- Key insight: At a fraught time for U.S.-Canadian relations, TD Bank Group reported 41% growth in its U.S. division's profits.
- Supporting data: The profits were driven partly by a 50% increase in U.S. fee income.
- Expert quote: "This quarter marked an important inflection point for our U.S. banking segment." —TD CEO Raymond Chun
Even as the United States and Canada trade tit-for-tat tariffs, one of Canada's top banks is thriving in America.
TD Bank Group, Canada's second-largest lender, handily beat Wall Street's expectations in the third quarter, thanks in no small part to the performance of its U.S. banking division. In the three months that ended July 31, the American unit achieved a net income of CAD $1.07 billion, a 41% jump over the same period last year.
"This quarter marked an important inflection point for our U.S. banking segment," CEO Raymond Chun said during the bank's earnings call on Thursday. "With a stronger foundation and best-in-class talent, we are increasingly positioned to outcompete in our footprint."
Overall, earnings per share for the Toronto-based bank were CAD $2.74, outdoing analysts' consensus estimate of CAD $2.43, according to S&P Capital IQ. Net income was CAD $4.61 billion, up 38% from the third quarter of 2025.
One particular highlight was the U.S. unit's fee income, which shot up 50% from a year earlier to CAD $814 million.
Leo Salom, CEO of TD Bank U.S., credited much of that growth to collaboration between TD's wholesale banking unit, which operates around the world, and the U.S. banking unit. This partnership, he said, gave commercial clients access to "broader" debt, equity, capital-markets and M&A-advisory services.
"I think we've just started to see the power of that model," Salom said. "I'm incredibly encouraged about what that's going to mean in 2027 and beyond."
The CAD $2.1 trillion-asset bank also reiterated a pledge, first announced at last year's investor day, to open 100 new branches in the U.S. by the end of 2028.
"This is an exciting move forward," Salom said. "It reflects the fact that we've made significant investments, and we're now in a position to be able to invest back into our respective communities."
For a Canadian bank, it's perhaps a surprising time to celebrate news from south of the border. Over the past week, the U.S. has imposed a new wave of massive tariffs on Canadian goods, reigniting a trade war between the two nations.
"The developments over the past few days have added significant uncertainty to the Canada-U.S. trade relationship," Chun said at the start of Thursday's call. "Our economies are interconnected, and we are hopeful the two countries will ultimately find common ground."
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Added to this, TD's U.S. businesses are still operating within strict limits. American regulators imposed a USD $434 billion
On Thursday, Salom said that asset cap is not slowing TD down, even as the bank continues to work "comprehensively and urgently" on its anti-money-laundering remediation program.
"We have made significant progress on that program," Salom said. "And as a result, in discussions with our regulators, etc., I feel quite comfortable to be able to announce today that we'll be opening up those 100 stores."
John Aiken, an analyst for Jefferies, called TD's results "remarkable" and agreed that the bank still has room to grow in the U.S.
"TD produced an impressive quarter," Aiken wrote in a research note. "Upside remains available as it pursues its growth strategy in its U.S. retail platform."
