The Bank of Montreal reported higher fourth-quarter profits on Thursday, driven by improving global market conditions, stronger investment-banking activity, and a rebound in equities that supported trading income. The result outlines what led to the earnings jump, who benefited inside the organisation, where the improvement came from, why capital-market divisions outperformed, when the upswing began, and how the bank expects conditions to evolve.

BMO said that advisory fees, trading revenue and underwriting activity all improved as global financial markets recovered from volatility earlier in the year. Executives noted that higher investor confidence—particularly in technology, energy and financial stocks—boosted dealmaking appetite and drove stronger performance in the bank’s capital-markets unit.

The improved results helped offset slower activity in retail banking, where higher interest rates and tighter lending standards continue to weigh on mortgage and loan demand. Still, the bank emphasised that its diversified business model, which spans Canada and the United States, continues to provide stability despite uneven consumer activity.

Analysts say the earnings report highlights a broader recovery in global financial markets as investors anticipate potential interest-rate adjustments in major economies. They add that renewed momentum in trading and advisory services is likely to benefit banks with strong North American exposure throughout early 2026.

BMO executives warned, however, that geopolitical tensions, inflation risks and sudden shifts in monetary policy could still introduce volatility. Despite those uncertainties, the bank says it is positioned for steady performance if capital-market activity remains firm and investor confidence continues its upward trend.

Source: Reuters.