Toronto-Dominion Bank beat estimates on better-than-expected wealth-management and capital-markets results, capping off an earnings season that saw all of Canada’s big banks benefit from higher trading activity.
The country’s second-largest lender earned $2.02 per share on an adjusted basis in its fiscal first quarter, according to a statement Thursday, topping the $1.95 average analyst estimate. Earnings in its wealth-management unit totaled $680 million (US$474 million), beating the $578 million average estimate of three analysts in a Bloomberg survey. Capital-markets earnings also topped estimates.
That followed strong capital-markets figures reported by Canada’s other five big banks. Dealmaking and trading activity has also been strong in the US, where large banks posted similar results in their fourth-quarter reports last month.
At Toronto-Dominion, provisions for credit losses last quarter totaled $1.21 billion, slightly more than the $1.19 billion analysts had forecast.
The prospect of US tariffs has created massive uncertainty for Canada’s economy, and the country’s lenders have started to reflect that in their provisions for potentially sour loans this quarter.
Bank of Nova Scotia, Bank of Montreal and Royal Bank of Canada all recorded more than $1 billion in provisions for the period. National Bank of Canada set aside $254 million for possibly bad loans and Canadian Imperial Bank of Commerce reserved $573 million.
Toronto-Dominion is in the midst of a transition period after agreeing to pay almost US$3.1 billion to settle with US authorities over its failure to catch money laundering by drug cartels and other criminals at several of its American branches.
The bank is shrinking its US balance sheet to comply with a regulatory cap on its American retail assets and is also spending heavily on better compliance measures. Toronto-Dominion reported costs of $927 million, or $696 million after taxes, for a US balance-sheet restructuring in the fiscal first quarter.
Earlier this month Toronto-Dominion sold its 10.1% interest in Charles Schwab Corp., raising US$13.9 billion after taxes and fees, and new Chief Executive Officer Raymond Chun said the bank will invest in its Canadian operations and capital-markets franchise. The firm also said it will buy back $8 billion worth of shares and received regulatory approval for that plan Monday.
Christine Dobby, Bloomberg News
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