TD Bank Group (TD, TD.TO) on Thursday reported a 21 percent increase in profit for the second quarter, reflecting strong performance at its Canadian and U.S. retail businesses.
Looking ahead to fiscal 2012, the Canadian lender forecasts adjusted earnings per share growth in a range of 7 percent to 10 percent.
Ed Clark, Group President and Chief Executive Officer of TD Bank Group said, "TD's adjusted quarterly earnings were up 14% over the same period last year, with our North American retail businesses driving that growth, with a new record in adjusted earnings."
In the second quarter, Canadian Personal and Commercial Banking segment's adjusted net income rose 14 percent to C$838 million. The results were driven by good core volume growth, favorable credit performance and the contribution from MBNA Canada.
Wealth and Insurance segment's net income rose 16 percent to C$365 million, reflecting strong premium growth and claims performance in the insurance business and improved results in TD's Wealth business despite difficult markets.
U.S. Personal and Commercial Banking adjusted net income increased 9 percent to $358 million, driven by strong volume growth.
In the company's Wholesale Banking unit, net income rose 5 percent to C$197 million. The increase was mainly due to higher revenues across several business lines, notably investment banking.
TD Bank's second-quarter net income was C$1.62 billion or C$1.78 per share, up from C$1.34 billion or C$1.50 per share in the year-ago period.
On an adjusted basis, net income rose to C$1.66 billion or C$1.82 per share from C$1.46 billion or C$1.63 per share in the prior-year quarter.
On average, fourteen analysts polled by Thomson Reuters expected the company to earn C$1.78 per share for the quarter. Analysts estimates typically exclude special items.
Total revenue for the quarter grew 11.4 percent to C$5.75 billion from C$5.16 billion in the same period last year. Analysts had a consensus revenue estimate of C$5.70 billion.
Net interest income grew 10 percent from last year to C$3.68 billion, while non-interest income rose 6 percent to C$2.07 billion.
Provision for credit losses for the quarter were C$388 million, up from C$349 million a year ago.
Looking ahead, Clark said, "While we expect the second half of 2012 to remain challenging due to slowing loan growth, persistent low rates and regulatory headwinds, we're still working to deliver adjusted EPS growth in the 7-10% range this year."
Separately, TD Bank announced that a dividend of C$0.72 per share in the capital stock of the bank has been declared for the quarter ending July 31, 2012. The dividend is payable on and after July 31 to shareholders of record at the close of business on July 5.
TD closed Wednesday's trading on the NYSE at $76.76 on a volume of 896,000 shares. In Thursday's pre-market, the stock is adding $2.13 or 2.77 percent to $78.93.
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