Canadian lender TD Bank Group (TD) on Thursday reported a 2 percent increase in profit for the second quarter, reflecting loan and deposit growth at its U.S. as well as Canadian personal and commercial banking segments.
The company also recorded higher trading-related revenue in the quarter. The bank is the first among Canada's big banks to report earnings for the latest quarter.
Further, TD Bank said it plans to buy back up to 12 million of its common shares, representing about 1.3 percent of its total shares outstanding.
Ed Clark, president and chief executive officer of TD Bank said, "TD had a solid second quarter, delivering adjusted earnings of $1.8 billion, up 6% from a year ago. We feel positive about these results in the context of a challenging operating environment. We remain confident that our customer-focused, retail-driven business model will help us manage through a period of slower growth and low interest rates."
Canada's second-largest bank by assets said its second-quarter net income was C$1.65 billion, up from C$1.62 billion in the prior-year quarter. Meanwhile, earnings per share remained flat with last year at C$1.78.
The latest quarter's results include amortization of intangibles of C$0.06 per share, loss of C$0.03 per share due to the change in fair value of derivatives hedging as well as integration charges, and direct transaction costs of C$0.03 per share related to the acquisition of MBNA Canada.
Adjusted earnings for the quarter were C$1.76 billion or C$1.90 per share, compared to C$1.66 billion or C$1.82 per share in the year-ago period.
Total revenue for the quarter grew 4 percent to C$6.00 billion from C$5.75 billion in the same period last year.
Net interest income rose 6 percent from the year-ago period to C$3.90 billion, while non-interest income increased 1 percent to C$2.10 billion.
Meanwhile, provision for credit losses increased 7 percent to C$417 million from C$388 million in the same period last year.
In Canadian Personal and Commercial Banking, net income increased 5 percent to C$847 million on continued good loan and deposit growth, while revenue grew 2 percent to C$2.67 billion. Wealth and Insurance net income edged down from last year to C$364 million, while revenue increased 4 percent to C$1.09 billion.
U.S. Personal and Commercial Banking net income rose 12 percent to C$398 million, reflecting strong loan and deposit volume growth, while revenue grew 10 percent to C$1.74 billion. Wholesale Banking net income increased 12 percent to C$220 million driven by higher trading-related revenue, while revenue rose 6 percent from last year to C$643 million.
TD Bank declared a quarterly dividend of C$0.81 per share. The dividend is payable on July 31 to shareholders of record on July 9.
TD Bank also said it plans to launch a normal course issuer bid through the facilities of the TSX as well as through other designated exchanges and published markets in Canada to repurchase up to 12 million of its common shares. The shares represent about 1.3 percent of the common shares currently issued and outstanding.
The plan is subject to approval of the Office of the Superintendent of Financial Institutions Canada and the Toronto Stock Exchange.
TD closed Wednesday's trading on the NYSE at $81.09, down $0.75 on a volume of 765,800 shares.
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