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TD Bank Group TD-T says it expects to earn about $141 million in equity net income in its first quarter of 2024 from its holdings in Charles Schwab SCHW-N as U.S. banks report earnings.

Last year, TD reported $285 million in net income in its first quarter from its investment in Schwab.

TD says adjusted net income should work out to about $230 million, for about a 30 per cent drop from last year’s $328 million.

Canaccord Genuity analyst Matthew Lee says the Schwab results came in slightly higher than expected, but that the financial firm’s outlook for the year disappointed.

Lee says key takeaways for the year from U.S. bank earnings in recent days are net income pressure, improved capital markets and continued credit challenges on commercial real estate loans.

He says BMO and RBC should benefit the most from improvements in U.S. capital markets, while TD will be most affected by softer net interest income.

Editor’s note: This is a corrected story. A previous version had an incorrect percentage for the drop in earnings.

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