Toronto-Dominion Profit Climbs 7.9% on Lending; Lifts Payout

  • TD profit misses analysts' estimates by one cent a share
  • CIBC raises dividend as first-quarter profit tops estimates

Toronto-Dominion Bank said fiscal first-quarter profit rose 7.9 percent on gains in its Canadian and U.S. retail businesses. The lender raised its quarterly dividend 7.8 percent to 55 cents a share.

Net income for the period ended Jan. 31 climbed to C$2.22 billion ($1.62 billion), or C$1.17 a share, from C$2.06 billion, or C$1.09, a year earlier, the Toronto-based firm said Thursday in a statement. Profit excluding some items was C$1.18 a share, missing the C$1.19 average estimate of 15 analysts surveyed by Bloomberg.

Earnings from Canadian personal and commercial banking climbed 5 percent and U.S. retail operations surged 20 percent, helped by a stronger greenback relative to the Canadian dollar and improved contributions from the bank’s stake in brokerage TD Ameritrade Holding Corp. Toronto-Dominion has more branches in the U.S. than Canada.

“We were particularly pleased that our retail focused businesses continued to grow earnings this quarter," Chief Financial Officer Riaz Ahmed said in a telephone interview. “We continue to see great volume growth, both on the loan side and the deposit side.”

Revenue Climbs

Revenue rose 13 percent to C$8.61 billion from a year earlier, according to the statement. Toronto-Dominion set aside C$642 million for bad loans in the quarter, up 77 percent from a year earlier. Impaired loans to pipeline firms and oil and gas companies fell to C$86 million from C$99 million in the fourth quarter. The bank had C$4.2 billion of drawn exposure to oil and gas producers as of Jan. 31, with 69 percent of the loans to non-investment grade borrowers, Toronto-Dominion said in a separate statement.

Canadian retail profit, which includes banking, wealth management and insurance, rose 4.4 percent to C$1.51 billion. U.S. retail operations had profit of C$751 million. In U.S. currency, the unit’s earnings climbed 3 percent to $552 million. Toronto-Dominion had assets of C$1.17 trillion, making it the second-largest lender after Royal Bank of Canada.

CIBC Beats

Earlier Thursday, Canadian Imperial Bank of Commerce raised its quarterly dividend 2.6 percent to C$1.18, its sixth straight increase, after reporting higher profit driven by retail and business banking.

Net income rose 6.4 percent to C$982 million, or C$2.43 a share, from C$923 million, or C$2.28, a year earlier, CIBC said in a statement. Excluding some items, profit was C$2.55 a share, beating the C$2.37 average estimate of 16 analysts surveyed by Bloomberg.

Retail and business banking rose 6.2 percent to C$684 million from a year earlier, while wealth management slid 7 percent to C$119 million, the Toronto-based lender said. Earnings from CIBC’s capital markets unit fell 10 percent to C$244 million.

Revenue climbed 3.7 percent to C$3.59 billion, CIBC said. The bank set aside C$262 million for bad loans, up 40 percent from a year ago. Oil-and-gas impaired loans rose to C$128 million from C$125 million in the fourth quarter.

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