Toronto-Dominion Bank, the first Canadian lender to report second-quarter results, said profit rose 1.8% on record earnings from U.S. consumer lending.
Net income for the period ended April 30 climbed to C$1.72 billion ($1.66 billion), or C$1.78 a share, from C$1.69 billion, or C$1.78, a year earlier, the Toronto-based bank said today in a statement. Revenue rose 4.3% to C$6 billion.
Toronto-Dominion said U.S. consumer banking profit jumped 12% as lending growth south of the border tops domestic gains. Toronto-Dominion now has more bank branches in the U.S. than in Canada. Earnings from investment banking also rose, boosted by trading.
"We've had consistently strong volume growth in the United States and for some time now the U.S. has outpaced Canada," Chief Financial Officer Colleen Johnston said. "We're seeing fundamentals strengthen in the United States versus our expectations."
Adjusted earnings, which exclude some items, were C$1.90 a share, missing the C$1.91 average estimate of 13 analysts surveyed by Bloomberg.
"A solid quarter, but little to get excited about in terms of a step up in valuation or drastically improved outlook," Barclays Plc analyst John Aiken said today in a note.
Toronto-Dominion, Canada's second-largest lender by assets, was unchanged yesterday at C$84.04 in Toronto trading. The shares advanced 0.4% this year, trailing the 2.8% gain of the eight-company Standard & Poor's/TSX Banks Index.
Toronto-Dominion said it plans to buy back as many as 12 million shares, or 1.3% of its outstanding stock, starting in June. It's the first buyback for the bank in almost seven years.
"We have not had a buyback in the market for many years," Johnston said in a telephone interview. "We're now in the position where we can start thinking about capital deployment."
Toronto-Dominion set aside C$417 million for bad loans, up from C$388 million a year earlier.
U.S. consumer banking earnings jumped to C$398 million, while domestic banking profit rose 4.8% to C$847 million, Toronto-Dominion said. Wholesale banking rose 12% to C$220 million. Profit from wealth management and insurance was C$364 million, compared with C$365 million in the year-earlier period.
Toronto-Dominion still expects Canadian personal and commercial banking earnings to grow 7% to 10% this year, even with slowing loan growth and low interest rates, Johnston said.
The eight biggest Canadian banks are expected to report a 7% increase in adjusted per-share earnings for the quarter from a year earlier, Sumit Malhotra, an analyst with Macquarie Capital Markets in Toronto, said in a May 21 note.
National Bank of Canada reports results tomorrow, followed by Bank of Nova Scotia on May 28 and Bank of Montreal on May 29. Royal Bank of Canada, the country's largest lender, and Canadian Imperial Bank of Commerce, the fifth-biggest, report on May 30.
