Skip to main content
The Globe and Mail
Support Quality Journalism
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); }

People wait outside of a TD Bank branch on April 16, 2020, in the Harlem neighbourhood of New York City.

David Dee Delgado/Getty Images

Toronto-Dominion Bank will set aside $1.1-billion to cover loans that could go sour in its U.S. retail banking division in the second fiscal quarter – a 345-per-cent increase from the previous three months.

The Toronto-based bank pre-announced its provisions for credit losses within its U.S. retail arm for the quarter that ended April 30. TD will report its full second-quarter results on May 28.

The early announcement provides a narrow glimpse of how large an expected surge could be in Canadian banks’ provisions – the money they must set aside to cover loans that could go bad – because of the damage done by a broad economic shutdown to curb the spread of the novel coronavirus.

Story continues below advertisement

In the second quarter a year ago, TD reported $226-million in provisions for credit losses for its U.S. retail division. That figure will increase 487 per cent, year-over-year. In the first fiscal quarter of 2020, U.S. retail provisions were $319-million.

TD did not disclose second-quarter provisions for the rest of the bank, including its Canadian operations.

The bank released the $1.1-billion figure early after filing call reports to the U.S. Federal Deposit Insurance Corporation (FDIC), which include information on the condition and income of TD’s U.S. operations. That information is compiled using a different accounting standard than Canadian bank earnings, however, and covers a different fiscal quarter.

“Within this context, and considering the economic impact of the COVID-19 pandemic,” TD decided that releasing additional information on its U.S. retail-banking provisions “would be beneficial to shareholders at this time,” the bank said in a statement on Friday.

TD also revealed it will take $600-million in provisions in its corporate segment for the second quarter. But most of those provisions are fully offset by the terms of partnerships the bank has with U.S. retailers to offer credit cards, “and therefore will result in no impact to Corporate or total bank earnings,” the bank’s statement said.

Of all the major Canadian banks, TD has by far the largest retail-banking network in the United States, with more than 1,200 branches spread across the eastern part of the country.

Eight Capital analyst Steve Theriault had estimated the bank would report $868-million in U.S. retail-banking provisions for the second quarter and $2.2-billion in provisions for TD as a whole. “On balance we now believe that risk is to the upside,” he said in a research note on Friday, but he cautioned that estimates vary widely “and that this gives insight primarily to one piece of the puzzle.”

Story continues below advertisement

Major U.S. banks have already reported results for their first quarter, which ended March 31, including massive increases in provisions for credit losses. Yet most of those provisions were taken based on forward-looking models and economic projections, rather than on loans that are currently impaired.

The first Canadian banks to report fiscal second-quarter earnings will be Bank of Nova Scotia and National Bank of Canada on May 26.


Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.

Report an error Editorial code of conduct
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies