Data from Canada’s BMO on trucking sector credit conditions for the bank’s second quarter suggests that the rebound in trucking rates has yet to significantly strengthen the finances of many of its customers.
BMO, the former Bank of Montreal, is one of the largest lenders to the trucking sector. As a publicly traded company, its quarterly data on various metrics in its transportation group (of which around 90% consists of trucker financing) is considered a strong indicator of the industry’s credit health.
However, the group will be sold to Stonepeak, a private equity company. That deal is expected to close in the fourth quarter, so BMO’s (NYSE: BMO) latest earnings report released Wednesday will likely be the penultimate of its kind that provides a transparent picture of credit conditions in the trucking sector.
Four key BMO Transportation sector indicators of the credit health of trucking were little changed in the second quarter of 2026. BMO’s fiscal year calendar begins in November.
Gross impaired loans increased to Ca$576 million (US$417.2 million) from $563 million in the first quarter. While that figure is down from the recent high of $585 million in the fourth quarter, it is still well above the $503 million in the corresponding quarter of fiscal 2025.
Reserves for credit losses on impaired loans increased to $86 million from $77 million. A year earlier, that figure was $57 million.
Provisions for credit losses amounted to $41 million. That’s up from $39 million in the previous quarter. They peaked at $85 million in the last three months of 2024.
A provision is considered a “counteractive” and its impact is on a company’s balance sheet. A provision is a liability, so it affects income. But both are acknowledgments of a company that believes it will be difficult for a debtor to pay it.
Net write-downs rose slightly to $25 million, up from $24 million. The recent peak was $63 million in Q4 2024.