TD Bank Profit Dips as Bad Loan Provisions Rise
()- TD Bank announced a decline in its second-quarter profits on Thursday, with the Canadian financial institution setting aside funds to prepare for possible future loan defaults amid an unstable economic climate.
The findings from the nation’s second-largest bank provide insight into how the turmoil surrounding tariffs is affecting the Canadian economy. Uncertainty in trade is anticipated to lead to increased credit losses and slower loan growth due to diminished optimism resulting from the shifting economic landscape.
During the second quarter, TD saw an increase in their provisions for credit losses, which rose to C$1.34 billion ($965.5 million) compared to C$1.07 billion during the same period last year.
“TD reported impressive figures for this quarter, driven by solid trading and fee income from our market-focused divisions along with an increase in deposits and loans within Canadian Personal and Commercial Banking,” stated CEO Raymond Chun.
“We’re functioning within a rapidly changing broader economic landscape,” Chun stated.
TD is currently engaged in an extensive strategic review as the new leadership seeks to streamline operations and revitalize the bank following its issues with money-laundering compliance. Chun, who has been with TD Bank for many years, assumed the top position in February.
In the meantime, TD’s wholesale banking division—which includes its capital markets and investment banking operations—posted record revenues of $2.13 billion CAD, marking a 10% increase compared to the previous year.
The uncertainty caused by U.S. trade policies led to increased market volatility, prompting higher trading activities as investors actively adjusted their investment portfolios.
In the quarter’s transactions, TD Securities took the role of lead left bookrunner for the $13.1 billion secondary offering of Charles Schwab shares by TD, making it one of the biggest equity market deals in history.
TD begins the earning season for Canadian lenders, followed by reports from competing major banks scheduled for next week.
The bank reported an adjusted net income of C$3.63 billion, equivalent to C$1.97 per share, for the quarter ending April 30, as opposed to C$3.79 billion, or C$2.04 per share, during the same period the previous year.
This year, TD shares have increased by 17.5%, surpassing those of competing banks.
($1 = 1.3878 CAD)
(Reported by Arasu Kannagi Basil in Bengaluru; Edited by Shailesh Kuber)