TD posts strong 3rd quarter profits
Toronto-Dominion Bank is reporting 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 U.S.
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.
“This was a great quarter for TD reflecting impressive earnings and revenue growth, better credit performance across all our businesses, and lower insurance claims,” TD chief executive Bharat Masrani said in a statement.
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.
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.