CIBC and BMO Beat Q4 2025 Earnings Forecasts, Boost Dividends as Capital Markets Rebound

Canadian Imperial Bank of Commerce (CIBC) and Bank of Montreal (BMO) have capped off fiscal 2025 with stronger‑than‑expected fourth‑quarter earnings, powered by a rebound in capital markets and steadily growing U.S. franchises. Both lenders raised their common share dividends while maintaining robust capital ratios, reinforcing the narrative that Canada’s big banks are exiting 2025 from a position of strength despite a soft domestic economy and trade uncertainty. ^[1]

Analysts had already been primed for a strong quarter from Canada’s “Big Six” banks, with forecasts calling for solid profit growth and higher capital markets revenues. Those expectations have now largely been met or exceeded, though commentary from management and analysts suggests the key questions for 2026 will centre on credit quality, trade policy, and whether earnings can keep pace with elevated valuations. ^[2]

CIBC Q4 2025: Broad-Based Growth, Strong Beat and a Double-Digit Dividend Hike

Earnings comfortably ahead of forecasts

For the quarter ended October 31, 2025, CIBC reported net income of C$2.18 billion, up about 16% from C$1.88 billion a year earlier. Revenue climbed to C$7.58 billion from roughly C$6.62 billion, reflecting double‑digit growth across the franchise. ^[3]

Diluted earnings per share came in at C$2.20, with adjusted EPS of C$2.21, compared with C$1.90 and C$1.91 respectively in Q4 2024. That puts CIBC roughly 6–7% above consensus estimates, which were around C$2.07–2.08 per share according to LSEG and other analyst compilations. ^[4]

The bank’s own release highlights:

Revenue growth of 14% year over year in Q4
Adjusted net income up 16% versus Q4 2024
Adjusted pre‑provision, pre‑tax earnings up 20%, marking a ninth consecutive quarter of positive operating leverage ^[5]

For the full fiscal year 2025, CIBC generated net income of C$8.5 billion on record revenue of roughly C$29 billion, both up about 14–17% from 2024. Return on equity improved to about 14.4%, and management is now targeting ROE above 15% with EPS growth at the high end of its medium‑term 7–10% range. ^[6]

Capital markets and U.S. businesses step up

The story behind the beat is very much about fee‑based and capital‑light businesses:

Capital Markets: Full‑year net income in this segment rose about 40%, with pre‑provision, pre‑tax earnings up over 40% as well, driven by stronger trading and investment banking revenue. ^[7]
U.S. Commercial Banking and Wealth Management: Reported net income almost doubled year over year, reflecting loan and deposit growth, better margins and higher fee income. ^[8]
Canadian personal and commercial banking and Canadian commercial/wealth also delivered mid‑teens pre‑provision earnings growth, confirming that momentum is not confined to markets-sensitive units. ^[9]

On the earnings call, new CEO Harry Culham framed the quarter as the result of a “connected, client‑focused strategy” and emphasized three enablers for continued outperformance: tighter client focus, modernization and efficiency, and heavy investment in data and artificial intelligence. The bank has already delivered three straight years of positive operating leverage and aims to keep margins inching higher in both Canada and the U.S. ^[10]

More capital set aside for credit, but risk metrics remain solid

Credit costs did rise. CIBC’s provision for credit losses (PCL) in Q4 2025 was C$605 million, up from C$419 million a year earlier, as the bank built additional performing allowances against a cautious macro backdrop. ^[11]

Even so, management noted that:

The loan‑loss ratio sits at 33 basis points, only slightly above last year’s 32 bps, and at the favourable end of its guidance range.
Impaired provisions remain manageable, with strong secured positions in key portfolios.
The CET1 capital ratio stands at 13.3%, while the Liquidity Coverage Ratio is about 132%, underscoring balance‑sheet resilience. ^[12]

CRO commentary on the call suggested that provisions could remain elevated but contained, with impaired losses expected to stay within the low‑ to mid‑30‑basis‑point range if the consensus macro outlook holds. ^[13]

Dividend raised 10%, reinforcing income appeal

CIBC’s board declared a quarterly common dividend of C$1.07 per share, up from C$0.97. ^[14]

On an annualized basis (C$4.28 per share), and using recent price data around C$124, that implies a forward yield of roughly 3.5%, attractive for income‑oriented investors given the bank’s growth profile. ^[15]

