BMO Financial Group Announces Intention to Purchase for Cancellation Up to 30 Million of its Common Shares

Rhea-AI Summary

BMO Financial Group (NYSE: BMO) has announced plans to terminate its existing share buyback program and establish a new, larger normal course issuer bid to purchase and cancel up to 30 million common shares, subject to regulatory approvals. The bank has already purchased 15.7 million shares under the existing bid that was set to end January 21, 2026.

The new buyback program represents approximately 4.2% of BMO's public float as of July 31, 2025. The bank had 716,360,515 common shares outstanding, with a public float of 716,119,627 shares. Purchases will be made through the Toronto Stock Exchange and other designated exchanges, with pricing generally at market value except for exempt order purchases.

Positive

• Larger buyback program of 30 million shares compared to previous 20 million share program
• Represents significant 4.2% of public float, demonstrating strong commitment to shareholder returns
• Provides flexibility in capital management
• Already successfully executed 15.7 million shares under existing program

Negative

• Share purchases subject to regulatory approvals from OSFI and TSX
• Purchase timing and amounts dependent on market conditions and capital adequacy
• Potential impact on capital reserves during uncertain economic conditions

Insights

Financial Analyst

BMO's expanded share buyback program signals capital strength and shareholder value focus through 50% larger repurchase capacity.

BMO's announcement to replace its existing 20 million share repurchase program with a new 30 million share program represents a significant capital allocation decision that warrants investor attention. The bank has already repurchased 15.7 million shares under the current program and is now seeking regulatory approval to increase its buyback capacity by 50%.

The new program would target approximately 4.2% of BMO's public float of 716,119,627 shares, creating a meaningful impact on the bank's capital structure. Share repurchases at this scale typically achieve several objectives: they increase earnings per share by reducing the outstanding share count, can support share price by absorbing excess market supply, and signal management's confidence in the bank's financial position.

The timing of this announcement is particularly notable as it comes amid BMO's already strong execution on its current buyback program. Having already repurchased over 78% of the originally authorized amount, management clearly sees continued value in deploying capital toward share repurchases rather than alternative uses like aggressive lending growth or larger acquisitions.

This capital management approach aligns with BMO's stated intention to maintain flexibility in its capital position. For shareholders, buybacks typically represent a tax-efficient alternative to dividends, as they can enhance share value without creating immediate taxable events for continuing shareholders. The discretionary nature of the program also provides BMO with strategic optionality, as the announcement emphasizes that actual repurchases will depend on market conditions and capital adequacy considerations.

TORONTO, Aug. 26, 2025 /PRNewswire/ - Bank of Montreal (TSX: BMO) (NYSE: BMO) today announced its intention to terminate its existing normal course issuer bid to purchase for cancellation up to 20 million of its common shares (the "Existing Bid"), and establish a new normal course issuer bid to purchase for cancellation up to 30 million of its common shares (the "New Bid"), subject to the approval of the Office of the Superintendent of Financial Institutions Canada and the Toronto Stock Exchange ("TSX").

Bank of Montreal's (the Bank) Existing Bid commenced on January 22, 2025 and was scheduled to terminate on January 21, 2026, unless terminated earlier in accordance with its terms. As of August 22, 2025, the Bank had purchased 15.7 million common shares under the Existing Bid.  The Existing Bid will be terminated prior to commencing purchases under the New Bid. Purchases under the New Bid will be made through the facilities of the TSX and may also be made through other designated exchanges and alternative Canadian trading systems or by such other means as may be permitted by a securities regulatory authority, including under automatic purchase plans, block purchases, private agreements or share purchase programs under exemption orders issued by securities regulatory authorities (an "Exemption Order").

The Bank intends to file a notice of intention with the TSX in this regard and, subject to regulatory approvals, the New Bid would commence following TSX acceptance of the notice and continue for up to one year. The common shares that may be purchased under the New Bid represent approximately 4.2 per cent of the 'public float' (as such term is defined in the TSX Company Manual) of common shares as of July 31, 2025. The timing and amount of any purchases under the New Bid are subject to management discretion based on factors such as market conditions and capital adequacy. Except for any purchases made under an Exemption Order, which will generally be at a discount to the prevailing market price, the Bank will pay the market price for the common shares at the time of purchase. 

There were 716,360,515 Bank of Montreal common shares issued and outstanding as of July 31, 2025, and the public float was 716,119,627 common shares.

The proposed New Bid will continue to provide the Bank with flexibility to manage its capital position.

The Bank's common shares are listed on both the Toronto and New York stock exchanges. 

Caution Regarding Forward-Looking Statements

Bank of Montreal's public communications often include written or oral forward-looking statements. Statements of this type are included in this press release and may be included in other filings with Canadian securities regulators or the U.S. Securities and Exchange Commission, or in other communications. 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. Forward-looking statements in this press release may include, but are not limited to, statements with respect to BMO's intention to terminate its existing normal course issuer bid and establish a new normal course issuer bid. Forward-looking statements are typically identified by words such as "will", "would", "should", "believe", "expect", "anticipate", "project", "intend", "estimate", "plan", "commit", "target", "may", "schedule", "forecast", "outlook", "seek" and "could" or negative or grammatical variations thereof.

