Toronto-Dominion Bank's third-quarter earnings may have fallen from year-earlier levels, hurt by tough market conditions, but a strong performance from its retail businesses prompted an increase in the bank's quarterly dividend.

The Canadian chartered bank, Canada's second biggest, boosted its quarterly dividend to 61 Canadian cents a share from 59 Canadian cents.

Toronto-Dominion earned C$997 million or C$1.21 a share in its latest quarter, down from C$1.1 billion or C$1.51 a year earlier. Results in the latest quarter were reduced by restructuring and integration charges of C$15 million or 2 Canadian cents a share related to the acquisition of U.S. retail bank Commerce Bancorp Inc. and a tax provision related to the purchase of C$14 million or 2 Canadian cents a share.

Toronto-Dominion purchased Commerce Bancorp at the end of March for about C$7.1 billion to double its U.S. consumer-banking presence.

Adjusted earnings, a non-GAAP measure, fell to C$1.35 a share from C$1.60 a year earlier.

Bank analysts on average had expected Toronto-Dominion to earn C$1.45 a share in its latest quarter.

The Toronto bank's provision for credit losses rose to C$288 million from C$171 million. Analysts had been expected loan-loss provisions of C$270 million. Return on equity - an important profitability measure - fell to 13.4% from 21.0% a year earlier.

In general, Canadian banks were expected to post lower third-quarter earnings and higher loan-loss provisions as they continued to grapple with U.S. housing-market woes and a slowing economy. Earlier this week, each of Bank of Montreal, Bank of Nova Scotia and Canadian Imperial Bank of Commerce did just that. Royal Bank of Canada also reported lower earnings earlier Thursday. Bucking the trend, National Bank of Canada posted stronger third-quarter earnings compared with a year earlier.

Canadian banks have announced about C$10 billion in writedowns for bad debt since the beginning of 2007. Toronto-Dominion is the only large Canadian bank to have avoided debt writedowns.

In its latest quarter, the bank's TD Canada Trust posted record earnings of C$644 million, with most Canadian Personal and Commercial Banking operations posting strong volume growth. The bank said its retail businesses in both Canada and the U.S. produced more than 90% of its earnings this quarter.

Wholesale banking earnings were C$37 million, reflecting the previously announced C$96 million charge for rogue-trading losses. Wealth Management earnings rose 9%.

Shares of Toronto-Dominion closed trading Wednesday at C$59.34, up 1.8%.

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