Toronto-Dominion Bank’s second quarter profit beat analyst estimates thanks to growth in Canadian personal and commercial banking, improving loan margins and lower loan losses — all of which are common themes across the Big Six banks this earnings season.
TD TD-T reported net income of $3.8-billion, or $2.07 per share, up three per cent from the year prior. However, the bank’s total profit included a one-time boost of $224-million stemming from a lawsuit settlement. After adjusting for one-time items, TD’s earnings amounted to $2.02 per share, down slightly from the year prior, but beating analyst estimates of $1.93 per share.
Like many of its Big Six rivals, TD delivered strong revenues in its Canadian personal and commercial banking arm, with loan growth rising nine per cent from the year prior, driven by residential real estate and commercial lending.
TD’s residential real estate lending business in Canada grew by nine per cent relative to the year prior, while its commercial lending division grew by 16 per cent. Net interest margins, or the spread between the rates at which TD borrows money and then lends it out to clients, also grew, allowing the bank to make more money per loan.
However, TD’s expenses in this division also grew nine per cent which offset some of these gains, as the bank spends to upgrade its technology and increases employee pay.
In the U.S., TD’s retail segment also reported profit growth, albeit at a slower rate than in Canada. The…
