TD Bank Group (TSX: TD) has reported mixed financial results for the fourth quarter and full fiscal year ended October 31, 2024. For the fourth quarter, TD reported net income of $3.6 billion, a substantial increase of 26.8% compared to $2.9 billion in the same quarter last year.


However, adjusted net income fell 8% to $3.2 billion from $3.5 billion in the fourth quarter of 2023. This decline is especially notable given the bank’s overall revenue growth of 17.7% to $15.5 billion, compared by $13.2 billion a year earlier. On a sequential basis, results also showed signs of tension, with adjusted net income down 12% from $3.6 billion in Q3 2024.


Earnings per share showed a similarly nuanced picture. Reported diluted earnings per share rose to $1.97 in the fourth quarter, compared to $1.48 a year ago. Still, adjusted diluted earnings per share fell to $1.72 from $1.82 year-over-year, down sharply from $2.05 in the previous quarter.


Provisions for credit losses rose to $1.1 billion in the fourth quarter of 2024, compared to $878 million in the same quarter last year, and were slightly higher than the $1.07 billion reported in the third quarter. This increase underlines the deteriorating credit environment as high interest rates and slowing economic growth put pressure on borrowers.


Similarly, non-interest expenses rose to $8.05 billion in the quarter, up 5.5% year-over-year from $7.63 billion and 9.1% sequentially from $7.31 billion in the third quarter . Although management attributed some of these costs to investments in infrastructure and risk management, especially in the US, rising costs weighed heavily on adjusted earnings.


Segment performance painted a mixed picture of TD’s business. In the Canadian Personal and Commercial Banking division, net income grew 9% year-over-year to $1.82 billion, supported by a 7% increase in revenue to $5.06 billion. Provisions for credit losses in this segment rose 10.3% from the fourth quarter of 2023, dampening overall gains. Compared to the previous quarter, net profit in this segment grew by a modest 3.2%.


In contrast, the U.S. Retail Banking segment’s reported net income for the quarter fell 32% year over year to $863 million and fell 24.5% from $1.14 billion in the third quarter. Adjusted net income also fell sharply, down 14% year over year and 11% sequentially due to higher PCLs and higher costs. The investment in Charles Schwab (NYSE: SCHW) contributed $154 million to net income for the quarter, down 22% from the same period last year.


TD’s Wealth Management and Insurance segment also faced headwinds despite a 33% increase in revenue to $3.94 billion. Net income in the segment fell 29% year-over-year to $349 million, primarily due to significant damage costs from severe weather events in Calgary and Quebec. Subsequently, the net result in the segment fell by 13.2%.


Wholesale Banking delivered a more positive performance, with adjusted net income rising 68% year-on-year to $299 million. Revenue rose 19% to $1.77 billion, supported by gains in credit, trading and underwriting businesses. On a consecutive basis, the adjusted net result in this segment grew by 12.8%.


For the full fiscal year, TD’s reported net income fell 17% to $8.8 billion, down from $10.6 billion in 2023. Adjusted net income also declined, albeit more modestly, falling 4.8% to $14.3 billion, compared to $15.0 billion last year. Revenue for the year grew to $57.2 billion, up 12.8% from $50.7 billion in fiscal 2023, but this increase was offset by rising costs and a deteriorating credit environment.


The bank’s reported earnings per share for the year fell to $4.72 from $5.52 in 2023, while adjusted earnings per share fell slightly to $7.81 from $7.91. These figures reflect the impact of installation costs, including: cost $4.2 billion in connection with the resolution of its US money laundering investigations.


TD’s Common Equity Tier 1 (CET1) capital ratio stood at 13.1%, a slight improvement from 12.8% in the previous quarter, but down from 14.4% a year earlier. Total deposits rose to $1.27 trillion, up from $1.2 trillion last year, while loans grew to $949.5 billion, up from $895.9 billion in 2023.


Looking ahead, TD management acknowledged that fiscal year 2025 will be a “transition year.” The bank has suspended its medium-term financial targets, including a target of 7-10% adjusted EPS growth, citing the need to focus on recovery efforts, especially in its US operations. CEO Bharat Masrani emphasized that while the bank is well positioned for long-term growth, disciplined capital allocation and improved operational efficiencies will be needed in the coming year to address ongoing challenges.


“An important development this quarter was the resolution of our US AML issues, which provided important clarity for our stakeholders. Recovery is our first priority and we continue to make meaningful progress in addressing the failures,” Masrani said in a statement.


TD last traded at $79.66 on the TSX.




Information for this briefing was found through Sedar and the sources mentioned. The author has no effects or relationships with this organization. No recommendation to buy or sell. Always do additional research and consult a professional before purchasing any effect. The author does not have any licenses.



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