TD credits U.S. operations for driving profit gains in 4Q

Register now

Toronto-Dominion Bank’s U.S. consumer-banking business is outshining its Canadian operations.

Toronto-Dominion on Thursday reported a 44% jump in earnings from the U.S. retail segment in the fiscal fourth quarter compared with a year earlier, helped by improving net interest margins, record contributions from a stake in the TD Ameritrade discount brokerage and the U.S. tax overhaul. Profit from U.S. retail rose to C$1.11 billion ($840 million in U.S. dollars) outperforming growth in Canada and its wholesale banking division, the Toronto-based lender said Thursday in a statement.

Despite its roots, Toronto-Dominion has more branches in the U.S. than in Canada. Its U.S. lender, TD Bank, had 1,257 locations in a network stretching from Maine to Florida, compared with 1,098 branches in its domestic market at the end of October.

About 20% of U.S. retail earnings in the quarter came from its 41% stake in Omaha, Neb.-based TD Ameritrade. The firm’s contribution of C$228 million was the most since the Canadian lender sold its U.S. brokerage to Ameritrade Holding12 years ago, taking a stake in the combined company.

Toronto-Dominion is the best performing bank stock among Canada’s largest lenders, with shares little changed for the year to Wednesday’s close. The stock has outperformed the 4.4% decline of Canada’s eight-company S&P/TSX Commercial Banks Index.

Net income for the quarter ended Oct. 31 rose 9.1% to C$2.96 billion ($2.23 billion), or C$1.58 a share. Adjusted earnings were C$1.63 a share, beating the C$1.60-a-share average estimate of 14 analysts surveyed by Bloomberg.

Toronto-Dominion saw gains in all of its three main business lines, and the wholesale business that includes TD Securities posted a 24% jump in profit to C$286 million.

Bloomberg News