TD's Canadian operations help it top analysts third-quarter expectations

TD Bank signage in Mississauga on April 15, 2025. (Credit: Peter J. Thompson/National Post)

Toronto-Dominion Bank beat analysts’ expectations after reporting higher third-quarter profits on Thursday that were driven by a positive performance in its Canadian personal and commercial banking and wealth management and insurance segments.

TD’s net income for the three months ending July 31 was $3.3 billion, compared to a loss of $181 million during the same period last year when the bank had to keep aside a significant amount of money for investigations related to its anti-money laundering program, resulting in net earnings per share of $1.89.

Its adjusted net income — which removes the impact of non-recurring items — was $3.9 billion, compared to $3.65 billion last year, resulting in adjusted earnings per share of $2.20, which beat analysts’ expectations of about $2.05 per share.

“Our teams delivered another quarter of strong performance, driven by robust client activity and disciplined execution,” chief executive Raymond Chun said in a statement. “We are well-positioned to build on this momentum as we compete, grow and build our bank for the future.”

Observers closely monitor big-bank earnings as they often offer crucial insights into the state of the economy. Bank of Montreal, Bank of Nova Scotia, Canadian Imperial Bank of Commerce and Royal Bank of Canada also beat analysts’ expectations, while National Bank of Canada fell slightly short.

Given the uncertainty surrounding tariffs, analysts are closely monitoring the provisions for credit losses (PCLs), the reserves lenders set aside to address potentially problematic loans, a key metric for measuring the health of a bank’s loan book as well as the ability of households and businesses to pay their debts.

TD reported PCLs of $971 million in the third quarter, down from about a billion dollars in the same quarter a year ago.

John Aiken, an analyst at Jefferies Inc., said TD’s results were solid and came in ahead of expectations, partly due to lower-than-forecast PCLs.

“While progress is being made in its U.S. platform, we note that it was the one segment that came in (slightly) below expectations,” he said in a note on Thursday.

The bank’s Canadian personal and commercial banking segment had a record net income of $1.9 billion, four per cent higher than last year, which TD said was driven by a higher revenue and partially offset by higher non-interest expenses and PCLs. Revenue was a record $5.2 billion.

“Canadian personal banking achieved record year-to-date digital sales in personal chequing, savings and cards combined,” TD said in a statement.

Banks expected to have kept aside less money TD Bank names John MacIntyre as new chair

Story Continues

TD’s wealth management and insurance segment posted a net income of $703 million, up 63 per cent from last year, driven by “record assets and record earnings in wealth management, strong insurance premium growth, and lower estimated losses from catastrophe claims,” the bank said.

• Email: [email protected]