TD Beats Estimates on Strong Results Across Its Business Lines

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(Bloomberg) — Toronto-Dominion Bank topped estimates on better-than-expected results in both its US and domestic retail divisions as well as its markets-related businesses.

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Canada’s No. 2 lender earned C$2.44 a share on an adjusted basis in its fiscal first quarter, according to a statement Thursday, more than analysts’ C$2.25 average estimate.

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Adjusted net income at the company’s US retail division totaled C$1.01 billion ($736 million) in the three months through January, better than the C$974 million average forecast of four analysts in a Bloomberg survey. Results at the company’s Canadian banking unit, capital-markets division and wealth managment and insurance businesses all outperformed expectations as well.

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The bank reported “record adjusted earnings and significant year-over-year adjusted return on equity growth, reflecting momentum across our businesses,” Chief Executive Officer Raymond Chun said in the statement. 

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On credit, Toronto-Dominion recorded C$1.04 billion in provisions for possible loan losses in the first quarter, just under the C$1.1 billion analysts had forecast.

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It’s the last of Canada’s big six banks to report and joined its peers in topping analyst estimates in a quarter that saw the lenders post broad revenue growth across their businesses.

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Toronto-Dominion has taken steps to restructure its US balance sheet in a bid to stay well below an asset cap imposed by regulators in the wake of its anti-money-laundering scandal. After selling less-lucrative loan portfolios and repositioning its securities holdings, the company’s management hopes to boost earnings and return on equity at the division. 

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The bank has slashed expenses companywide through a restructuring program it launched last year. Toronto-Dominion recorded C$200 million in pretax costs linked to those efforts in the first quarter — bringing total charges to C$886 million — and said the program will generate C$775 million in annual savings. That entailed cutting about 3% of the company’s employees.

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Almost three years after scrapping its $13 billion deal to acquire First Horizon Corp., Toronto-Dominion is still sitting on more excess capital than its peers. To help boost return on equity — the measure of profit per every dollar of shareholder capital — the bank has been active in buying back shares.

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