By their nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties, both general and specific in nature. There is significant risk that predictions, forecasts, conclusions or projections will not prove to be accurate, that our assumptions may not be correct, and that actual results may differ materially from such predictions, forecasts, conclusions or projections. We caution readers of this press release not to place undue reliance on our forward-looking statements, as a number of factors – many of which are beyond our control and the effects of which can be difficult to predict – 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.

The future outcomes that relate to forward-looking statements may be influenced by many factors, including, but not limited to: general economic and market conditions in the countries in which we operate, including labour challenges and changes in foreign exchange and interest rates; political conditions, including changes relating to, or affecting, economic or trade matters, including tariffs, countermeasures and tariff mitigation policies; changes to our credit ratings; cyber and information security, including the threat of data breaches, hacking, identity theft and corporate espionage, as well as the possibility of denial of service resulting from efforts targeted at causing system failure and service disruption; technology resilience, innovation and competition; failure of third parties to comply with their obligations to us; disruptions of global supply chains; environmental and social risk, including climate change; the Canadian housing market and consumer leverage; inflationary pressures; changes in laws, including tax legislation and interpretation, or in supervisory expectations or requirements, including capital, interest rate and liquidity requirements and guidance, including if the bank were designated a global systemically important bank, and the effect of such changes on funding costs and capital requirements; changes in monetary, fiscal or economic policy; weak, volatile or illiquid capital or credit markets; the level of competition in the geographic and business areas in which we operate; exposure to, and the resolution of, significant litigation or regulatory matters, our ability to successfully appeal adverse outcomes of such matters and the timing, determination and recovery of amounts related to such matters; the accuracy and completeness of the information we obtain with respect to our customers and counterparties; our ability to successfully execute our strategic plans, complete acquisitions or dispositions and integrate acquisitions, including obtaining regulatory approvals, and realize any anticipated benefits from such plans and transactions; critical accounting estimates and judgments, and the effects of changes in accounting standards, rules and interpretations on these estimates; operational and infrastructure risks, including with respect to reliance on third parties; global capital markets activities; the emergence or continuation of widespread health emergencies or pandemics, and their impact on local, national or international economies, as well as their heightening of certain risks that may affect our future results; the possible effects on our business of war or terrorist activities; natural disasters, such as earthquakes or flooding, and disruptions to public infrastructure, such as transportation, communications, power or water supply; and our ability to anticipate and effectively manage risks arising from all of the foregoing factors.

We caution that the foregoing list is not exhaustive of all possible factors. Other factors and risks could adversely affect our results. For more information, please refer to the discussion in the Risks That May Affect Future Results section, and the sections related to credit and counterparty, market, insurance, liquidity and funding, operational non-financial, legal and regulatory, strategic, environmental and social, and reputation risk in the Enterprise-Wide Risk Management section of BMO's 2024 Annual MD&A, as updated by quarterly reports, all of which outline certain key factors and risks that may affect our future results. Investors and others should carefully consider these factors and risks, as well as other uncertainties and potential events, and the inherent uncertainty of forward-looking statements. We do not undertake to update any forward-looking statements, whether written or oral, that may be made from time to time by the organization or on its behalf, except as required by law. The forward-looking information contained in this press release is presented for the purpose of assisting shareholders and analysts in understanding our financial position as at and for the periods ended on the dates presented, as well as our strategic priorities and objectives, and may not be appropriate for other purposes.

Material economic assumptions underlying the forward-looking statements contained in this press release include those set out in the Economic Developments and Outlook and Allowance for Credit Losses sections of BMO's 2024 Annual MD&A, as updated by quarterly reports. Assumptions about the performance of the Canadian and U.S. economies, as well as overall market conditions and their combined effect on our business, are material factors we consider when determining our strategic priorities, objectives and expectations for our business. In determining our expectations for economic growth, we primarily consider historical economic data, past relationships between economic and financial variables, changes in government policies, and the risks to the domestic and global economy.

Internet: www.bmo.com                                         X: @BMOmedia

About BMO Financial Group
BMO Financial Group is the seventh largest bank in North America by assets, with total assets of $1.4 trillion as of July 31, 2025. Serving customers for 200 years and counting, BMO is a diverse team of highly engaged employees providing a broad range of personal and commercial banking, wealth management, global markets and investment banking products and services to 13 million customers across Canada, the United States, and in select markets globally. Driven by a single 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 inclusive society.

View original content:https://www.prnewswire.com/news-releases/bmo-financial-group-announces-intention-to-purchase-for-cancellation-up-to-30-million-of-its-common-shares-302538744.html

SOURCE BMO Financial Group

FAQ

What is the size of BMO's new share buyback program announced in August 2025?

BMO announced plans to purchase and cancel up to 30 million common shares under the new program, representing approximately 4.2% of its public float.

How many shares did BMO purchase under its existing buyback program?

As of August 22, 2025, BMO had purchased 15.7 million common shares under the existing program that was scheduled to end January 21, 2026.

What is BMO's total number of outstanding shares as of July 2025?

BMO had 716,360,515 common shares issued and outstanding as of July 31, 2025, with a public float of 716,119,627 shares.

How will BMO purchase shares under the new buyback program?

BMO will purchase shares through the Toronto Stock Exchange and other designated exchanges, generally at market price except for exempt order purchases which may be at a discount.

What factors will determine BMO's share purchase timing and amounts?

The timing and amount of purchases will be based on management discretion, market conditions, and capital adequacy requirements.