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TD Bank to Consider Dividend Boost, Clark Says

Nov. 25 (Bloomberg) -- Toronto-Dominion Bank may raise its dividend after the fiscal first quarter ends in January, Chief Executive Officer Edmund Clark said.

“Whether we raise it or not, we will address the issue in the first quarter of next year,” Clark told reporters today after addressing the Canadian Club of Montreal. “If our sustainable earnings tell us that we should increase dividends, we will. If they tell us not to, we won’t.”

Michael Goldberg of Desjardins Securities said Toronto-Dominion may raise the dividend when it announces fourth-quarter results Dec. 2, ending a two-year drought on higher payouts among the country’s six largest banks.

Canada’s second-largest bank is expected to increase its dividend 4.9 percent to 64 cents a share in the first quarter, according to Bloomberg Dividend Forecasts.

Clark also said that Canadian banks could expand the automobile leasing business by offering loans through dealerships rather than in bank branches.

“From the consumer’s point of view, they’d like to be able to do it in all the different channels,” said Clark, 63. “If that’s not politically possible, clearly where there is an alignment of dealers, manufacturers and banks would be to make it available to the dealer community. That might be a compromise.”

Health-Care Costs

Canada must address “structural issues” such as its productivity rate and rising health-care costs to gain an advantage over other countries, Clark said in his speech.

“I believe Canada is uniquely positioned to achieve a permanent competitive advantage relative to other countries if we do, in fact, focus on tackling the longer-term issues,” he said.

Clark said the issues could be overlooked as the country remains focused on immediate challenges amid the economic recovery. Lower-income Canadians already face higher effective marginal tax rates than higher-income Canadians, he said.

Clark said the federal government’s forecasts for a balanced budget are “about right.”

Finance Minister Jim Flaherty has said erasing the deficit, which the government expects to total C$165.2 billion ($163.4 billion) over the next five years, is a priority and he plans to return to a balanced budget in 2015.

-- With assistance from Doug Alexander in Toronto. Editor: David Scanlan

To contact the reporters on this story: Frederic Tomesco in Montreal at tomesco@bloomberg.net; Sean B. Pasternak in Toronto at spasternak@Bloomberg.net

To contact the editors responsible for this story: David Scanlan at dscanlan@bloomberg.net; or David Scheer at dscheer@bloomberg.net.

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