TD profit beats analyst expectations amid gains from higher interest rates

FILE PHOTO: FILE PHOTO: A Toronto-Dominion Bank sign is seen outside of a branch in Ottawa

Toronto-Dominion Bank’s net income slipped about nine per cent to $3.21 billion in the third quarter from last year on rising costs and larger stockpiles of cash being set aside for sour loans.

The bank’s adjusted earnings came to $2.09 per share, beating average analyst expectations of $2.04 per share.

“Continued business momentum, increased customer activity and the benefits of our deposit rich franchise contributed to TD’s strong performance in the third quarter,” chief executive Bharat Masrani said in a press release accompanying the results. “Investments in talent and innovation, combined with our focus on prudent risk and financial management, strengthened our business and extended our competitive advantage.”

Net income in TD’s Canadian retail segment edged up six per cent to $2.25 billion on rising revenues as well as banking and insurance volumes. Rising interest rates and record credit-card sales also contributed to the growth.

However, expenses widened by eight per cent and provisions for credit losses grew by $70 million compared to a year earlier. Provisions for credit losses reached $351 million in the third quarter.

The bank’s U.S. retail business revenues rose 11 per cent on an annual basis on personal loan and deposit growth.

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But the wholesale banking segment’s net income tumbled 18 per cent year over year to $271 million on rising non-interest expenses and higher provisions for credit losses. The bank said it expects this segment to expand following its proposed acquisition of Cowen Inc.

The bank’s expenses grew by eight per cent as it invested in business growth, employees and technology. TD also noted $29 million in acquisition charges for its First Horizon Corp. deal announced in February.

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