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TD Bank (TD) Q4 Earnings & Revenues Improve, Expenses Rise
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The Toronto-Dominion Bank’s (TD - Free Report) fourth-quarter fiscal 2018 (ended Oct 31) adjusted earnings came in at C$1.63 per share, up 20% year over year. Also, adjusted net income rose 17% from a year ago to C$3.05 billion ($2.34 billion).
The results depict an improvement in revenues, higher interest rates and growth in the bank’s U.S. retail business. Also, its strong capital and profitability ratios, as well as loan and deposit growth remained impressive during the quarter. Nonetheless, higher provisions and a rise in operating expenses were the offsetting factors.
Considering certain non-recurring items, net income was C$2.96 billion ($2.27 billion), up 9% from the prior-year quarter.
In fiscal 2018, adjusted earnings of C$6.47 per share grew 17% year over year. Further, net income (on a reported basis) increased 8% from a year ago to C$11.33 billion.
Revenues, Provisions & Expenses Rise
Total revenues (on an adjusted basis) came in at C$10.12 billion ($7.76 billion), up 12% year over year. The rise was attributable to growth in net interest income and non-interest income.
Adjusted net interest income grew 8% year over year to C$5.76 billion ($4.42 billion). Also, adjusted non-interest income came in at C$4.37 billion ($3.35 billion), increasing 11% from the year-ago quarter.
Adjusted non-interest expenses rose 11% year over year to C$5.35 billion ($4.10 billion).
Adjusted efficiency ratio was 52.4% at the quarter-end, up from 52.3% as of Oct 31, 2017. A rise in efficiency ratio indicates deterioration in profitability.
Total provision for credit losses increased 16% year over year to C$670 million ($514 million).
Strong Balance Sheet, Profitability and Capital Ratios
Total assets came in at C$1.33 trillion ($1 trillion) as of Oct 31, 2018, up 3% from the fiscal third quarter. Net loans grew 2% sequentially to C$646.4 billion ($491.2 billion) and deposits rose 2% to C$851.4 billion ($647 billion).
Return on common equity, on an adjusted basis, came in at 16.3%, up from 14.7% as of Oct 31, 2017.
As of Oct 31, 2018, common equity Tier I capital ratio was 12.0%, up from 10.7% in the prior-year quarter. Total capital ratio came in at 16.2% in the reported quarter, up from 14.9% as of Jul 31, 2017.
Our Viewpoint
TD Bank’s efforts toward improving revenues, both organically and inorganically, are supported by its strong capital position. Elevated level of provisions remains a concern. Further, ongoing global economic certainty and trade war-related concerns make us apprehensive.
Canadian Imperial Bank of Commerce Price, Consensus and EPS Surprise
UBS Group AG (UBS - Free Report) reported third-quarter 2018 net profit attributable to shareholders of CHF 1.2 billion ($1.2 billion), up around 31.7% from the prior-year quarter. The results display a rise in net fee and commission income, along with lower net interest income. Further, the company’s performance in the quarter reflects lower expenses.
Deutsche Bank AG (DB - Free Report) reported net income of €229 million ($267.4 million) in third-quarter 2018, which tanked 64.7% from the year-ago quarter. Income before taxes plunged 45.8% from a year ago to €506 million ($590.9 million). Lower revenues and higher expenses were the key undermining factors. However, strong capital position and lower provisions were the main positives.
Barclays (BCS - Free Report) reported third-quarter 2018 net income attributable to ordinary equity holders of £1 billion ($1.30 billion). The results were driven by improvement in trading activities and a decline in credit impairment charges. However, a fall in net interest income and higher expenses acted as headwinds.
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Image: Bigstock
TD Bank (TD) Q4 Earnings & Revenues Improve, Expenses Rise
The Toronto-Dominion Bank’s (TD - Free Report) fourth-quarter fiscal 2018 (ended Oct 31) adjusted earnings came in at C$1.63 per share, up 20% year over year. Also, adjusted net income rose 17% from a year ago to C$3.05 billion ($2.34 billion).