Market reaction has been somewhat mixed intraday. Pre‑market quotes on Investing.com showed CIBC shares slipping about 0.5%, even as data later in the morning on Barchart indicated a gain of around 2% as investors digested the beat and dividend hike—illustrating the volatility around bank earnings days. ^[16]

BMO Q4 2025: Adjusted Earnings Surge, Dividend Increase and Capital Strength

Strong adjusted results and a clean beat

Bank of Montreal’s headline numbers were similarly robust. For Q4 2025, BMO reported: ^[17]

Reported net income:C$2.295 billion, essentially flat versus C$2.304 billion a year ago
Adjusted net income:C$2.514 billion, up about 63% from C$1.542 billion
Reported EPS:C$2.97, up slightly from C$2.94
Adjusted EPS:C$3.28, up 73% from C$1.90 in Q4 2024

Analyst expectations were materially lower: adjusted EPS forecasts clustered around the C$3.00 mark, meaning BMO delivered roughly a 10% upside surprise, while revenue of C$9.34 billion exceeded estimates of about C$9.02 billion. ^[18]

For fiscal 2025 as a whole, BMO generated C$8.73 billion in reported net income (up 19% year over year) and C$9.25 billion on an adjusted basis, with adjusted EPS rising to C$12.16 from C$9.68. Adjusted ROE improved to 11.3% from 9.8%. ^[19]

Segment performance: U.S. banking, wealth and markets all firing

BMO’s detailed earnings release points to a broad‑based upswing across its four operating segments: ^[20]

Canadian Personal & Commercial (P&C): Adjusted net income grew about 5%, supported by loan and deposit growth and better margins, offset by higher provisions and expenses.
U.S. Banking: Adjusted net income surged by more than C$500 million versus Q4 2024; on a U.S.‑dollar basis, earnings rose on higher non‑interest revenue, improved margins and notably lower credit losses.
Wealth Management: Net income climbed roughly 27–28%, helped by stronger markets, asset growth and higher brokerage activity.
Capital Markets: Adjusted net income nearly doubled (about +97%), as both Global Markets and Investment & Corporate Banking benefited from increased deal‑making, higher underwriting and advisory fees and improved trading‑related net interest income.

A key driver of the earnings rebound was credit:

PCL fell to C$755 million in Q4 from C$1.52 billion a year earlier, with both impaired and performing provisions moving lower as earlier builds were partly released. ^[21]
The bank’s CET1 ratio remains strong at 13.3%, giving ample room for continued capital deployment through dividends, organic growth and share buybacks. ^[22]

On the call, CEO Darryl White highlighted record revenue, pre‑provision, pre‑tax earnings and net income, emphasizing that BMO delivered on its commitments to rebuild ROE, maintain positive operating leverage and return capital to shareholders. ^[23]

Dividend growth and buybacks underline shareholder focus

BMO’s board declared a quarterly common dividend of C$1.67 per share, an increase of C$0.04 (2%) versus the prior quarter and C$0.08 (5%) year over year. That’s equivalent to C$6.68 annually. ^[24]

Using BMO’s recently disclosed closing share price of about C$174, the new payout translates into a forward yield near 3.8%, positioning the bank as a solid income name among North American financials. ^[25]

BMO also repurchased 8 million common shares during the quarter, returning over C$8 billion in capital to shareholders over the course of 2025 through buybacks and dividends. ^[26]

Market reaction and 2026 guidance

Despite the earnings beat, BMO’s stock traded slightly lower immediately after the release, with Investing.com data showing a pre‑market decline of about 1.6% as investors weighed the strong numbers against already‑rich valuations. ^[27]

Looking ahead, management laid out a relatively upbeat—but disciplined—outlook: ^[28]

Medium‑term ROE target: Around 15%
Loan growth: Low single‑digit in Canada; mid‑single‑digit in the U.S. by the end of 2026
Operating leverage: Intention to maintain positive leverage while investing in digital and AI initiatives
Tax rate: Expected in the 25–26% range
Credit outlook: Impaired provisions expected to stay around the mid‑40 basis points area, with a robust performing allowance covering roughly 70 bps of performing loans

