* Adj EPS C$1.43/shr vs est C$1.44/shr
* Loan-loss provisions fall to C$339 mln from C$557 mln
* May provide guidance on dividends in first quarter 2011 (Adds details, in U.S. dollars, unless noted)
TORONTO, Sept 2 (Reuters) - Toronto-Dominion Bank (TD.TO) said on Thursday its third-quarter profit rose 29 percent, as better credit quality and a strong retail bank performance overshadowed lower wholesale banking income.
TD, Canada’s second-largest bank, earned C$1.18 billion ($1.12 billion), or C$1.29 a share, in the three months that ended July 31, up from a profit of C$912 million, or C$1.01 a share, in the year-before period.
Stripping out several items, including a C$117 million amortization charge, adjusted profit was C$1.43 a share. Analysts polled by Thomson Reuters I/B/E/S had expected a profit of C$1.44 a share.
Like the other banks that make up Canada’s “Big Six,” TD benefited in the quarter from fewer loan defaults as the economy stabilized somewhat and the credit crisis eased.
This allowed the bank to reduce provisions for bad loans to C$339 million from a year-before C$557 million.
Profit from TD’s flagship Canadian retail bank rose 24 percent to C$841 million, a pace of growth the bank said was not likely to continue due to the cooling of the Canadian housing market and pressure on lending margins.
Income at the TD Bank U.S. franchise, which includes more than 1,000 branches in the eastern United States, climbed 30 percent to $276 million.
“Canadian personal and commercial banking posted another record quarter -- its third in a row -- and our U.S. personal and commercial banking operations also reported the highest level of adjusted earnings since we entered this market,” TD Chief Executive Ed Clark said in a statement.
TD began to push into U.S. retail banking five years ago with the acquisition of a majority stake in Banknorth, and has continued to add to the franchise with other acquisitions.
In May, TD announced the purchase of troubled U.S. lender South Financial Group. The deal, which expands TD’s presence in Florida and adds a foothold in the Carolinas, is expected to close in about a month.
TD also has a 46 percent stake in online trader TD Ameritrade Holding (AMTD.O).
Wholesale banking income fell 45 percent to C$179 million, also following the trend of TD’s rivals, as trading and underwriting revenues were hurt by the European debt crisis.
Tier 1 capital ratio, a measure of the bank’s financial stability, rose to 12.5 percent from 11.1 percent, as TD stockpiled capital in advance of global banking capital and liquidity reforms that are expected to be unveiled by the Basel banking committee in November.
Uncertainty over how much capital Canada’s banks will have to hold going forward has forced them to put dividend increases and large acquisitions on hold.
“We’ll have to wait to see the full scope and impact of proposed capital reforms,” Clark said.
“However, we hope that by the first quarter of fiscal 2011, we’ll be in a position, in the context of the board’s outlook on earnings and the bank’s dividend policy, to provide some guidance.” ($1=$1.05 Canadian) (Reporting by Cameron French, editing by Maureen Bavdek)