(Adds interview with chief financial officer, further results data)
By Jeffrey Hodgson
TORONTO, Dec 4 (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."
She also said that while the Canadian housing market appears to be overvalued, the bank does not expect a hard landing given low rates and a still expanding economy.
"We actually think our growth in that business will be slightly higher in 2015 than it was in 2014, our lending growth," she said.
Profits at TD's Canadian retail arm climbed to C$1.3 billion from C$1.24 billion a year earlier, helped by the purchase of part of the lucrative Aeroplan Visa credit card portfolio from Canadian Imperial Bank of Commerce.
Profit at TD's U.S. retail banking operation, which includes more than 1,300 branches on the eastern seaboard, also climbed to C$426 million from C$371 million.
Wholesale banking income, which includes trading, investment banking and advisory businesses, rose to C$160 million from C$122 million.
$1 = 1.1351 Canadian dollars Editing by W Simon