combined loan and lease portfolio to Stonepeak, with the remaining balances expected to transfer in the first quarter of fiscal 2027, subject to customary conditions. In addition, BMO and Stonepeak have entered into a transitional services agreement under which BMO will provide certain services to support an orderly transition for clients.

As previously announced, BMO now holds a 19.9% interest in the Stonepeak-managed entity that acquired the businesses, enabling BMO to continue participating in their long-term value creation. The businesses will now operate under the name Longview Capital Solutions.

The transaction is expected to improve the bank's common equity Tier 1 (CET1) ratio by approximately 23 bps in the fourth quarter of fiscal 2026.

About BMO Financial Group

BMO Financial Group is the eighth largest bank in North America by assets, with total assets of $1.5 trillion as of July 31, 2026. Serving clients for more than 200 years, BMO provides a broad range of personal and commercial banking, wealth management, global markets and investment banking products and services across Canada, the United States, and select markets globally. BMO is innovating for business value, by deploying and integrating human, digital and artificial intelligence to personalize client experiences, augment teams, and automate its business responsibly. Driven by its purpose, to Boldly Grow the Good in business and life, BMO is committed to driving positive change in the world, and making progress for a thriving economy, sustainable future, and stronger communities.

About Stonepeak

Stonepeak is a leading alternative investment firm specializing in infrastructure and real assets with approximately $88 billion of assets under management. Through its investment in defensive, hard-asset businesses globally, Stonepeak aims to create value for its investors and portfolio companies, with a focus on downside protection and strong risk-adjusted returns. Stonepeak, as sponsor of private equity and credit investment vehicles, provides capital, operational support, and committed partnership to grow investments in its target sectors, which include digital infrastructure, energy and energy transition, transport and logistics, and real estate. Stonepeak is headquartered in New York with offices in Houston, Washington, D.C., London, Hong Kong, Seoul, Singapore, Sydney, Tokyo, Abu Dhabi, and Riyadh. For more information, please visit www.stonepeak.com.

Caution Regarding Forward Looking Statements

Certain statements in this press release are forward-looking statements.  All such statements are made pursuant to the "safe harbor" provisions of, and are intended to be forward-looking statements under, the United States Private Securities Litigation Reform Act of 1995 and any applicable Canadian securities legislation. These forward-looking statements include, but are not limited to, statements with respect to the expected closing of the remaining portion of the transaction and capital impact of the proposed transaction, and include statements made by our management. Forward-looking statements are typically identified by words such as "expect", "will" or negative or grammatical variations thereof.

By their nature, forward-looking statements are based on various assumptions and are subject to inherent risks and uncertainties. We caution readers of this press release not to place undue reliance on our forward-looking statements as the assumptions underlying such statements may not turn out to be correct and a number of factors could cause actual future results, conditions, actions or events to differ materially from the targets, expectations, estimates or intentions expressed in the forward-looking statements. Such factors include, but are not limited to: the possibility that the remaining portion of the transaction does not close when expected or at all because conditions to closing are not satisfied on a timely basis or at all; the anticipated benefits from the transaction, such as it improving BMO's common equity Tier 1 capital ratio (CET 1 ratio), are not realized in the time frame anticipated or at all. We caution that the foregoing list is not exhaustive of all possible factors. These factors should be considered in addition to other uncertainties and potential events, and the inherent uncertainty of forward-looking statements.

Assumptions about BMO expected financial performance (including balance sheet, income statement and regulatory capital figures), expected closing date of the remaining portion of the transaction, restructuring costs, and assumed accounting treatment  were considered in estimating the impact of the transaction on BMO's CET1 ratio.

BMO does not undertake to update any forward-looking statement, whether written or oral, that may be made, from time to time, by the organization or on its behalf, except as required by law.

View original content:https://www.prnewswire.com/news-releases/bmo-closes-sale-of-transportation-and-vendor-finance-businesses-302924335.html

SOURCE BMO Financial Group

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

How much of BMO's Transportation and Vendor Finance portfolio transferred to Stonepeak at closing?

BMO transferred approximately 75% (C$11 billion) of the estimated C$14.5 billion combined loan and lease portfolio at closing. The remaining balances are expected to transfer in the first quarter of fiscal 2027, subject to customary conditions.

How is the Stonepeak transaction expected to affect BMO's capital ratio?

BMO expects the transaction to improve its common equity Tier 1 (CET1) ratio, a measure of bank capital strength, by approximately 23 basis points in the fourth quarter of fiscal 2026.