Toronto Dominion (TD) Q2 2023 reports net income of C$3.35bn, down 12% y-o-y. For the year to date, net income of C$4.93bn is down by 34.6%.

The bank’s cost-income ratio rises from 53.6% to 56.5% at the end of the current quarter. Provisions for credit losses for the quarter of C$599m million represents an increase of C$572m compared with the second quarter last year. PCL impaired was C$551m, an increase of 75%, reflecting some normalisation of credit performance. Total PCL for the quarter as an annualised percentage of credit volume is 0.28%. By segment, PCL is higher by C$208m US Retail. It rises by C$187m in Canadian Personal and Commercial Banking and by C$155m in the corporate segment.

TD Q2 2023: Canadian Personal and Commercial Banking highlights

The bank’s Canadian personal and commercial unit posts net income of C$1.62bn, up 4% y-o-y. Revenue of C4.04bn rises by 11% reflecting higher margins and volume growth. The segment delivered a seventh consecutive quarter of positive operating leverage. Highlights include record second quarter New to Canada account openings, momentum in mortgage originations, and strong credit card loan growth.

TD recently launched an exclusive Canadian bank offer with Uber. This adds to TD’s list of partnerships, including Air Canada, Amazon, Expedia, and Starbucks.

Net interest income for the quarter group wide rises by 16% to C$7.43bn. This reflects margin growth in personal and commercial banking, and the impact of foreign exchange translation. This is partially offset by lower net interest income in Wholesale Banking.

TD Q2 2023 US Retail Bank

The unit reports net income of C$1.41bn, ahead by 3% y-o-y. On an adjusted basis, net income of C%1.53bn rises by 28%.

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Reported net income includes acquisition and integration-related charges for the abortive First Horizon deal of C$154m million. TD’s investment in Charles Schwab contributes C$250m in earnings, up 12%.

TD launched two new proprietary credit cards, TD Flex Pay and TD Clear. It continues to execute on its retail network expansion and wealth strategy. For example, it has opened five stores. This is part of a broader plan to accelerate its organic growth strategies in South Florida, Atlanta and the Carolinas.

“TD’s retail businesses in both Canada and the United States continued to show strong revenue and earnings growth this quarter, with robust customer originations and loan volumes,” said Bharat Masrani, Group President and CEO, TD Bank Group. “Investments in differentiated wealth and insurance products and the close of the Cowen acquisition expanded our offerings and strengthened the competitive advantages of these businesses.”

TD Q2 2023 Wealth Management and Insurance

Wealth Management and Insurance net income of C$563m falls by 16% y-o-y. This reflects lower earnings in the wealth management business. TD says that this quarter’s revenue growth of 2% underscores the strength of the segment’s diversified business model. Higher insurance revenue and net interest income largely offsets the impact of trading normalisation and market volatility.