December 3, 2015 / 12:47 PM / 2 years ago

UPDATE 3-TD quarterly earnings climb on retail, capital markets

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(Adds share move, last paragraph)

By John Tilak

TORONTO, Dec 3 (Reuters) - Toronto Dominion Bank reported a higher quarterly profit on Thursday, with growth in its domestic retail and capital markets divisions offsetting concerns about the impact of depressed oil prices.

TD, Canada's biggest lender by assets, also took a restructuring charge of C$349 million ($261.72 million) in the fourth quarter ended on Oct. 31 for cost cuts. Reuters had reported in October that the bank was laying off staff in Canada and the United States following a companywide review.

Profit rose 15 percent at the bank's Canadian retail division and 23 percent at its wholesale banking unit.

Despite investors' worries about the impact of a weak economy and the oil price slide on the five biggest Canadian banks, they all managed to beat market expectations for the fourth quarter.

TD recorded C$99 million in impaired loans for the oil and gas sector in the quarter, up from C$35 million in the third quarter. As an allowance for credit losses in the energy industry, the bank set aside C$25 million, compared with C$6 million in the third quarter.

TD has the smallest oil and gas exposure of the major Canadian banks; the energy sector forms less than 1 percent of its total loan portfolio.

The bank has not observed any surprises or causes for alarm in the energy sector, Chief Financial Officer Colleen Johnston said.

"Everything that we're seeing is very much in line with our expectations," she said in an interview. "We're having a slight increase in impaired (loans) but completely in line with our expectations."

Johnston said the company expected to gain from the stronger U.S. dollar and any potential rise in interest rates next year. "We do expect to continue to have strong loan deposit and wealth asset growth."

Net income rose to C$1.84 billion, or 96 Canadian cents per share, from C$1.75 billion, or 91 Canadian cents a share, a year earlier.

Excluding special items, earnings rose to C$1.14 per share. Analysts on average had expected C$1.13, according to Thomson Reuters I/B/E/S.

The stock slipped 1 percent in morning Toronto trading.

$1 = 1.3335 Canadian dollars Reporting by John Tilak; Editing by Lisa Von Ahn and Frances Kerry

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