TD Bank profit jumps 21 percent; dividend raised

Thu Feb 28, 2013 8:35am EST
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TORONTO (Reuters) - Toronto-Dominion Bank (TD.TO: Quote) reported a stronger-than-expected 21 percent rise in quarterly profit on Thursday, driven by lower loan losses and lending growth at its retail banks, and raised its dividend by 5 percent.

The bank, Canada's second largest, earned C$1.79 billion, or C$1.86 a share, in the first quarter ended on January 31. That compared with C$1.48 billion, or C$1.55 a share, a year earlier.

Net profit was reduced by a C$70 million charge to cover litigation costs stemming from its connection to a $1.2 billion Ponzi scheme run by Florida lawyer Scott Rothstein, who used the bank's accounts.

However, the charge was less than a Rothstein-related C$171 million litigation charge taken in the first quarter of 2012.

Excluding unusual items, it earned C$2.00 a share, up from C$1.86. That topped analysts' expectations of a profit of C$1.92, according to Thomson Reuters I/B/E/S.

The beat was due in part to lower provisions for bad loans, Barclays Capital analyst John Aiken said in a note.

Provisions fell 4.7 percent to C$385 million.

Canadian retail banking income rose 11 percent to C$920 million, as the lower loan-loss provisions offset narrower interest margins and sluggish loan growth of 6 percent year over year.

Fears that Canadian lending growth will slow significantly due to a cooling housing market and more cautious consumer lending appeared to take root in the first quarter, as evidenced by results at TD and other Canadian lenders.   Continued...

The outside of a TD Bank branch is seen in New York January 17, 2012. REUTERS/Shannon Stapleton