A 42% rise in fourth quarter provisions at TD to C$617m contributes to an earnings miss.

TD reports net income in the quarter to end October is down by 57% to C$2.89bn. The fourth quarter does however contain a number of exceptional items. For example, restructuring charges of C$363m. Acquisition and integration charges primarily related to the Cowen acquisition come in at C$197m. And residual impact from the terminated First Horizon acquisition-related capital hedging strategy results in a net loss of C$64m.

“TD delivered strong revenue growth this quarter. This reflects positive underlying business momentum and the benefits of our diversified business model,” said Bharat Masrani, Group President and CEO, TD Bank Group. “In a complex operating environment, we continued to adapt, invest in new capabilities and take important steps to deliver efficiencies and drive growth across the bank.”

TD Q4 highlights

Canadian Personal and Commercial Banking earnings benefit from net interest margin expansion and volume growth. The unit’s net income of C$1.68bn is down 1% y-o-y. The decrease primarily reflects higher provisions for credit losses (PCL) and expenses. This is partially offset by revenue growth. Revenue of C$4.76bn is up by 7%. This reflects volume growth and higher margins. The segment delivered its tenth quarter of positive operating leverage in a row. Canadian Personal and Commercial Banking continued to deliver growth, driven by a record quarter for New to Canada account openings. This quarter, TD launched a First Home Savings Account to enable customers to invest tax-free for a down payment on their first home.

TD US retail banking net income -17%

TD’s US retail banking unit reports net income of C$1.28bn, down 17% y-o-y. On an adjusted basis, net income is down by 19%.

The US retail banking unit posts total average loan balances up 10% compared with the fourth quarter last year.

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By GlobalData

Wealth Management and Insurance net income of C$501m is down by 3% y-o-y. This primarily reflects higher insurance claims and related expenses, partially offset by higher revenues.

TD’s quarterly dividend rises by 6.25% to C$1.02.