The Toronto-Dominion Bank (TD) reported net earnings of $3.8 billion in the fourth quarter of 2021, which ran from August 1 to October 31. This result is down 26.5 per cent or $1.4 billion from Q4 2020, when TD reported net earnings of $5.1 billion.
For the full year 2021, TD reported earnings of $14.3 billion, versus $11.9 in 2020. This increase of 20.2 per cent or $2.4 billion reflects “lower PCL, higher revenues in the Canadian Retail business, and lower insurance claims and related expenses,” TD says.
Wealth and Insurance advance
In its Canadian Retail sector alone, which includes its insurance and wealth businesses, the company reported net income of $8.5 billion in 2021, up from $6 billion in 2020. TD attributes this increase of 40.7 per cent or $2.5 billion to “lower PCL, higher revenues in the Canadian Retail business, and lower insurance claims, partially offset by higher non-interest expenses.”
The three businesses in this segment grew in 2021:
- Canadian Personal and Commercial Banking: Net income of $5.9 billion in 2021, up 47.3 per cent or $1.9 billion from 2020
- Wealth: Net income of $1.8 billion in 2021, up 34.3 per cent or $462 million from 2020. In the fourth quarter of 2021 alone, this business reported net income of $410 million, up 18.8 per cent or $65 million from the $345 million reported in Q4 2020.
- Insurance: Net income of $787 million in 2021, up 15.2 per cent or $104 million from 2020. In the fourth quarter of 2021 alone, this subsector reported net income of $198 million, up 10.6 per cent or $19 million from the $179 million reported in Q4 2020.
Gross premiums up
Gross originated insurance premiums were $1.3 billion in the fourth quarter of 2021, an increase of 2.9 per cent or $37 million over Q4 2020.
For the full year 2021, premiums were $4.9 billion, compared with $4.8 billion in 2020. This represents an increase of 1.5 per cent or $70 million.
Insurance claims and related expenses decline in 2021
Insurance claims and related expenses were $2.7 billion for the full year 2021, compared with $2.9 billion in 2020. This decrease of 6.2 per cent or $179 million reflects “more favourable current year claims experience and a decrease in the fair value of investments supporting claims liabilities which resulted in a similar decrease in non-interest income,” TD explains.
This result was partially offset by “higher current year claims from business growth.”
For the fourth quarter of 2021 alone, insurance claims and related expenses were $650 million versus $630 million in Q4 2020. This increase of 3.2 per cent or $20 million is attributable to “less favourable prior years’ claims development and higher current year claims from business growth,” says TD.
However, this was “partially offset by improved current year claims experience and a decrease in the fair value of investments supporting claims liabilities which resulted in a similar decrease in non-interest income.”
Insurance products
In the non-interest income line, insurance revenue was $4.9 billion in 2020 compared with $4.6 billion in 2021. This represents an increase of 6.8 per cent or $312 million.
Total insurance revenue, including non-interest income, reached $4.9 billion in 2021, up from $4.8 billion in 2020. The corresponding increase is 2.2 per cent or $107 million.