The results depict an improvement in revenues, higher interest rates and growth in the bank’s U.S. retail business. Also, its strong capital and profitability ratios, as well as loan and deposit growth remained impressive during the quarter. Nonetheless, higher provisions and a rise in operating expenses were the offsetting factors.
Considering certain non-recurring items, net income was C$2.96 billion ($2.27 billion), up 9% from the prior-year quarter.
In fiscal 2018, adjusted earnings of C$6.47 per share grew 17% year over year. Further, net income (on a reported basis) increased 8% from a year ago to C$11.33 billion.
Revenues, Provisions & Expenses Rise
Total revenues (on an adjusted basis) came in at C$10.12 billion ($7.76 billion), up 12% year over year. The rise was attributable to growth in net interest income and non-interest income.
Adjusted net interest income grew 8% year over year to C$5.76 billion ($4.42 billion). Also, adjusted non-interest income came in at C$4.37 billion ($3.35 billion), increasing 11% from the year-ago quarter.
Adjusted non-interest expenses rose 11% year over year to C$5.35 billion ($4.10 billion).
Adjusted efficiency ratio was 52.4% at the quarter-end, up from 52.3% as of Oct 31, 2017. A rise in efficiency ratio indicates deterioration in profitability.
Total provision for credit losses increased 16% year over year to C$670 million ($514 million).
Strong Balance Sheet, Profitability and Capital Ratios
Total assets came in at C$1.33 trillion ($1 trillion) as of Oct 31, 2018, up 3% from the fiscal third quarter. Net loans grew 2% sequentially to C$646.4 billion ($491.2 billion) and deposits rose 2% to C$851.4 billion ($647 billion).
Return on common equity, on an adjusted basis, came in at 16.3%, up from 14.7% as of Oct 31, 2017.
As of Oct 31, 2018, common equity Tier I capital ratio was 12.0%, up from 10.7% in the prior-year quarter. Total capital ratio came in at 16.2% in the reported quarter, up from 14.9% as of Jul 31, 2017.
Our Viewpoint
TD Bank’s efforts toward improving revenues, both organically and inorganically, are supported by its strong capital position. Elevated level of provisions remains a concern. Further, ongoing global economic certainty and trade war-related concerns make us apprehensive.
Canadian Imperial Bank of Commerce Price, Consensus and EPS Surprise
Canadian Imperial Bank of Commerce Price, Consensus and EPS Surprise | Canadian Imperial Bank of Commerce Quote
Zacks Rank
TD Bank currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Foreign Banks
UBS Group AG (UBS - Free Report) reported third-quarter 2018 net profit attributable to shareholders of CHF 1.2 billion ($1.2 billion), up around 31.7% from the prior-year quarter. The results display a rise in net fee and commission income, along with lower net interest income. Further, the company’s performance in the quarter reflects lower expenses.
Deutsche Bank AG (DB - Free Report) reported net income of €229 million ($267.4 million) in third-quarter 2018, which tanked 64.7% from the year-ago quarter. Income before taxes plunged 45.8% from a year ago to €506 million ($590.9 million). Lower revenues and higher expenses were the key undermining factors. However, strong capital position and lower provisions were the main positives.
Barclays (BCS - Free Report) reported third-quarter 2018 net income attributable to ordinary equity holders of £1 billion ($1.30 billion). The results were driven by improvement in trading activities and a decline in credit impairment charges. However, a fall in net interest income and higher expenses acted as headwinds.
3 Medical Stocks to Buy Now
The greatest discovery in this century of biology is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating revenue, and cures for a variety of deadly diseases are in the pipeline.
So are big potential profits for early investors. Zacks has released an updated Special Report that explains this breakthrough and names the best 3 stocks to ride it.
See them today for free >>