Capital Markets Come Back: Sector-Wide Tailwinds for Canada’s Big Banks

The strong quarters from CIBC and BMO form part of a broader pattern. According to Reuters, all six major Canadian banks — RBC, TD, BMO, CIBC, Scotiabank and National — have now posted fourth‑quarter 2025 earnings ahead of expectations, powered by: ^[29]

A rebound in M&A and underwriting, lifting fee‑rich investment banking revenue
Stronger trading income after a quiet period
Solid contributions from wealth management, as investors rotate out of term deposits into higher‑fee solutions

In today’s post‑earnings wrap, Reuters flagged that: ^[30]

BMO’s capital markets profit jumped about 97%
CIBC’s equivalent unit saw income rise by roughly 58%
The banks’ U.S. operations — particularly at BMO and TD — delivered outsized earnings growth thanks to prior acquisitions and a firmer U.S. economic backdrop

However, the sector is not without its pressure points. Earlier in the week, analysts warned that: ^[31]

The Big Six are trading at roughly 12.9x forward earnings, about 23% above their 10‑year average multiple.
Share prices for the group are up around 30% year to date, outpacing the ~27% gain in the S&P/TSX Composite Index.
Any earnings disappointment could have an outsized impact on valuations, given how fully priced the banks already look.

Those warnings didn’t fully materialize this quarter — estimates were beaten — but they frame how investors are likely to judge 2026 guidance: these banks now need continued double‑digit EPS growth or meaningful ROE improvement to justify premium multiples in the face of macro uncertainty.

Risks on the Horizon: Credit, Trade and Macro Uncertainty

Even with strong capital markets and wealth results, both CIBC and BMO devoted significant airtime to risk management and the macro backdrop.

Credit quality

BMO expects Canada’s unemployment rate to remain above 7% through mid‑2026 and is modelling credit losses in the mid‑40 bps range, with variability quarter to quarter. Its performing allowance stands at about C$4.7 billion, covering around 70 bps of performing loans, and management highlighted strong collateral quality, particularly in mortgages. ^[32]
CIBC likewise sees provisions remaining elevated but manageable, with impaired PCL ratios at the low end of guidance and a focus on keeping loan growth and risk tightly aligned. ^[33]

Trade policy and the U.S. outlook

Both banks flagged ongoing trade tensions between Canada and the United States as a watchpoint, particularly for export‑exposed commercial clients and capital markets activity. Reuters reporting on the sector notes that lenders are taking a cautious stance on businesses likely to be affected by tariffs or changes in trade agreements. ^[34]

Valuation and investor expectations

Pre‑earnings previews from Nasdaq and Zacks suggested that both CIBC and BMO were already trading on mid‑teens forward P/E multiples, slightly above the broader banking industry. ^[35]

That leaves little room for missteps. As one portfolio manager quoted by Reuters put it, market‑sensitive businesses like capital markets may be “powering through,” but credit losses could remain higher for longer, a combination that is “not the best case” for the stocks in the near term. ^[36]

What Today’s Results Mean for Investors

For investors and market watchers, today’s Q4 2025 reports from CIBC and BMO suggest several takeaways:

Earnings power is improving. Both banks are growing EPS faster than the sector average, with CIBC posting a mid‑teens EPS gain and BMO delivering a 70%+ jump in adjusted EPS this quarter. ^[37]
Dividends are rising from a position of strength. CIBC’s 10% dividend hike and BMO’s 5% year‑over‑year increase signal confidence in the durability of earnings and capital buffers. ^[38]
Capital markets and U.S. operations are key growth engines. Both institutions are leaning into fee‑based, capital‑light businesses that can offset slower loan growth at home — but these units are also more sensitive to market cycles. ^[39]
Credit and macro risks haven’t gone away. Elevated provisions, caution around non‑bank financial exposures, and trade‑related uncertainty all argue for a measured outlook even in the face of strong Q4 numbers. ^[40]

For now, though, the message from Bay Street is clear: CIBC and BMO have successfully leveraged 2025’s capital‑markets rebound and disciplined risk management to beat expectations, raise dividends and enter 2026 with momentum. How long that momentum lasts will depend on whether credit conditions remain contained and whether management teams can deliver on ambitious ROE and growth targets in what still looks like a choppy macro environment.

This article is for informational and journalistic purposes only and does not constitute investment advice. Investors should conduct their own research or consult a licensed advisor before making investment decisions.