TORONTO -- TD Bank posted a more than 17 per cent increase in net income in the second quarter compared with a year earlier, blowing past market expectations.

The Toronto-based lender reported Thursday net income attributable to common shareholders of $2.85 billion or $1.54 per diluted share for the quarter ended April 30, up from $2.43 billion or $1.31 per diluted share in the same period a year earlier.

On an adjusted basis, TD Bank said it earned $1.62 per diluted share for the period, compared with $1.34 a year earlier.

Analysts had expected a profit attributable to shareholders of $1.50 per share, according to Thomson Reuters Eikon.

The bank's Canadian retail division's net income totalled $1.83 billion, up 17 per cent compared with last year.

TD Bank said the improvement was due to higher margins, good volume growth and strong credit performance, as well as increased trading volumes and assets under management in its wealth businesses.

TD's U.S. retail arm saw net income rise 16 per cent to $979 million.

Wholesale banking net income totalled $267 million, up eight per cent compared with the same quarter last year, boosted by stronger revenue growth and partially offset by a higher provision for credit losses.

TD Bank chief executive Bharat Masrani said the lender delivered strong earnings across its divisions.

"At the half-year mark, we are extremely pleased with the earnings growth in all of our business segments, on both sides of the border," he said in a statement.

Total provisions for credit losses, the money set aside for bad loans, totalled $556 million for the quarter, up from $500 million in the same quarter last year.

TD's common equity tier 1 capital ratio, a key measure of the bank's financial health, was 11.8 per cent for the quarter, up from 10.8 per cent a year ago.