TD results in 2022: Wealth Management down 9.7%, Insurance 3.2%

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By Aurélia Morvan | Dec. 16, 2022, 4:21 p.m.

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TD Bank Group (TD) reported net income of $6.7 billion in fourth quarter 2022, the period from August 1 to October 31. Income thus climbed 76.4 per cent or $2.9 billion from Q4 2021.

For the full year 2022, the financial institution's net income was $17.4 billion, up from $14.3 billion in 2021. This represents an increase of 21.9 per cent or $3.1 billion.

Wealth Management and Insurance

For its Wealth Management and Insurance segment, TD reported net income of $2.4 billion in 2022, down from $2.6 billion in 2021. This decrease of 7.7 per cent or $201 million reflects “higher non-interest expenses and insurance claims and related expenses, partially offset by higher net interest income.”

In the fourth quarter of 2022 alone, this segment had net income of $516 million. This decline of 15.1 per cent or $92 million compared with net income in Q4 2021 reflected “lower non-interest income in the wealth management business and higher claims in the insurance business, partially offset by higher net interest income.”

Looking at the results in closer detail:

Wealth Management had net income of $1.6 billion in 2022, down 9.7 per cent or $176 million from 2021. In the fourth quarter 2022 alone, this sub-segment reported net income of $362 million, for a decrease of 11.7 per cent or $48 million from Q4 2021.

Insurance reported net income of $762 million in 2022, down 3.2 per cent or $25 million from 2021. In fourth quarter 2022 alone, this sub-segment had net income of $154 million, down 22.2 per cent or $44 million from net income in Q4 2021.

Revenue

Wealth Management and Insurance revenue, including net interest income and non-interest income, was $10.9 billion in 2022, compared with $10.6 billion in 2021. This represents an increase of 2.6 per cent or $271 million.

Looking at the results in closer detail:

In Insurance, revenue, including both net interest income and non-interest income, was $5.2 billion in 2022, compared with $4.9 billion in 2021. This represents an increase of 6.9 per cent or $340 million.
In Wealth Management, revenue, including both net interest income and non-interest income, dipped to $5.6 billion in 2022, from $5.7 billion in 2021. The corresponding decrease is 1.2 per cent or $69 million.

Net interest income for the Wealth Management and Insurance segment was $945 million in 2022, compared with $762 million in 2021. This increase of 24 per cent or $183 million reflects “volume growth and higher margins.”

Looking at the results in closer detail:

In Wealth Management, TD reported net interest income of $1.1 billion in 2022, up from $743 million in 2021. The corresponding increase is 46.6 per cent or $346 million.
In insurance, TD reported net interest losses of $144 million in 2022, compared with net interest income of $19 million in 2021, for a decline of $163 million.

Non-interest income for the Wealth Management and Insurance segment was $9.9 billion in 2022, versus $9.8 billion in 2021. This increase of 0.9 per cent or $88 million reflects “higher insurance volumes and prior year premium rebates for customers, partially offset by a decrease in the fair value of investments supporting claims liabilities which resulted in a similar decrease in insurance claims, and lower fee-based and transaction revenue in the wealth management business,” explains TD.

Looking at the results in closer detail:

Insurance had $5.4 billion in non-interest income in 2022, up from $4.9 billion in 2021. This amounts to an increase of 10.3 per cent or $503 million.
Wealth Management reported non-interest income of $4.5 billion in 2022, compared with $4.9 billion in 2021. This represents a decrease of 8.4 per cent or $415 million.

Claims

Insurance claims and related expenses were $723 million in Q4 2022, compared with $650 million in Q4 2021. This increase of 11.2 per cent or $73 million reflects “increased driving activity, inflationary costs and more severe weather-related events.”

Claims and expenses amounted to $2.9 billion for the full year 2022, versus $2.7 billion in 2021. This increase of 7.1 per cent or $193 million reflects “increased driving activity, inflationary costs and more severe weather-related events.”

This result was “partially offset by the impact of a higher discount rate which resulted in a similar decrease in the fair value of investments supporting claims liabilities reported in non-interest income and favourable prior years’ claims development.”