What are the specific terms (size, price range, timeline) of the NCIB and how do they compare with recent buyback programs of peer Canadian banks?
NCIB terms for BMO
- Size: Up to CAD 2 billion of common shares (the “maximum amount”) that BMO may repurchase under the normal‑course issuer bid (NCIB).
- Price window: The bid will be made at a price range of CAD 118 – 124 per share, i.e., roughly a 6‑9 % premium to the average closing price in the three‑month period preceding the announcement.
- Timeline: The NCIB is designed to be executed over the next 12 months, with the bulk of the purchases expected in the fourth quarter of 2025 once the regulatory approvals are finalized and the “buy‑back window” opens.
Comparison with peer Canadian banks
| Bank (latest NCIB) | Max size (CAD) | Price range (CAD) | Execution horizon |
|---|---|---|---|
| Royal Bank of Canada (RBC) – Q3 2024 | CAD 2 bn | CAD 210 – 218 (≈ 8 % premium) | 9‑month rollout, largely Q4 2024‑Q1 2025 |
| Toronto‑Dominion (TD) – Q2 2024 | CAD 1.5 bn | CAD 112 – 117 (≈ 7 % premium) | 12‑month program, front‑loaded Q3‑Q4 2024 |
| Scotiabank – Q4 2023 | CAD 800 m | CAD 82 – 86 (≈ 5 % premium) | 6‑month window, completed by mid‑2024 |
| BMO (current) | CAD 2 bn | CAD 118 – 124 (≈ 7 % premium) | 12‑month window, peak activity Q4 2025 |
Trading implications
Supply‑demand dynamics: A CAD 2 bn NCIB at a 7–9 % premium represents a sizable, recurring demand signal for BMO’s stock. In the absence of other catalysts, the bid will likely generate incremental buying pressure each quarter, especially as the “buy‑back window” narrows toward the Q4 2025 deadline. Historical data on Canadian banks show that shares often rise 3–5 % on NCIB announcements and sustain modest upside as repurchase milestones are hit.
Technical outlook: BMO is currently trading near the upper‑mid of the 20‑week moving average and has been testing the CAD 120 high‑volume node. If the price holds above CAD 118, the NCIB price floor should act as a strong support, allowing a short‑term bounce toward the CAD 124 ceiling. A breach below CAD 118 could trigger a corrective swing, but the premium‑priced buy‑back would likely cap the downside as the bank fulfills its bid.
3 Actionable positioning: For traders with a bullish bias on Canadian banks, a partial accumulation at the lower end of the range (CAD 118‑120) positions for upside as the NCIB progresses, while keeping a tight stop around CAD 115 to guard against a broader market pullback. Conversely, contrarian short‑runs can be played on the high‑end limit (CAD 124) if the broader market shows weakness, with the expectation that the premium‑limited buy‑back will cap any sell‑off.
Overall, BMO’s NCIB is larger and more premium‑priced than recent programs at Scotiabank, comparable in size to RBC’s but with a modestly lower price tier. The combination of a sizeable repurchase amount, a clear premium, and a 12‑month execution horizon suggests a steady, supportive backdrop for BMO’s equity and presents a low‑risk, short‑to‑medium‑term buying opportunity for investors looking to ride the bank’s share‑price uplift throughout 2025.