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Noah Zivitz

Managing Editor, BNN Bloomberg

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Toronto-Dominion Bank closed out earnings season for Canada’s Big Six lenders on Thursday on the same note as its rivals: a big profit beat driven in part by spectacular growth in capital markets and far less cash set aside for loans that could go bad.

TD’s net income for the three months ending Oct. 31 totalled $5.1 billion, compared to $2.9 billion a year earlier, amid a $2.3-billion gain stemming from the stake it held in TD Ameritrade prior to the brokerage’s takeover by The Charles Schwab Corp.

On an adjusted basis, TD earned $1.60 per share in the fiscal fourth quarter. Analysts were expecting $1.27 in adjusted profit.

The bank booked $917 million in provisions for credit loss in the quarter, compared to $2.2 billion in the previous quarter and $3.2 billion in the fiscal second quarter.



“TD delivered solid results in the fourth quarter, capping off a year that demonstrated the strength of our business model and balance sheet, and the resilience of our people throughout the unprecedented COVID-19 pandemic,” said TD CEO Bharat Masrani in a release.

“While 2020 was not the year we expected it to be, we learned from the experience and demonstrated the speed and agility of our organization,” he added. “We will continue to adapt to the current environment to deliver for all of our stakeholders and support an inclusive and sustainable recovery.”

TD’s capital markets operations saw profit more than triple from a year earlier as net income reached $486 million in the final quarter of 2020.  The bank attributed the growth to higher revenue from trading activities as well as a jump in debt underwriting fees. The profit growth for the division stands in stark contrast to its condition less than two years ago when it posted a surprise loss in the first quarter of 2019.

The bank’s bread-and-butter retail operations in Canada were a pillar of strength in the fiscal fourth quarter as profit rose three per cent year-over-year to $1.8 billion.

TD’s operations south of the border struggled in the quarter, as profit from U.S. retail banking slid 41 per cent year-over-year to US$403 million. The decline came amid an uptick in provisions for credit losses and as income from fees and lending margins came under pressure.

Programming note: Don’t miss BNN Bloomberg’s conversation with TD CEO Bharat Masrani Friday, Dec. 4 at 2 p.m. ET / 11 a.m. PT.

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