Toronto-Dominion Bank and Canadian Imperial Bank of Commerce are benefiting from their expanded U.S. presence, but that wasn’t enough to rescue either company’s bottom line last quarter.

Both Toronto-based banks reported fiscal fourth-quarter results that missed analysts’ estimates, hurt by rising provisions and profit declines in Canadian banking, the biggest division for both companies. Toronto-Dominion was also affected by $154 million in restructuring charges, with the majority to cover severance packages.

“We took some restructuring charges as we continue to accelerate our ongoing efforts to modernize our operations and improve our efficiency,” Toronto-Dominion Chief Financial Officer Riaz Ahmed said Thursday in a phone interview, declining to give a number for the job cuts. “Because it’s broadly distributed, it’s just a very small portion of our workforce.”

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The two banks join Royal Bank of Canada in posting quarterly results that failed to live up to analysts’ expectations. Bank of Montreal beat estimates earlier in the week, even after taking a restructuring charge for job cuts that will affect about five per cent of its workforce, or about 2,300 employees, while Montreal-based National Bank of Canada also topped expectations. Bank of Nova Scotia matched estimates when it reported its results last week.

Toronto-Dominion’s quarterly profit fell 3.5 per cent to $2.86 billion, with adjusted earnings of $1.59 a share missing the $1.73 average estimate of analysts surveyed by Bloomberg. Earnings from Canadian retail, which includes wealth management, were little changed, though profit in Canadian personal and commercial banking fell. The lender’s capital markets business also saw an earnings drop, due in part to changes to its trading capabilities that caused some derivative valuation charges in the quarter.

'Largest Miss'

“All segments came in below our forecast with the largest miss in Canadian retail banking,” RBC Capital Markets analyst Darko Mihelic said in a note to clients.

CIBC’s profit fell 5.9 per cent to $1.19 billion after taking a $135 million goodwill charge related to selling a stake in CIBC FirstCaribbean in November, and adjusted per-share earnings of $2.84 missed the $3.07 average analysts’ estimate. A 37 per cent jump in earnings from its U.S. commercial banking and wealth management was a bright spot in a quarter that saw profit declines in its Canadian businesses and capital markets.

Rising provisions were a theme across Canadian banks in the fourth quarter. Toronto-Dominion set aside $891 million in the quarter for soured loans, up 33 per cent from a year ago and its highest amount in at least two years, in what Ahmed described as the “effects of normalizing” provisions. CIBC’s provisions soared 52 per cent to $402 million, with part of the jump due to what it called a “notable impairment” in Canadian commercial banking and wealth.

“We are continuing to see a normalization from what has been cyclically very low provisions in the last two years,” Toronto-Dominion’s Ahmed said. “We just see it as individual business stories and not an overall trend in the economy.”