The Toronto-Dominion Bank’s (TD - Free Report) second-quarter fiscal 2018 (ended Apr 30) adjusted earnings were C$1.62 per share, up 21% year over year. Also, adjusted net income rose 20% year over year to C$3.1 billion ($2.4 billion).
Improvement in revenues was partially offset by higher provisions and a modest rise in operating expenses. Also, growth in capital and profitability ratios, as well as loan and deposit growth remained impressive.
After considering certain non-recurring items, net income was C$2.9 billion ($2.3 billion), up 17% from the prior-year quarter.
Revenues, Provisions & Expenses Increase
Total revenues (on an adjusted basis) came in at C$9.5 billion ($7.4 billion), up 12% year over year. The rise was attributable to growth in net interest income, as well as non-interest income.
Adjusted net interest income grew 7% year over year to C$5.4 billion ($4.2 billion). Also, adjusted non-interest income came in at C$4.1 billion ($3.2 billion), jumping 21% from the year-ago quarter.
Adjusted non-interest expenses flared up marginally year over year to C$4.7 billion ($3.7 billion).
Adjusted efficiency ratio was 50.1% at the quarter end, down from 55.8% as of Apr 30, 2017. A decline in efficiency ratio indicates an improvement in profitability.
Total provision for credit losses increased 11% year over year to C$556 million ($436 million).
Strong Balance Sheet
Total assets came in at C$1.28 trillion ($1 trillion) as of Apr 30, 2018, up 2% from the prior quarter. Net loans grew 2% sequentially to C$622 billion ($484.7 billion), while deposits rose 2% to C$829.8 billion ($646.6 billion).
Profitability and Capital Ratios Improve
Return on common equity, on an adjusted basis, came in at 17.6%, up from 14.8% as of Apr 30, 2017.
As of Apr 30, 2018, common equity Tier I capital ratio was 11.8%, up from 10.8% in the prior-year quarter. Total capital ratio came in at 15.8% for the reported quarter, up from 14.9% as of Apr 30, 2017.
Our Viewpoint
TD Bank’s efforts toward improving revenues, both organically and inorganically, are supported by its strong capital position. Though elevated level of provisions remains a concern, the export-driven economy of Canada is likely to benefit from gradual recovery of the U.S. economy. This, in turn, might aid the Zacks Rank #3 (Hold) company’s growth over the long run.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Foreign Banks
Canadian Imperial Bank of Commerce’s (CM - Free Report) second-quarter fiscal 2018 (ended Apr 30) adjusted earnings per share came in at C$2.95, increasing from C$2.64 in the prior-year quarter.
Barclays (BCS - Free Report) incurred first-quarter 2018 net loss attributable to ordinary equity holders of £764 million ($1.06 billion). Net income attributable to ordinary equity holders was £190 million ($248 million) in the year-earlier quarter.
HSBC Holdings (HSBC - Free Report) recorded first-quarter 2018 pre-tax profit of $4.8 billion, down 4% year over year. Further, net income attributable to shareholders of $3.1 billion reflects 1% fall from the year-ago quarter.
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The Toronto-Dominion Bank’s (TD - Free Report) second-quarter fiscal 2018 (ended Apr 30) adjusted earnings were C$1.62 per share, up 21% year over year. Also, adjusted net income rose 20% year over year to C$3.1 billion ($2.4 billion).
Improvement in revenues was partially offset by higher provisions and a modest rise in operating expenses. Also, growth in capital and profitability ratios, as well as loan and deposit growth remained impressive.
After considering certain non-recurring items, net income was C$2.9 billion ($2.3 billion), up 17% from the prior-year quarter.
Revenues, Provisions & Expenses Increase
Total revenues (on an adjusted basis) came in at C$9.5 billion ($7.4 billion), up 12% year over year. The rise was attributable to growth in net interest income, as well as non-interest income.
Adjusted net interest income grew 7% year over year to C$5.4 billion ($4.2 billion). Also, adjusted non-interest income came in at C$4.1 billion ($3.2 billion), jumping 21% from the year-ago quarter.
Adjusted non-interest expenses flared up marginally year over year to C$4.7 billion ($3.7 billion).
Adjusted efficiency ratio was 50.1% at the quarter end, down from 55.8% as of Apr 30, 2017. A decline in efficiency ratio indicates an improvement in profitability.
Total provision for credit losses increased 11% year over year to C$556 million ($436 million).
Strong Balance Sheet
Total assets came in at C$1.28 trillion ($1 trillion) as of Apr 30, 2018, up 2% from the prior quarter. Net loans grew 2% sequentially to C$622 billion ($484.7 billion), while deposits rose 2% to C$829.8 billion ($646.6 billion).
Profitability and Capital Ratios Improve
Return on common equity, on an adjusted basis, came in at 17.6%, up from 14.8% as of Apr 30, 2017.
As of Apr 30, 2018, common equity Tier I capital ratio was 11.8%, up from 10.8% in the prior-year quarter. Total capital ratio came in at 15.8% for the reported quarter, up from 14.9% as of Apr 30, 2017.
Our Viewpoint
TD Bank’s efforts toward improving revenues, both organically and inorganically, are supported by its strong capital position. Though elevated level of provisions remains a concern, the export-driven economy of Canada is likely to benefit from gradual recovery of the U.S. economy. This, in turn, might aid the Zacks Rank #3 (Hold) company’s growth over the long run.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Foreign Banks
Canadian Imperial Bank of Commerce’s (CM - Free Report) second-quarter fiscal 2018 (ended Apr 30) adjusted earnings per share came in at C$2.95, increasing from C$2.64 in the prior-year quarter.
Barclays (BCS - Free Report) incurred first-quarter 2018 net loss attributable to ordinary equity holders of £764 million ($1.06 billion). Net income attributable to ordinary equity holders was £190 million ($248 million) in the year-earlier quarter.
HSBC Holdings (HSBC - Free Report) recorded first-quarter 2018 pre-tax profit of $4.8 billion, down 4% year over year. Further, net income attributable to shareholders of $3.1 billion reflects 1% fall from the year-ago quarter.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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