TD Bank’s Q3 profit rises 17% to $2.77B, anchored by retail units
Toronto-Dominion Bank reported Thursday a $2.77-billion profit for its third-quarter, up 17 per cent from the same time last year, anchored by strong performance at its retail operations in both Canada and the United States.
The profit amounted to $1.46 per share in net income and $1.51 per share of adjusted earnings, which was above analyst estimates of $1.36 per share.
“Much of the beat was predicated on better margins on both sides of the border and better than forecast provisions,” observed analyst John Aiken of Barclays Capital in a note to clients.
TD reported $505 million of provisions for credit losses, below the consensus estimate of $569 million, Aiken wrote.
“The outperformance is partly attributable to a more favourable operating environment in the U.S. and more recently in Canada where stronger-than-expected economic growth has boosted activity in our businesses,” TD Bank chief executive Bharat Masrani said in a conference call with analysts.
The Toronto-based bank also announced plans to increase the size of its share buyback program by up to 20 million shares.
TD says it had already repurchased 15 million common shares under the program and is seeking regulatory approval to increase the ceiling on the discretionary buyback plan to 35 million shares — about two per cent of the issued stock.
Toronto-Dominion is the last of Canada’s big banks to report its third-quarter earnings for 2017. All of the Big Six banks outperformed analyst expectations and reported strong performance in their Canadian operations.
TD’s Canadian retail banking accounted for $1.73 billion of net income for the three months ended July 31, up 14 per cent from last year.
The Canadian retail banking arm benefited from lower insurance claims, growth in wealth assets and a record level of real estate lending originations — which include new mortgages and renewals.
The U.S. retail banking arm also saw a 14-per-cent increase, to $901 million, while TD’s wholesale banking operation saw its net income fall by three per cent to $293 million.
“Its U.S. platform continued its upward earnings trajectory and its domestic retail operations saw a step up in its profitability after being mired in lower growth over the past few quarters,” Aiken wrote in the Barclays report.
Bank of Nova Scotia and Bank of Montreal reported net profits also got a boost from the same quarter a year ago, while Royal Bank of Canad and CIBC reported declines. But overall, analysts said the results were better than they had expected.