TD Bank Quarterly Earnings Lifted by Growth in Canada, Capital Markets Activity

By Robb M. Stewart

Toronto-Dominion Bank's earnings were up sharply in the latest quarter as the big lender continued to see strong growth in its Canadian banking and capital markets businesses, while also setting aside less money for soured loans.

TD, Canada's second-largest bank by market value, recorded net income of 4.62 billion Canadian dollars (US$3.33 billion), or C$2.74 a share, in the three months to July 31. That was up from C$3.34 billion, or C$1.89 a share, a year earlier.

Stripping out items the bank doesn't believe reflect the underlying performance of its business such as restructuring costs, third-quarter per-share earnings came in at C$2.77, beating the C$2.47 mean estimate of analysts polled by FactSet.

Overall revenue was 10% higher at C$16.89 billion, ahead of the roughly C$15 billion expected.

President and Chief Executive Raymond Chun said it was a strong quarter, with record earnings in the bank's Canadian and wholesale banking businesses and momentum in the U.S.

Return on equity, a closely watched measure of profitability and efficiency, widened to 15.8% for the latest quarter from 11.3% a year prior, and hit 16% on an adjusted basis.

"ROE was up significantly and we generated positive operating leverage while continuing to invest in front-line talent, AI and innovation," Chun said.

TD's provisions for credit losses fell to C$917 million, from C$1 billion the quarter prior and C$971 million the year before. Analysts were expecting almost C$1.1 billion in provisions. The provision for loans deemed impaired was C$865 million, a drop of about 4% year-over-year, thanks to lower provisions across the business and government lending portfolios. The provision for performing loans was C$52 million, a decrease of C$15 million compared with last year the bank said reflected credit migration and volume growth.

TD said its capital position remains strong. Its common equity Tier 1 capital ratio stood at 14.3% as of the end of July, steady compared with a quarter earlier though narrower than last year's 14.8%. Canada's banking regulator requires the big lenders to maintain a capital ratio of at least 11% of risk-weighted assets.

Write to Robb M. Stewart at robb.stewart@wsj.com

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August 27, 2026 07:28 ET (11:28 GMT)