Toronto-Dominion Bank (TSE:TD) (NYSE:TD), Canada’s second-largest lender by assets, reported a higher-than-expected 7.5% increase in its fiscal third-quarter profit, buoyed by stronger Canadian and U.S. retail banking.
TD became the fourth Canadian lender to post stronger-than-expected results for the third quarter despite a Canadian economy hurt by lower oil prices.
Net income rose to C$2.27bn, or C$1.19 per share, in the three months ended July 31, from C$2.11bn, or C$1.11 per share, a year earlier, the Toronto-based company said in a statement on Thursday.
Stripping out extraordinary items, earnings were C$1.20 per share, topping the C$1.18 average estimate of 14 analysts surveyed by Capital IQ.
Third-quarter revenue rose 6.6 percent to C$8bn year-over-year.
“Our results were fueled by good organic growth, continued strong credit performance, favourable currency translation, and positive operating leverage,” chief executive officer Bharat Masrani said in the statement.
But he noted that the bank ran into “a challenging operating and economic backdrop” because of Canada’s commodity-dependent economy, which is receding due to a protracted period of weak oil prices.
The bank set aside C$437mln for bad loans, up 29% from a year earlier, suggesting that overall credit quality during the third quarter remained strong amid a shrinking Canadian economy.
Shares rose 2.9% to C$51.80 in Toronto on Wednesday, paring this year’s loss to 6.7%.
Adjusted profit from Toronto-Dominion’s Canadian retail division, which includes wealth management and insurance, rose 7.9% to C$1.56bn.
Adjusted profit from U.S. operations jumped 16% to C$650mln from a year earlier, after benefiting from higher contributions from its TD Ameritrade brokerage stake and a weakening Canadian dollar compared with the greenback.
Profit from wholesale banking increased 11% to C$239mln.
Underwriting and advisory fees fell 18 % to C$122 million, while trading income jumped 31% to C$425mln.
The bank retained its quarterly dividend at C$0.51 per share.
Earlier on Thursday, Canadian Imperial Bank of Commerce (TSE:CM) reported profit that beat analysts’ estimates and lifted its dividend.
On Wednesday, Royal Bank of Canada (TSE:RY), the country’s largest lender, reported a 4% profit gain on record earnings from domestic banking and increased its dividend.
On Tuesday, Bank of Montreal (TSE:BMO), the country’s fourth-largest bank, reported better-than-estimated profit, helped by gains in consumer banking and wealth management.
Bank of Nova Scotia (TSE:BNS), the third-largest lender, reports results on Friday.