TD reports quarterly earnings ahead of market forecasts

Thu Mar 2, 2017 8:13am EST
 
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TORONTO (Reuters) - Toronto-Dominion Bank (TD.TO: Quote), Canada's second-biggest lender, on Thursday reported quarterly earnings ahead of market expectations, helped by a strong performance in both the United States and Canada.

TD said net income, before one-off items, rose to C$2.6 billion ($1.9 billion), compared with C$2.2 billion a year ago. Earnings per share, before one-off items, in the first quarter ended Jan. 31 rose to C$1.33, compared with C$1.18 a year ago. Analysts had on average forecast earnings of C$1.27 per share during the quarter, according to Thomson Reuters I/B/E/S.

RBC Capital Markets analyst Darko Mihelic said he viewed the performance as "mildly positive".

"Core EPS was better than our expectations and consensus, revenue and efficiency were better than expected, although credit came in worse relative to our expectations," he said.

The bank's Canadian retail business reported net income of C$1.6 billion, up 4 percent, and its U.S. retail business posted net income of C$800 million, up 7 percent.

"Our focus on organic growth, combined with favorable market conditions this quarter, led to strong results in our retail and wholesale business segments on both sides of the border," Chief Executive Bharat Masrani said.

TD's investment banking business produced a particularly strong performance, lifting net income by 66 percent to C$267 million, although that partly reflected a weak quarter last year due to the low price of oil at that time which had impacted the bank's clients in the energy sector.

"The Canadian economy overall is on a much better footing today than it felt like a year ago and, obviously, market activity has picked up considerably post the U.S. election," Chief Financial Officer Riaz Ahmed said in an interview.

"There is momentum right now and companies are taking advantage, to look at acquisitions and do financing," he added.   Continued...

 
A Toronto-Dominion Bank (TD) sign is seen outside of a branch in Ottawa, Ontario, Canada, May 26, 2016. REUTERS/Chris Wattie - RTX2EC8O