Canadian lender Toronto-Dominion Bank or TD Bank Group (TD,TD.TO) reported Thursday a profit for the first quarter that increased from last year, reflecting smaller provision for credit losses, lower expenses and revenue growth. Adjusted earnings per share topped analysts' expectations, while quarterly revenues missed their estimates.
"This was a very strong start to the year. Adjusted earnings for the quarter were $1.9 billion, up 9% from a year ago, demonstrating the earnings power of our franchise-driven model. The results exceeded our expectations and were particularly impressive when you consider the challenging operating and economic environment," President and CEO Ed Clark said.
The Toronto-based sixth largest bank in North America reported net income of C$1.79 billion or C$1.86 per share for the first quarter, higher than C$1.48 billion or C$1.55 billion in the prior-year quarter.
Excluding items, adjusted net income for the quarter was C$1.92 billion or C$2.00 per share, compared to C$1.76 billion or C$1.86 per share in the year-ago quarter.
On average, 15 analysts polled by Thomson Reuters expected the company to report earnings of C$1.92 per share for the quarter. Analysts' estimates typically exclude one-time items.
Revenue for the quarter increased to C$5.97 billion from C$5.64 billion in the same quarter last year, but missed nine Wall Street analysts' consensus estimate of C$6.01 billion.
Net interest income for the quarter grew to C$3.85 billion from C$3.69 billion in the year-ago quarter, and non-interest income totaled C$2.13 billion, up from C$1.96 billion in the prior-year quarter.
Provision for credit losses declined to C$385 million from last year to C$404 million. Non-interest expenses also decreased to C$3.50 billion from C$3.55 billion last year.
In Canadian Personal and Commercial Banking, net income increased 11 percent to C$920 million and revenue grew 6 percent to C$2.72 billion. Wealth and Insurance net income grew 8 percent to C$377 million, and revenue increased 8 percent to C$1.08 billion from last year.
U.S. Personal and Commercial Banking net income surged 83 percent to C$315 million and revenue grew 5 percent to $1.54 billion. Wholesale Banking net income decreased 18 percent to C$159 million, and revenue declined 12 percent from last year to C$599 million.
The company noted that its Common Equity Tier 1 ratio on a Basel III "all-in" basis was 8.8 percent.
TD Bank's board of directors declared a 4 percent increase in dividend to C$0.81 for the quarter ending April 30, 2013, payable on and after April 30 to shareholders of record at the close of business on April 3, 2013.
"Overall we were very pleased with our strong start to 2013, and we're encouraged by signs of improvement in the global economy. However, we remain cautious as slowing growth and the low interest rate environment impact our businesses. We will continue to strategically invest in our businesses while prudently managing our expense growth," Clark added.
TD closed Wednesday's regular trading session at $82.34, up $0.46 on a volume of 0.49 million shares. In the past 52-week period, the stock has been trading in a range of $72.63 to $86.56. TD.TO closed on the TSX at C$84.29, up C$0.28 on a volume of 0.93 million shares.
by RTT Staff Writer
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