In what may be the final published snapshot of credit conditions in the trucking industry from BMO, the bank’s quarterly earnings released Tuesday showed the stronger freight market affecting results.

BMO, formerly Bank of Montreal and one of the largest lenders to the trucking industry, announced in May that it plans to sell its transportation unit to private equity firm Stonepeak. The transaction is expected to close before the end of the year. BMO’s next earnings release is scheduled for December 2.

Net writeoffs in the third quarter ended July 31 changed only slightly from the previous quarter, easing to CA$24 million (US$17.32 million) from CA$25 million. However, that figure is backward-looking and does not reflect the stronger forward-looking indicators in the report.

Provisions and allowances, along with the size of the company’s gross loans considered impaired, all declined materially in the quarter. Those measures reflect expectations for future troubled loans and the amount of credit under pressure.

Provision for credit losses fell to $15 million from $41 million in the second quarter. A year earlier, the figure was $50 million. The latest result was the lowest since the first quarter of 2023.

Allowances for credit losses dropped to $73 million from $86 million. That was lower than the $71 million reported in the fourth quarter of 2025.

Definite signs of improvement in #trucking credit in this quarter's $BMO data, which might be the last given transportation group's pending sale to PE. Writeoffs barely changed. But allowances and (especially) provisions, which are more forward-looking, declined. pic.twitter.com/nDTXL8102R — John Kingston (@JohnHKingston) August 25, 2026

Allowances reduce a company’s balance sheet, while provisions affect income reporting. Both are indicators of distressed loans. For lenders, those measures are closely watched because they can show whether stress is easing before it appears in actual writeoffs.

Gross impaired loans fell sharply to $440 million from $576 million in the previous quarter and $585 million in the fourth quarter of last year. The decline is another sign of a strengthening freight market supporting BMO’s transportation business, which is believed to be about 90% focused on trucking.

Although BMO has reduced the size of its transportation book in recent quarters, possibly in preparation for a sale, the latest report points to relative stability. Gross loans and acceptances in the transportation sector totaled $12.78 billion, up from $12.65 billion in the second quarter. That amount peaked at $15.6 billion in the third quarter of 2023.

One area that appears to reflect the pending sale is transportation group loan originations. Originations were $114 million in the second quarter, but fell to $11 million in the third quarter, a level that suggests the unit is operating in a transition period ahead of the expected handoff.

You can almost imagine the conversation at the transportation group at $BMO : "Hey, we're selling the joint. Don't lend too much money and screw things up! Let the next guys take care of it." Sale to Stonepeak expected to close in the 4Q. pic.twitter.com/LDoJaffxFH — John Kingston (@JohnHKingston) August 25, 2026

Sale to Stonepeak is expected to close in the fourth quarter.