TORONTO, April 2 (Reuters) - Toronto-Dominion Bank (TD.TO) Chief Executive Ed Clark said on Thursday that Canada’s No. 2 bank was unlikely to raise dividends in 2009 given pressure on its earnings from a sliding economy.
“We don’t see this year, in 2009, that we will have significant earnings per share growth, so as a consequence of that it’s unlikely that we would have dividend growth either,” he said in response to a question from a shareholder in at the bank’s annual meeting, held in Saint John, New Brunswick.
Clark told investors the job of management in 2009 may be to simply maintain flat earnings per share and that this would represent a big accomplishment in the current environment.
But the chief executive also said that while the bank has a policy of paying out 35 to 45 percent of earnings as dividends, it could go above this ratio in order to maintain its dividend.
“In the first quarter we were right at the upper limit, the 45 percent,” Clark told investors.
“If our earnings don’t grow or if in fact they decline, as long as the economic environment remains reasonably stable, we can go above that ratio for a period of time, a considerable period of time, and not be in danger because of our strong capital base.” (Reporting by Jeffrey Hodgson; editing by Rob Wilson)