Retail results spur profit at TD, Laurentian banks

Thu Sep 2, 2010 4:57pm EDT
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By Cameron French

TORONTO (Reuters) - Strong retail bank results drove quarterly profit higher at Toronto-Dominion Bank and its smaller rival Laurentian Bank, capping off a reporting period for Canadian banks that featured better credit quality but weak capital markets earnings.

Shares of the two banks ended mixed in Toronto on Thursday, and both lagged tiny Canadian Western Bank, which jumped 3.1 percent a day after the regional lender reported an unexpectedly big jump in results.

TD, Canada's second-largest bank, earned C$1.18 billion ($1.12 billion), or C$1.29 a share, in its financial third quarter, up from a profit of C$912 million, or C$1.01 a share, a year earlier.

Stripping out several items, adjusted profit was C$1.43 a share, about even with analysts' expectations of a C$1.44 a share profit, as polled by Thomson Reuters I/B/E/S.

Profit from TD's flagship Canadian retail banking operations rose 24 percent to C$841 million, while income at TD's U.S. franchise, which includes more than 1,000 branches in the Eastern United States, climbed 30 percent to $276 million.

"The positive for the quarter at TD is the continued growth that they're getting from their retail franchise, and this is on both sides of the border," said John Aiken, an analyst at Barclays Capital.

But TD Chief Executive Ed Clark told a conference call that its U.S. operations could come under pressure due to sluggish economic growth and due to recently passed U.S. banking reform legislation that will affect how banks can charge customers.

"It's likely that we're going to see slower revenue growth for the next few quarters as we absorb the impact of these changes," he said.   Continued...