The Toronto-Dominion Bank (TD) reported earnings of $1.6 billion in the first quarter of 2023, compared with $3.7 billion in Q1 2022. The year-to-year decline is $2.15 billion or 58 per cent.
In his March 2 message to shareholders, TD Bank Group President and CEO Bharat Masrani highlighted the diversification of the business mix. One day earlier, TD announced the closing of the Cowen acquisition, “an important step forward in the expansion of our global dealer. TD Securities now has 6,500 colleagues in 40 cities around the world,” Masrani said.
TD’s US$13.4 billion acquisition of First Horizon, announced on February 28, 2022, is not yet complete. On February 9, the two parties agreed to extend the closing date of the transaction to May 27, 2023.
In addition, on February 24, TD reached a settlement in principle in the Stanford Financial Group litigation. TD has agreed to pay US$1.205 billion to compensate victims in the class action lawsuit against Robert Allen Stanford. As a result, TD recorded a provision of approximately $1.6 billion pre-tax, or $1.2 billion after-tax, in the first quarter of 2023.
Wealth Management and Insurance
Wealth Management and Insurance posted net income of $550 million in the first quarter of 2023, down 14 per cent from $636 million in Q1 2022.
Looking at the results in detail, net insurance income was $199 million in the first quarter of 2023, versus $179 million in Q1 2022. This represents an increase of $20 million or 11 per cent.
In wealth management, net income slid to $351 million in the first quarter of 2023, from $457 million in Q1 2022. The decrease amounts to $106 million or 23 per cent.
In its press release, TD says it has opened a second Auto Centre in Nova Scotia, which allows it to expand its capacity and lower claims severity in a context of high inflation.
Overall non-interest income was $2.9 billion in the first quarter of 2023, compared with $2.8 billion in Q1 2022, for an increase of $104 million or 4 per cent.
Gross insurance premiums written were $1.2 billion in the first quarter of 2023, up $72 million or 6 per cent versus Q1 2022.
Insurance claims and related expenses were $976 million in the first quarter of 2023, compared with $756 million reported in Q1 2022. This represents an increase of $220 million or 29 per cent.