Home Banking TD Bank Q3 earnings top estimate on strong Canadian, U.S. retail banking (NYSE:TD)

TD Bank Q3 earnings top estimate on strong Canadian, U.S. retail banking (NYSE:TD)

TD Bank Q3 earnings top estimate on strong Canadian, U.S. retail banking (NYSE:TD)

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TD Bank Group’s (NYSE:TD) (TSX:TD:CA) fiscal Q3 earnings exceeded the average analyst estimate as its Canadian and U.S. retail banking businesses, along with higher net interest income, offset the softer results from its Wholesale Banking unit, which was affected by volatile markets and a weak underwriting environment. In Thursday premarket trading, TD shares were up 0.2%.

Adjusted EPS for the quarter ended July 31, 2022 was C$2.09 (US$1.62), topping the C$2.03 consensus, increased from C$2.02 in Q2 and from C$1.96 in the year-ago quarter.

Q3 net interest income of C$7.04B (US$5.45B) grew from C$6.38B in the prior quarter and from C$6.00B in the year-ago quarter.

Q3 provision for credit losses was C$351M, which increased from C$27M in the prior quarter and compared with recovery of C$37M in Q3 2021.

Total loans, net of allowance for loan losses, increased to C$790.8B from C$765.0B in the prior quarter.

Total deposits of C$1.20T vs. C$1.18T at April 30, 2022.

Q3 adjusted return on common equity of 16.1% from 15.9% in Q2 and from 15.6% in Q3 2021.

TD Bank’s (TD) Canadian Retail net income C$2.25B vs. C$2.24B in the prior quarter and C$2.13B in the year-ago period. The unit’s revenue of C$7.02B climbed 7% Y/Y, helped by momentum in banking and insurance volumes, rising interest rates, and growth in customer activity, including record credit card sales, partly offset by lower wealth revenue due to market conditions.

U.S. Retail adjusted net income of C$1.46B rose from C$1.20B in the prior quarter and from C$1.30B a year ago. The company’s investment in Charles Schwab (NYSE:SCHW) contributed C$289M to earnings, up 47% from the year-ago quarter.

The U.S. Retail Bank, which excludes its investment in Schwab (SCHW), posted record adjusted net income of C$1.18B vs. C$974M in Q2 and C$1.10B in Q3 2021. The 7% Y/Y increase reflected higher deposit margins and volumes, partly offset by higher provision for credit losses, lower income from PPP, and higher employee-related expenses.

Wholesale Banking net income of C$271M vs. C$359M in Q2 and C$330M in Q3 2021. The 18% Y/Y decline reflected higher non-interest expenses and provision for credit losses. Even with market volatility and a weaker underwriting environment, revenue only fell 1% Y/Y, with the decreased activity partly offset by other parts of the business.

Conference call at 1:30 PM ET.

Earlier, TD Bank (TD) non-GAAP EPS of C$2.09 beats by C$0.05, revenue of C$11.6B beats by C$970M