Mortgages remain ‘growth story’: TD CEO

Toronto- Dominion Bank is not pulling back on the domestic mortgage market, despite slowing growth relative to peers and concern some pockets of the market may be overheated, the bank’s chief executive said Wednesday.

“We haven’t stepped back,” Bharat Masrani said during an investor conference in Toronto. “It continues to be a growth story."

Canada’s second- largest bank has become more diligent when it comes to underwriting standards including income verification, and that might have some impact in the mortgage business, Masrani said. But there has not been a deliberate decision to pull back on real estate in markets where home prices have been soaring.

“I wouldn’t want that to come across … as pulling back,” Masrani said. “I feel comfortable how we are growing.”

Earnings in TD’s domestic personal and commercial banking unit grew by just one per cent in the most recent fiscal quarter from a year earlier, lagging both peers and the bank’s U. S. retail banking segment.

Scotiabank analyst Sumit Malhotra said the thirdquarter results caused him to question whether TD had made a decision to ease up on some real estate markets such as Vancouver and Toronto. Masrani said this was not the case. He suggested that the focus should be on TD’s large lending base, and noted that external factors can lead to lumpy results from quarter to quarter.

“These growth numbers can sometimes not tell the whole story,” Masrani said.

Some of TD’s competitors have acknowledged a more tepid stance toward pockets of Canada’s real estate market. Last month, Royal Bank of Canada chief executive Dave McKay said Canada’s largest bank is under- represented in the red- hot Vancouver housing market.