Toronto-Dominion Bank (TSX:TD) has reported a decline in third-quarter earnings after it increased provisions for credit losses (PCL) following the sharp increase in interest rates over the past year.
The lender grew revenue at its Canadian Personal and Commercial Banking unit by 7% to $4.57 billion for the quarter ended July 31, 2023. However, the higher PCL resulted in a 1% year-over-year decline in net income from the unit to C$1.66 billion.
Its US retail bank reported a 9% decrease in net income to C$1.31 billion.
The bank set aside C$766 million for troubled loans, up from C$351 million a year earlier. For the nine months to July 31, its provisions increased to C$2.06 billion from C$450 million in the corresponding nine-month period.
Total reported net income for the July quarter fell 7.8% to C$2.96 billion, while adjusted net income was 2.1% lower at C$3.73 billion.
Adjusted diluted earnings per share declined by 4.8% to C$1.99.
“TD delivered strong revenue growth in the quarter and demonstrated the value of its diversified business mix in a challenging economic environment,” TD Bank group president and CEO Bharat Masrani said in a statement.
“Investments across our business further strengthened the Bank’s ability to deliver legendary experiences to more than 27 million customers.”
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