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TD Bank beats estimates as Canadian business lending, assets grow

Randy Mancini 16 Mar 3
FILE PHOTO: FILE PHOTO: A Toronto-Dominion Bank sign is seen outside of a branch in Ottawa
FILE PHOTO: A Toronto-Dominion Bank (TD) sign is seen outside of a branch in Ottawa, Ontario, Canada, May 26, 2016. REUTERS/Chris Wattie/File Photo

March 3, 2022

TORONTO (Reuters) – Toronto-Dominion Bank beat analysts’ estimates for quarterly profit on Thursday, with an improvement in earnings driven by growth in lending, particularly to businesses in Canada, and increased assets both at home and in the United States.

Net income excluding one-off items rose to C$3.8 billion ($3.01 billion), or C$2.08 per share, in the three months ended Jan. 31, from C$3.4 billion, or C$1.83 per share, a year earlier. Analysts had expected C$2.04 a share, according to IBES data from Refinitiv.

TD’s results round out a better-than-expected quarter for Canadian banks, with many reporting loan growth, higher fees and continued strength in trading and investment banking all helping to soften the impact of higher expenses and margin pressures.

Just like its rivals, Canada’s second-largest lender said 14% growth in business loans from a year earlier in its home market and an 8% rise in personal loans lifted revenues, despite net interest margins shrinking by 12 basis points.

That also helped offset a decline in U.S. loan volumes, in part caused by Washington’s loan forgiveness programs, although expenses also declined there from a year ago, in contrast to the Canadian market where they rose 8%.

The bank also reported a rise in assets under administration, up 15% in Canada and 23% higher in the United States.

In contrast to some other Canadian banks, TD reported lower earnings for its trading and investment banking unit, as expense growth outpaced an increase in revenues.

Credit loss provisions totalled C$72 million, about a quarter of what the bank set aside a year earlier, while pre-tax, pre-provisions earnings grew 5.7% from a year earlier.

Earlier this week, TD said it had agreed to buy First Horizon Corp for $13.4 billion to strengthen its U.S. presence.

($1 = 1.2638 Canadian dollars)

(Reporting By Nichola Saminather in Toronto and Mehnaz Yasmin in Bengaluru; Editing by Shailesh Kuber and Tomasz Janowski)