Toronto-Dominion Bank (TSX:TD) shares moved higher as the bank announced an earnings beat for the fiscal second quarter and unveiled a restructuring plan, including a 2% workforce reduction impacting about 2,000 employees.
The restructuring plan aims to save between C$550 million to $650 million pre-tax from the workforce reduction and other cost savings measures, including real estate optimization.
For the quarter ending on April 30, TD’s earnings were C$11.1 billion, up 334% year-over-year driven by the bank’s sale of its remaining equity investment in The Charles Schwab Corporation, resulting in a one-time gain of C$8.6 billion after tax.
Adjusted earnings per share fell slightly year-over-year to C$1.97 from C$2.04, but beat estimates of C$1.76.
Revenue for the quarter was C$15.1 billion, topping estimates of C$13.61 billion and marking a 9% year-over-year increase.
The bank set aside approximately C$1.3 billion in provisions for credit losses, up from C$1.1 billion in the year-ago quarter but less than analysts expected.
"TD delivered strong results this quarter, with robust trading and fee income in our markets-driven businesses as well as deposit and loan growth in Canadian Personal and Commercial Banking," TD CEO Raymond Chun said in a statement.
Chun added that the company’s US balance restructuring remains on track, and it is making progress on its anti-money laundering remediation.
Analysts at Jefferies welcomed TD’s report, noting lower-than-anticipated credit loss provisions led to a strong beat.
“TD came in well ahead of expectations, largely as provisions in the quarter (both performing and impaired) were better than forecast,” they wrote.
“Further, the anticipated decline in contributions from the US retail bank was offset by strength in its other segments. The restructuring of its US investment portfolio and retail bank balance sheet continues, with growth evident outside of these headwinds.”
The analyst wrote that they are impressed with the bank’s underlying growth and can see the path to improved profitability.
“We believe that investors will laud TD's progress and potential relative upside in earnings expectations from the restructuring plan, as well as better than anticipated underlying performance,” they wrote.
Shares of TD added 3.2% at about $93 in the early afternoon on Thursday.