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Toronto-Dominion (TD) Q1 Earnings Decline as Expenses Rise Y/Y
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Toronto-Dominion Bank (TD - Free Report) reported first-quarter fiscal 2024 (ended Jan 31) results. Adjusted net income of C$3.64 billion ($2.69 billion) decreased 12.4% from the prior-year quarter.
Results were adversely impacted by higher expenses and a rise in provision for credit losses. Nonetheless, a rise in adjusted revenues and a strong balance sheet position acted as tailwinds.
Net income of C$2.82 billion ($2.09 billion) increased 78.6% year over year.
Adjusted Revenues & Expenses Rise
Adjusted revenues were C$13.77 billion ($10.2 billion), increasing 5.3% on a year-over-year basis.
Net interest income (NII) declined 3.2% year over year to C$7.49 billion ($5.54 billion). Non-interest income of C$6.23 billion ($4.61 billion) increased 39.3% year over year.
Adjusted non-interest expenses rose 12.4% year over year to C$7.13 billion ($5.28 billion).
The adjusted efficiency ratio was 57.4% as of Jan 31, 2024, up from the 53.2% recorded in the prior-year period.
In the reported quarter, Toronto-Dominion recorded a provision for credit losses of C$1 billion ($740.2 million), up 45.1% from the year-ago quarter.
Balance Sheet Robust
Total assets were C$1.91 trillion ($1.42 trillion) as of Jan 31, 2024, down 2.3% from the end of the fourth quarter of fiscal 2023.
Net loans rose 1% on a sequential basis to C$904.3 billion ($674.1 billion), and deposits declined 1.4% sequentially to C$1.18 trillion ($0.88 trillion).
Capital & Profitability Ratios Weaken
As of Jan 31, 2024, the common equity Tier I capital ratio was 13.9%, down from 15.5% as of Jan 31, 2023. The total capital ratio was 17.6% compared with the prior-year quarter's 19.9%.
Toronto-Dominion’s return on common equity (on an adjusted basis) was 14.1%, down from 16.1% a year ago.
Our Take
Supported by a diverse geographical presence, Toronto-Dominion’s efforts toward improving revenues and market share, both organically and inorganically, seem impressive. Also, high interest rates will support the company’s financials.
Toronto Dominion Bank (The) Price, Consensus and EPS Surprise
Bank of Montreal (BMO - Free Report) released its first-quarter fiscal 2024 (ended Jan 31) results. Adjusted earnings per share of C$2.56 declined 16.3% year over year.
A significant rise in provision for credit losses, along with higher adjusted expenses, primarily hurt the results of BMO. However, increases in NII and non-interest income were tailwinds.
Royal Bank of Canada’s (RY - Free Report) first-quarter fiscal 2024 (ended Jan 31) adjusted net income of C$4.06 billion ($3.01 billion) decreased 5% from the prior-year quarter.
RY’s results were adversely impacted by higher expenses and provisions. However, a rise in revenues and solid capital ratios acted as tailwinds.
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Toronto-Dominion (TD) Q1 Earnings Decline as Expenses Rise Y/Y
Toronto-Dominion Bank (TD - Free Report) reported first-quarter fiscal 2024 (ended Jan 31) results. Adjusted net income of C$3.64 billion ($2.69 billion) decreased 12.4% from the prior-year quarter.
Results were adversely impacted by higher expenses and a rise in provision for credit losses. Nonetheless, a rise in adjusted revenues and a strong balance sheet position acted as tailwinds.
Net income of C$2.82 billion ($2.09 billion) increased 78.6% year over year.
Adjusted Revenues & Expenses Rise
Adjusted revenues were C$13.77 billion ($10.2 billion), increasing 5.3% on a year-over-year basis.
Net interest income (NII) declined 3.2% year over year to C$7.49 billion ($5.54 billion). Non-interest income of C$6.23 billion ($4.61 billion) increased 39.3% year over year.
Adjusted non-interest expenses rose 12.4% year over year to C$7.13 billion ($5.28 billion).
The adjusted efficiency ratio was 57.4% as of Jan 31, 2024, up from the 53.2% recorded in the prior-year period.
In the reported quarter, Toronto-Dominion recorded a provision for credit losses of C$1 billion ($740.2 million), up 45.1% from the year-ago quarter.
Balance Sheet Robust
Total assets were C$1.91 trillion ($1.42 trillion) as of Jan 31, 2024, down 2.3% from the end of the fourth quarter of fiscal 2023.
Net loans rose 1% on a sequential basis to C$904.3 billion ($674.1 billion), and deposits declined 1.4% sequentially to C$1.18 trillion ($0.88 trillion).
Capital & Profitability Ratios Weaken
As of Jan 31, 2024, the common equity Tier I capital ratio was 13.9%, down from 15.5% as of Jan 31, 2023. The total capital ratio was 17.6% compared with the prior-year quarter's 19.9%.
Toronto-Dominion’s return on common equity (on an adjusted basis) was 14.1%, down from 16.1% a year ago.
Our Take
Supported by a diverse geographical presence, Toronto-Dominion’s efforts toward improving revenues and market share, both organically and inorganically, seem impressive. Also, high interest rates will support the company’s financials.
Toronto Dominion Bank (The) Price, Consensus and EPS Surprise
Toronto Dominion Bank (The) price-consensus-eps-surprise-chart | Toronto Dominion Bank (The) Quote
TD 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 Canadian Banks
Bank of Montreal (BMO - Free Report) released its first-quarter fiscal 2024 (ended Jan 31) results. Adjusted earnings per share of C$2.56 declined 16.3% year over year.
A significant rise in provision for credit losses, along with higher adjusted expenses, primarily hurt the results of BMO. However, increases in NII and non-interest income were tailwinds.
Royal Bank of Canada’s (RY - Free Report) first-quarter fiscal 2024 (ended Jan 31) adjusted net income of C$4.06 billion ($3.01 billion) decreased 5% from the prior-year quarter.
RY’s results were adversely impacted by higher expenses and provisions. However, a rise in revenues and solid capital ratios acted as tailwinds.