For the quarter ended April 30, Toronto Dominion Bank (TD) reported net income attributable to common shareholders of $3.4 billion (B).
This represents a downturn of 12 per cent or $460 million from $3.8 billion in net income reported in Q2 2022.
In a press release issued on May 25, TD Bank mentions that its merger agreement with US bank First Horizon was terminated on May 4. Announced on February 28, 2022, the merger agreement had been extended on February 9, 2023.
As a result, for its fiscal year 2023, the bank does not expect to achieve its medium-term adjusted earnings per share growth target range of 7 to 10 per cent.
“We are successfully operating in an unpredictable operating environment, supported by robust capital and liquidity and the best bankers in the industry,” says Bharat Masrani, President and CEO of TD Bank Group.
In the Report to Shareholders, TD Bank indicates that the provision for credit losses for the second quarter of 2023 was $599 million, compared with $27 million in Q2 2022.
Broken down by segment, the provision for credit losses rose by $208 million in the U.S. Retail Bank segment, $187 million in Canadian Personal and Commercial Banking and $155 million in the Corporate segment.
Wealth management and insurance
Net income for the Wealth Management & Insurance segment was $563 million in the second quarter of 2023, down 16 per cent from $668 million in Q2 2022.
Looking at the results in closer detail, insurance net income totalled $235 million in the second quarter of 2023, compared with $247 million in Q2 2022. This represents a decline of $12 million or 4.9 per cent.
The slide in profitability was most apparent in Wealth Management, where net income was $328 million in the second quarter of 2023, compared with $421 million in Q2 2022. This represents a year-on-year decrease of 22 per cent.
In its press release, TD points out that it launched small business insurance during the past quarter.
Gross originated insurance premiums were $1.4 billion in the second quarter of 2023, up $105 million or 8.3 per cent from Q2 2022.