According to FreightWaves, BMO — the former Bank of Montreal and one of the largest lenders to the trucking industry — reported third-quarter earnings Tuesday that showed the stronger freight market impacting its numbers. Provisions for credit losses fell to $15 million from $41 million in the second quarter, and gross impaired loans dropped to $440 million from $576 million, signaling improved credit quality across its transportation book. The report is likely the last detailed look at BMO's trucking credit, as the bank has agreed to sell its transportation unit to private equity firm Stonepeak, a deal expected to close before the end of the year.
Quarterly credit metrics
The third quarter ended July 31 showed net writeoffs were barely changed from the prior quarter, declining to Ca $24 million (US $17.32 million) from $25 million, according to FreightWaves. That figure is backward-looking, the report noted. The forward-looking indicators — provisions, allowances and gross impaired loans — all improved significantly.
| Metric (CAD millions) | Q3 2026 | Q2 2026 | Q4 2025 | Year ago |
|---|---|---|---|---|
| Net writeoffs | $24 | $25 | — | — |
| Provisions for credit losses | $15 | $41 | — | $50 |
| Allowances for credit losses | $73 | $86 | $71 | — |
| Gross impaired loans | $440 | $576 | $585 | — |
FreightWaves reported that the $15 million provision figure is the lowest since the first quarter of 2023. Allowances for credit losses slid to $73 million from $86 million in the second quarter, and were lower than the $71 million recorded in the fourth quarter of 2025. Allowances are a hit on a company's balance sheet, while a provision impacts its income reporting; both are reflections of distressed loans, according to the report.
Balance sheet and sale preparation
Gross impaired loans fell hard, to $440 million from $576 million one quarter earlier and $585 million in the fourth quarter of last year, FreightWaves reported. That is another sign of a strengthening freight market boosting BMO's transportation business, which is believed to be about 90% lending to trucking.
While the size of BMO's transportation book has been pared back in recent quarters, possibly in anticipation of a sale, the latest report shows relative stability. Gross loans and acceptances for the transportation sector were $12.78 billion, up from $12.65 billion in the second quarter. That figure peaked at $15.6 billion in the third quarter of 2023.
One clear indication of the pending sale is in transportation group loan originations, which totaled $114 million in the second quarter but only $11 million in the just-concluded third quarter, according to FreightWaves.
Implications for trucking finance
For CFOs and treasury professionals, the data show that a major trucking lender's credit quality is improving as the freight market strengthens, according to FreightWaves. Provisions and impaired loans have fallen to multi-quarter lows, while the transportation book remains stable at $12.78 billion in gross loans.
The steep drop in loan originations — to $11 million from $114 million — is tied to the planned sale to Stonepeak rather than to credit conditions, the report indicated. BMO's next earnings release is scheduled for December 2, potentially after the deal closes, which would make this quarter's figures the final standalone view of its trucking portfolio.
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