We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Toronto-Dominion (TD) Stock Up 4.6% on Impressive Q4 Earnings
Read MoreHide Full Article
Shares of Toronto-Dominion Bank (TD - Free Report) have rallied 4.6% since the release of its fourth-quarter fiscal 2021 (ended Oct 31) results last week. Adjusted net income of C$3.87 billion ($3.3 billion) increased 30.2% from the prior-year quarter.
Results were aided by a rise in revenues and higher loan balance. Toronto-Dominion also recorded a recovery of credit losses during the quarter. However, higher expenses posed an undermining factor.
After considering non-recurring items, net income was C$3.78 billion ($3.23 billion), plunging 26.4% year over year.
Adjusted Revenues & Expenses Rise
Toronto-Dominion’s total revenues were C$10.94 billion ($9.34 billion), rising 5% on a year-over-year basis.
NII increased 3.9% year over year to C$6.26 billion ($5.34 billion). However, non-interest income was C$4.68 billion ($4 billion), which declined 19.6%.
Non-interest expenses increased 4.5% to C$5.90 billion ($5.04 billion).
Efficiency ratio was 53.9% as of Oct 31, 2021, down from 54.2% on Jul 31, 2020. A fall in the efficiency ratio indicates an improvement in profitability.
In the quarter, Toronto-Dominion recorded a recovery of credit losses of C$123 million ($105 million) against a provision of C$917 million in the year-ago quarter.
Balance Sheet Strong, Capital & Profitability Ratios Improve
Total assets were C$1.73 trillion ($1.5 trillion) as of Oct 31, 2021, up 1.5% from the end of the third quarter of fiscal 2021. Net loans rose marginally on a sequential basis to C$722.6 billion ($624.9 billion) and deposits grew slightly to C$1.13 trillion ($0.98 trillion).
As of Oct 31, 2021, common equity Tier I capital ratio was 15.2%, up from 13.1% on Oct 31, 2020. Total capital ratio was 19.1% compared with the prior year’s 16.7%.
Toronto-Dominion’s return on common equity (on an adjusted basis) was 16.1%, up from 13.3% as of Oct 31, 2020.
Capital Deployments
Concurrent with the earnings release, Toronto-Dominion announced a 13% quarterly dividend hike. Also, the company authorized 50 million shares under its share repurchase program.
Our View
Supported by a diverse geographical presence, Toronto-Dominion’s efforts toward improving revenues — both organically and inorganically — seem decent. However, rising expenses might hurt the company’s profitability to some extent.
Toronto Dominion Bank The Price, Consensus and EPS Surprise
The Bank of Nova Scotia (BNS - Free Report) reported fourth-quarter fiscal 2021 (ended Oct 31) adjusted net income of C$2.72 billion ($2.16 billion), which rose 40.1% year over year. Results excluded certain one-time items.
A drastic decline in provisions and higher non-interest income primarily drove Bank of Nova Scotia’s results. The balance sheet position also remained strong. However, a decline in net interest income and higher expenses were headwinds.
Bank of Montreal’s (BMO - Free Report) fourth-quarter fiscal 2021 (ended Oct 31) adjusted net income of C$2.23 billion ($1.9 billion) increased 38% year over year.
Bank of Montreal recorded higher revenues and provision benefits, which supported results. Also, loans and deposit balance improved. However, the increase in expenses was a headwind.
Barclays (BCS - Free Report) reported third-quarter 2021 net income attributable to ordinary equity holders of £1.45 billion ($2 billion), up significantly from the prior-year quarter.
Barclays’ results were aided by a rise in revenues, partly offset by higher operating expenses. Also, BCS recorded a decline in credit impairment charges during the quarter.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Toronto-Dominion (TD) Stock Up 4.6% on Impressive Q4 Earnings
Shares of Toronto-Dominion Bank (TD - Free Report) have rallied 4.6% since the release of its fourth-quarter fiscal 2021 (ended Oct 31) results last week. Adjusted net income of C$3.87 billion ($3.3 billion) increased 30.2% from the prior-year quarter.
Results were aided by a rise in revenues and higher loan balance. Toronto-Dominion also recorded a recovery of credit losses during the quarter. However, higher expenses posed an undermining factor.
After considering non-recurring items, net income was C$3.78 billion ($3.23 billion), plunging 26.4% year over year.
Adjusted Revenues & Expenses Rise
Toronto-Dominion’s total revenues were C$10.94 billion ($9.34 billion), rising 5% on a year-over-year basis.
NII increased 3.9% year over year to C$6.26 billion ($5.34 billion). However, non-interest income was C$4.68 billion ($4 billion), which declined 19.6%.
Non-interest expenses increased 4.5% to C$5.90 billion ($5.04 billion).
Efficiency ratio was 53.9% as of Oct 31, 2021, down from 54.2% on Jul 31, 2020. A fall in the efficiency ratio indicates an improvement in profitability.
In the quarter, Toronto-Dominion recorded a recovery of credit losses of C$123 million ($105 million) against a provision of C$917 million in the year-ago quarter.
Balance Sheet Strong, Capital & Profitability Ratios Improve
Total assets were C$1.73 trillion ($1.5 trillion) as of Oct 31, 2021, up 1.5% from the end of the third quarter of fiscal 2021. Net loans rose marginally on a sequential basis to C$722.6 billion ($624.9 billion) and deposits grew slightly to C$1.13 trillion ($0.98 trillion).
As of Oct 31, 2021, common equity Tier I capital ratio was 15.2%, up from 13.1% on Oct 31, 2020. Total capital ratio was 19.1% compared with the prior year’s 16.7%.
Toronto-Dominion’s return on common equity (on an adjusted basis) was 16.1%, up from 13.3% as of Oct 31, 2020.
Capital Deployments
Concurrent with the earnings release, Toronto-Dominion announced a 13% quarterly dividend hike. Also, the company authorized 50 million shares under its share repurchase program.
Our View
Supported by a diverse geographical presence, Toronto-Dominion’s efforts toward improving revenues — both organically and inorganically — seem decent. However, rising expenses might hurt the company’s profitability to some extent.
Toronto Dominion Bank The Price, Consensus and EPS Surprise
Toronto Dominion Bank The price-consensus-eps-surprise-chart | Toronto Dominion Bank The Quote
Toronto-Dominion currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Competitive Landscape
The Bank of Nova Scotia (BNS - Free Report) reported fourth-quarter fiscal 2021 (ended Oct 31) adjusted net income of C$2.72 billion ($2.16 billion), which rose 40.1% year over year. Results excluded certain one-time items.
A drastic decline in provisions and higher non-interest income primarily drove Bank of Nova Scotia’s results. The balance sheet position also remained strong. However, a decline in net interest income and higher expenses were headwinds.
Bank of Montreal’s (BMO - Free Report) fourth-quarter fiscal 2021 (ended Oct 31) adjusted net income of C$2.23 billion ($1.9 billion) increased 38% year over year.
Bank of Montreal recorded higher revenues and provision benefits, which supported results. Also, loans and deposit balance improved. However, the increase in expenses was a headwind.
Barclays (BCS - Free Report) reported third-quarter 2021 net income attributable to ordinary equity holders of £1.45 billion ($2 billion), up significantly from the prior-year quarter.
Barclays’ results were aided by a rise in revenues, partly offset by higher operating expenses. Also, BCS recorded a decline in credit impairment charges during the quarter.