TD beats forecasts as profit climbs on retail banking, trading gains

Toronto-Dominion Bank, Canada's biggest lender by assets, said fiscal fourth-quarter profit rose 5.3 per cent as higher earnings from retail banking and gains in trading revenue helped counter $243-million in restructuring costs tied to job cuts.

Net income for the period ended Oct. 31 climbed to $1.84-billion, or 96 cents a share, from $1.75-billion, or 91 cents, a year earlier, the Toronto-based lender said Thursday in a statement. Profit excluding some items was $1.14 a share, beating the C$1.13 average estimate of 14 analysts surveyed by Bloomberg.

"We're very pleased with both the quarter and the year," Chief Financial Officer Colleen Johnston said in a telephone interview. "As we look to 2016, we're going to continue to focus on three areas: driving organic revenue growth, diligently managing our expense growth and continuing to make strategic investments to adapt and innovate for the future."

Bharat Masrani, 59, who took over as chief executive officer in November 2014, spent his first year overseeing companywide cost cuts and eliminating 1,594 jobs, or about 1.9 per cent of the firm's workforce, according to disclosures. The bank's latest charge followed a $228-million cost in the second quarter tied to its initial wave of restructuring, which focused mostly on U.S. operations. Toronto-Dominion had 80,554 employees as of Oct. 31.

Revenue Climbs

Revenue rose 8 per cent to $8.05-billion from a year earlier, beating analysts' estimates. Provisions for credit losses soared 37 per cent to $509-million after the bank set aside money in the U.S. for floods in South Carolina and its acquisition of Nordstrom Inc.'s credit-card portfolio. TD said it plans to repurchase as many as 9.5 million, or 0.5 per cent, of its outstanding shares.

Toronto-Dominion's U.S. retail operations posted adjusted profit of $646-million, up 27 per cent from a year earlier, after benefiting from a stronger greenback compared to the Canadian dollar and higher contributions from its 41 per cent stake in U.S. brokerage TD Ameritrade Holding Corp. TD, with more branches in the U.S. than Canada, said adjusted earnings for its U.S. retail business climbed 6.3 per cent to $491-million in U.S. currency.

Canadian retail adjusted profit, which includes wealth management and insurance, rose 10 per cent to $1.5-billion. Adjusted earnings from domestic personal-and-commercial banking climbed 9.9 per cent to C$1.12-billion, while earnings from wholesale banking increased 23 per cent to $196-million.

CIBC Beats

Earlier Thursday, Canadian Imperial Bank of Commerce said fourth-quarter profit fell 4.1 per cent as costs tied to restructuring offset gains in capital markets and retail and business banking. The firm raised its dividend 2.7 per cent to $1.15 a share, its fifth quarterly increase in a row.

Net income slid to $778-million, or $1.93 a share, from $811-million, or $1.98, a year earlier, the Toronto-based lender said in a statement. Profit excluding some items was $2.36 a share, beating the $2.33 average estimate of 16 analysts surveyed by Bloomberg. The bank took a $161-million charge as it seeks to improve efficiency with technology, in range with an Oct. 7 disclosure.