BMO Starts Buying Back 3.6% of Its Shares Today
Bank of Montreal begins a new share buyback today, September 8, 2026, having received approval from the Toronto Stock Exchange and OSFI to purchase up to 25 million common shares for cancellation. The bid runs to no later than September 7, 2027. That is approximately 3.6% of BMO’s public float and 3.6% of its issued and outstanding shares, each measured as at August 31, 2026, when the bank had 695,092,237 common shares outstanding against a float of 694,808,416.
BMO first signalled its intention on August 25, 2026, alongside third-quarter results, and confirmed the approvals in BMO’s September 2 announcement. It also establishes an automatic securities purchase plan today, under which its broker, BMO Nesbitt Burns Inc., may buy shares within a defined set of criteria. If you are weighing this against what the rest of the sector is doing with its capital, our roundup of Canadian bank stocks covers the Big Six side by side.
Fewer shares, more money
The most interesting thing about this program is not its size in shares. It is its size in dollars.
The outgoing bid, which commenced September 5, 2025 and runs to September 4, 2026, authorised 30 million shares. As at August 31, 2026, BMO had repurchased 23,667,500 of them at a volume weighted average price of approximately $197.76. That works out to roughly $4.68 billion spent, and about 79% of the shares it was allowed to buy.
The new authorisation is smaller in shares, 25 million against 30 million, and is roughly in line with what the bank actually executed rather than what it was permitted to execute. But at Friday’s close of $242.76, buying all 25 million would cost about $6.1 billion. Fewer shares, more money, because the stock now trades 22.8% above last year’s average purchase price.
The same arithmetic reads well for last year’s buying. Shares bought at an average of $197.76 sit against $242.76 today, so the previous program is comfortably in the money on paper.
A drip, not a single purchase
TSX rules cap what BMO can buy on any given day at 557,961 shares, subject to the block purchase exception, against six-month average daily volume of 2,231,845 shares. In plain terms, the bank cannot buy more than about a quarter of its own typical daily volume in a session, so this is a year-long drip rather than one large purchase.
The drip is already visible in the share count. BMO had 697,146,398 common shares outstanding at July 31 and 695,092,237 at August 31, a reduction of roughly 2.05 million shares in a month. The bank has been buying, not just announcing.
The capital backdrop
On June 19, 2026, OSFI lowered the Domestic Stability Buffer from 3.5% to 3.0% of total risk-weighted assets, a 50 basis point reduction, and narrowed the range to 0% to 3% from 0% to 4%. OSFI expects domestic systemically important banks to hold at least 11.0% CET1. The regulator’s own framing of the change was that it lets Canada’s largest banks deploy more capital, which you can read in full in OSFI’s June decision to lower the Domestic Stability Buffer.
Treat that as backdrop rather than cause. Royal Bank’s current bid for up to 45 million shares, about 3.24% of its shares outstanding, commenced June 12, 2026, a week before the OSFI change. What can be said without stretching is the temporal fact: BMO’s is the first Big Six buyback program to begin after the buffer came down.
BMO has room on the measure regardless. Its CET1 ratio was 13.0% at July 31, 2026, about 200 basis points above the 11.0% expectation. That figure was unchanged from the second quarter and down from 13.5% a year earlier, and the bank’s own explanation is worth reading closely: internal capital generation was offset by the purchase of common shares for cancellation and higher risk-weighted assets. The buyback is already consuming the capital the bank generates.
The rest of the capital stack sits alongside it. Tier 1 capital was 14.7% and total capital 16.6%, down from 16.9%, with the leverage ratio at 4.2% from 4.3%. On credit, the provision for credit losses ran at 41 basis points of average net loans, improved from 47 basis points a year earlier.
What it means for shareholders
A buyback only means something once you are clear on what a share actually represents, which is a claim on the business. Cancelling shares shrinks the number of claims. It does not make the bank bigger. Fewer shares outstanding means each remaining share is a claim on a larger slice of the same bank, which lifts per-share figures if earnings hold up.
Alongside that, BMO declared a fourth-quarter dividend of $1.71 per common share, unchanged from the prior quarter and up $0.08, or 5%, from a year earlier. On a trailing annual dividend of $6.68 the yield is about 2.8%. Add 3.6% of shares retired, if the bid is fully used, and total shareholder yield lands near 6.4%.
The “if fully used” is doing real work in that sentence. A normal course issuer bid is an authorisation, not a commitment, and BMO’s release is explicit that the actual number of shares, the timing and the price all rest on management discretion. Last year the bank used 79% of what it was allowed. Nothing obliges it to use more this time.
Market data as of the September 4, 2026 close, pulled September 8, 2026. BMO closed Friday at $242.76 within a 52-week range of $168.92 to $259.20, on a trailing P/E of about 19.8 and price to book of about 2.0. The mean analyst target across 14 analysts is $254.57, roughly 5% above that close.
Disclaimer: The content on bestcanadianstocks.ca is for informational and entertainment purposes only and does not constitute financial advice. Past performance is not indicative of future results. Always consult a qualified financial advisor before making investment decisions. Buyback terms, share counts, average daily trading volume, the TSX daily cap and the prior program’s execution from Bank of Montreal’s press releases of August 25, 2026 and September 2, 2026, filed as 6-K exhibits 99.1 on SEC EDGAR. Capital, credit and dividend figures from BMO’s third quarter 2026 earnings release and Report to Shareholders. Domestic Stability Buffer and the CET1 expectation from OSFI’s June 19, 2026 announcement, verified September 8, 2026. Royal Bank’s comparative bid from its June 10, 2026 press release, 6-K exhibit 99.1. Prices, multiples and analyst targets from Yahoo Finance, pulled September 8, 2026, as of the September 4, 2026 close. Dollar comparisons between the two programs are our own arithmetic on the companies’ stated share counts and prices.
