Toronto-Dominion Bank reports weaker-than-expected profit

Thu Dec 4, 2014 8:03am EST
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By Jeffrey Hodgson

TORONTO (Reuters) - Toronto-Dominion Bank reported a weaker-than-expected fourth-quarter profit on Thursday, even as its revenue and earnings rose, and said it expects a more challenging operating environment in 2015.

Canada's second-largest lender said its net income rose to C$1.75 billion ($1.54 billion), or 91 Canadian cents per share, in the fourth quarter ended Oct. 31, from C$1.62 billion, or 84 Canadian cents a share, a year earlier.

Excluding special items, earnings were 98 Canadian cents a share. Analysts had expected C$1.05 per share, according to Thomson Reuters data.

Chief Executive Bharat Masrani said in the earnings statement that looking to 2015, he expects the operating environment to be more challenging and the bank would focus on organic growth.

Those challenges include slow economic growth in Canada and sustained low interest rates, said Colleen Johnston, TD Bank's chief financial officer.

She noted the bank's 2014 results were also boosted by acquisitions, a weaker Canadian dollar that increased the value of U.S. earnings, and a decline in credit losses.

"Next year we would expect credit losses to rise in line with volume growth," she told Reuters.

"We are very focused on organic growth and we know we have lots of opportunities there. That's not to rule out M&A (mergers and acquisitions), but we don't have anything coming to fruition at this point."   Continued...

General view of a TD Bank branch and its drive-thru after the company held its annual general meeting in Calgary, Alberta, April 3, 2014. REUTERS/Todd Korol