Profit drops sharply at TD, CIBC

TD Bank Group and the Canadian Imperial Bank of Commerce have fallen in line with the rest of Canada’s Big Six financial institutions in reporting significant drops in profit and increases in their provisions for credit losses.

TD revealed Thursday that its second-quarter profit slipped to nearly $1.52 billion or 80 cents per diluted share, down from $3.17 billion or $1.70 per diluted share a year ago.

Analysts on average had expected an adjusted profit of 89 cents per share for the period ended April 30, according to financial markets data firm Refinitiv.

On an adjusted basis, the bank earned 85 cents per share in its most recent quarter, down from $1.75 in the same quarter last year.

“This quarter we went through tremendous headwinds...as we absorbed a substantial increase in provisions for performing loans as well

as market pressure from the steep drop in interest rates,” said chief executive Bharat Masrani on a call with analysts.

“A tough quarter, no question, but one that demonstrates the resilience of our model and our strategy.”

The fluctuations matched the patterns of many other banks that reported earnings earlier in the week and Canadian Imperial Bank of Commerce who hosted its quarterly call hours before TD.

CIBC shared that it earned $392 million or 83 cents per share for in its second quarter, down from a profit of $1.35 billion or $2.95 per share in the same quarter last year.

On an adjusted basis, it reported a profit of 94 cents per share, a drop from $2.97 per share during the same period last year.

Analysts on average had expected an adjusted profit of $1.58 per share for the quarter, according to financial markets data firm Refinitiv.

“This is our moment of truth,” said chief executive Victor Dodig on a call with analysts.