Toronto-Dominion Bank is making the most of rising interest rates, with widening lending margins lifting results.

Net interest margin -- the difference between what the bank earns on loans and what it pays for deposits -- expanded to 1.81 per cent in the fiscal fourth quarter, up 7 basis points from the previous three months, the Toronto-based company said Thursday. Overall profit topped analysts’ estimates for the three months through October.

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Toronto-Dominion’s large base of low-cost customer deposits is providing the bank with cheap funding at the same time that rising interest rates are letting it charge more for loans. The trend lifted net interest income 22 per cent to $7.63 billion last quarter, with future rate increases poised to keep fueling earnings.

“With continued rate hikes expected, net interest margin should continue to trend up in the near term, and Toronto-Dominion should benefit more than peers,” Paul Holden, an analyst at Canadian Imperial Bank of Commerce, said in a note to clients before the results were released.

Toronto-Dominion shares have fallen 7.7 per cent this year, compared with a 7.5 per cent drop for the S&P/TSX Commercial Banks Index.

Also in the results: 

• Net income rose 76 per cent to $6.67 billion, or $3.62 a share.
• Excluding some items, profit was $2.18 a share. Analysts estimated $2.06, on average.
• Toronto-Dominion set aside $617 million in provisions for credit losses. Analysts projected $503.8 million.