Toronto-Dominion Bank on Thursday reported a 25% increase in fiscal fourth-quarter earnings, in line
with analyst expectations, as a strong performance from the bank's U.S. retail and wholesale banking divisions helped
offset moderating growth in Canada.
TD, Canada's second-biggest bank by assets, said its overall profit for the quarter ended Oct. 31 rose to 2.30 billion
Canadian dollars (US$1.71 billion), or C$1.20 a share, from C$1.84 billion, or 96 Canadian cents a share, a year
Adjusted to exclude items, the bank said it earned C$1.22 a share, meeting the Thomson Reuters mean estimate. Revenue
rose almost 9% to C$8.75 billion.
"Where growth in the Canadian market moderated, the performance of our U.S. retail business and wholesale franchise
grew our overall net income," Chief Financial Officer Riaz Ahmed said in a phone interview.
"I would expect these trends to continue in 2017 as the U.S. economic picture is brightening and we are well poised to
continue growing earnings," he said.
Loan-loss provisions, or money set aside to cover bad loans, totaled C$548 million in the latest quarter, up from C$
509 million a year earlier but down from C$556 million in the previous quarter. Mr. Ahmed said the increase came largely
from the bank's auto portfolio, while there were no credit losses in its wholesale business during the quarter.
Canadian lenders have mostly sidestepped the fallout from the prolonged commodity-price rout. At just 1.2% of total
loans, TD has one of the lowest exposures to the oil-and-gas sector among Canadian banks.
"Overall for the year, it's mostly volume-related," Mr. Ahmed said, adding that the bank had encountered "a little bit
of effect from oil's impact to provinces, but it's very much moderating in the second half of the year."
Mr. Ahmed said he expects improved market conditions for TD's U.S. business over the next year, with a steepening
yield curve and stronger U.S. dollar bolstering overall economic activity, which should contribute to earnings growth of
7% to 10%. TD also said it expects "moderate pressure" on gross margins in 2017 due to the low-interest rate environment
and competitive pricing in the market.
TD's report caps a week of mixed results from Canada's big lenders. Bank of Nova Scotia, the country's third-largest
by assets, kicked off earnings season on Tuesday with a better-than-expected profit. Canadian Imperial Bank of
Commerce, the fifth largest, followed suit earlier Thursday. On Wednesday, Canada's biggest lender, Royal Bank of
Canada, reported results that fell shy of expectations. Bank of Montreal, ranked fourth in size, will wrap up bank-
earnings seasonon Dec. 6.
Judy McKinnon contributed to this article.
Write to David George-Cosh at email@example.com
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