Toronto-Dominion Bank has surpassed analysts' expectations for its second-quarter earnings, driven by higher profits across all business segments. The bank reported net income of $4.3 billion for the three months ending April 30, a decrease from $11.1 billion in the same period last year, resulting in net earnings per share of $2.43.
Adjusted Earnings Beat Estimates
On an adjusted basis, which excludes non-recurring items, net income rose 15% year over year to $4.2 billion, with adjusted earnings per share of $2.38. This figure exceeded analysts' consensus estimate of approximately $2.26 per share.
“This was another strong quarter,” said Raymond Chun, chief executive of TD, in a statement. “We drove record second-quarter earnings in Canadian personal and commercial banking, all-time-high earnings in wealth management and insurance and wholesale banking, and we accelerated momentum in U.S. banking.”
Dividend Increase
TD also announced a dividend increase of four cents, bringing the quarterly dividend to $1.12 per share, payable on July 31.
Economic Context and Credit Provisions
The Big Six banks' earnings often provide insights into the Canadian economy, which has faced increased strain due to the Iran conflict driving up energy prices and adding economic uncertainty. Analysts note that ongoing uncertainty will likely compel banks to maintain higher provisions for potential loan losses, a shift from earlier expectations of gradual improvement in provisions for credit losses (PCLs) in the second half of 2026.
TD's total PCLs decreased to approximately $1 billion in the second quarter, down from $1.03 billion in the previous quarter and $1.34 billion a year ago.
Segment Performance
Canadian personal and commercial banking net income rose 15% year over year to $1.9 billion, driven by higher revenue and lower PCLs. Wholesale banking net income increased 38% on an adjusted basis to $612 million, also due to higher revenues and lower PCLs. U.S. banking net income surged to $813 million, up $771 million from last year, reflecting the impact of balance sheet restructuring activities in the United States. Wealth management and insurance net income climbed 18% to $837 million.
