Mr. Ed Clark reports
TD BANK GROUP REPORTS THIRD QUARTER 2014 RESULTS
Toronto-Dominion Bank has released its financial results for the third quarter ended July 31,
2014. Adjusted earnings were $2.2-billion, a 37-per-cent increase from the
third quarter last year, reflecting strong earnings contributions from
all business segments. Results from the third quarter in 2013 included
additional charges taken in the insurance business.
Third-quarter financial highlights, compared with the third quarter a
year ago:
- Reported diluted earnings per share were $1.11, compared with 79 cents.
- Adjusted diluted earnings per share were $1.15, compared with 82 cents.
- Reported net income was $2,107-million, compared with $1,523-million.
- Adjusted net income was $2,167-million, compared with $1,584-million.
Year-to-date financial highlights, nine months ended July 31, 2014,
compared with the corresponding period a year ago:
- Reported diluted earnings per share were $3.22, compared with $2.61.
- Adjusted diluted earnings per share were $3.29, compared with $2.77.
- Reported net income was $6,137-million, compared with $5,024-million.
- Adjusted net income was $6,265-million, compared with $5,321-million.
Third-quarter adjustments (items of note)
The third-quarter reported earnings figures included the following items
of note:
- Amortization of intangibles of $60-million after tax (three cents per
share), compared with $59-million after tax (three cents per share) in the
third quarter last year;
- Integration charges of $27-million after tax (two cents per share)
relating to the acquisition of the credit card portfolio of MBNA
Canada, compared with $24-million after tax (one cent per share) in the
third quarter last year;
- A release of $19-million after tax (one cent per share), due to the impact
of the Alberta flood on the loan portfolio, compared with a loss of $48-million after tax (three cents per share) in the third quarter last year;
- A gain of $24-million after tax (one cent per share), due to the change in
fair value of derivatives hedging the reclassified available-for-sale
securities portfolio, compared with a gain of $70-million after tax (four cents per share) in the third quarter last year;
- Set-up and conversion costs totalling $16-million after tax (one cent per
share) related to the affinity relationship with Aimia and the
acquisition of 50 per cent of CIBC's existing Aeroplan Visa credit card
accounts.
"TD's third quarter was especially strong, even after taking into
account the additional charges in our insurance business last year,"
said Ed Clark, group president and chief executive officer. "Our
performance was fuelled by good organic growth, support from recent
acquisitions and continued favourable credit conditions. We're very
pleased that we achieved these results, while at the same time
maintaining our investments in future growth."
Canadian retail
Canadian retail delivered net income of $1.4-billion for the third
quarter, representing a 54-per-cent increase in adjusted earnings over the same
quarter last year. This solid performance was driven by good loan and
deposit growth, good credit quality, Aeroplan contribution, higher
wealth assets, and very strong operating leverage. Insurance earnings
reflected a significant rebound from last year when the business was
affected by a combination of severe weather-related impacts and
increased general insurance claims.
"Canadian retail delivered a strong third quarter with all business
lines contributing," said Tim Hockey, group head, Canadian banking,
auto finance and wealth management. "We were once again recognized as
an industry leader in customer service and we will continue to focus on
increasing our market share, driving efficiency, and delivering
industry-leading comfort and convenience through strategic investments
in the business."
U.S. retail
U.S. retail generated net income of $518-million (U.S.), an increase of 4 per cent
compared with the third quarter last year. Excluding the bank's
investment in TD
Ameritrade, the segment generated net income of $449-million (U.S.), an
increase of 4 per cent. Earnings were driven by strong organic growth, expense
management, and improved asset quality, partially offset by lower gains
on sales of securities.
TD Ameritrade contributed $69-million (U.S.) in earnings to the segment, an
increase of 1 per cent compared with the third quarter last year.
"U.S. retail continued to deliver on our organic growth strategy," said
Mike Pedersen, group head, U.S. banking. "Customer acquisition and
deposit and lending growth were strong, with business lending
especially good in the third quarter. The U.S. banking environment
continues to face headwinds, but we remain focused on building the
franchise and delivering legendary customer experiences."
Wholesale banking
Wholesale banking net income for the quarter was $216-million, an
increase of 46 per cent compared with the third quarter last year. The increase
in earnings was primarily due to broad-based revenue growth across core
businesses and favourable credit quality, partially offset by higher
non-interest expenses.
"We are pleased with our earnings this quarter, which saw good
origination, robust capital markets, and trading activity," said Bob
Dorrance, group head, wholesale banking. "We will continue to attract
new clients and expand existing relationships, and manage risks and
expenses for the remainder of 2014."
Capital
TD's common equity Tier 1 capital ratio on a Basel III fully phased-in
basis was 9.3 per cent, compared with 9.2 per cent last quarter.
Conclusion
"These results exemplify the many strengths of TD: our franchise-driven
model, relentless focus on the customer and ability to grow our North
American platform," said Mr. Clark. "Our exceptional team remains committed
to making us the better bank for all of our stakeholders."
FINANCIAL HIGHLIGHTS
(millions of dollars, except per share amounts)
For the three months ended For the nine months ended
July 31, April 30, July 31, July 31, July 31,
2014 2014 2013 2014 2013
Results of operations
Total revenue $ 7,509 $ 7,435 $ 7,085 $ 22,509 $ 20,259
Provision for credit losses 338 392 477 1,186 1,279
Insurance claims and related expenses 771 659 1,140 2,113 2,345
Non-interest expenses 4,040 4,029 3,771 12,165 10,905
--------- --------- -------- ----------- ----------
Net income -- reported $ 2,107 $ 1,988 $ 1,523 $ 6,137 $ 5,024
========= ========= ======== =========== ==========
Net income -- adjusted 2,167 2,074 1,584 6,265 5,321
Common share information -- reported
Per share earnings
Basic $ 1.12 $ 1.05 $ 0.79 $ 3.23 $ 2.61
Diluted 1.11 1.04 0.79 3.22 2.61
Dividends per share 0.47 0.47 0.40 1.37 1.19
We seek Safe Harbor.
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