March 4, 2010 / 12:54 PM / in 8 years

UPDATE 2-TD Bank Q1 profit rises, beats estimates

* Q1 net EPS C$1.44 vs C$0.75 yr-ago

* Q1 adjusted EPS C$1.60 vs expected C$1.35

* Loan losses down (Recasts, adds detail, CEO comment)

TORONTO, March 4 (Reuters) - Toronto-Dominion Bank (TD.TO) said on Thursday profit surged in the first quarter as provisions for loan losses fell and revenue hit a record C$5.04 billion, handily beating market expectations.

Canada’s second-largest bank said it had net income of C$1.30 billion, or C$1.44 a share, in the first quarter ended Jan. 31. That compares to C$653 million, or 75 Canadian cents a share, in the same period a year earlier.

After one-time items are excluded from the first quarter and the year-ago period, the bank said it had adjusted income of C$1.43 billion, or C$1.60 a share, up from C$1.09 billion, or C$1.27 a share, a year ago.

Extraordinary items included amortization of intangibles of C$112 million, compared to C$127 million a year earlier, and a gain of C$4 million for a change in the fair value of derivatives hedging, compared with a loss of C$200 million a year earlier, plus restructuring charges and other items.

Analysts on average were expecting earnings of C$1.35 a share, according to Thomson Reuters I/B/E/S.

The amount of money the bank set aside to cover bad loans, known as provisions for loan losses, fell to C$517 million in the quarter from C$630 million a year ago, and was down from the C$521 million in provisions in the fourth quarter.

Domestic Canadian banking powered TD’s strong quarter, with record earnings of C$720 million, up 23 percent from the same period a year earlier. Real-estate secured lending and rising deposits more than offset a rise in loan losses

Businesses and consumers have struggled to repay debts amid the recession, and analysts were awaiting the banking sector’s first-quarter results to gauge whether losses have peaked.

“Provision for credit losses was stable when compared to the prior quarter. Business banking provisions remained low and we are seeing signs that losses may be close to peaking in personal banking,” Chief Executive Ed Clark said of the domestic banking segment.

U.S. banking, which has had more losses and struggled to recover from the recession as quickly as in Canada, also improved in the quarter, though not as dramatically.

The segment generated $216 million in adjusted income in the quarter, up 5 percent from a year earlier, as provisions for loan losses were flat at $191 million.

Wholesale banking income surged 40 percent to C$372 million as capital markets activity picked up and credit spreads tightened.

($1=$1.03 Canadian)

Reporting by Andrea Hopkins, editing by Dave Zimmerman

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