Toronto-Dominion Bank (TD) has released its financial results for the third quarter of 2024, which ended on July 31, 2024. The Wealth Management and Insurance segment reported net income of $430 million in the last quarter, nearly unchanged from $431 million a year earlier.
According to its shareholder report, the bank faced increased claims costs due to severe weather events in the Greater Toronto Area and wildfires in Alberta, alongside rising claim severity.
Revenue
Wealth Management and Insurance revenue reached $3.3 billion in the third quarter of 2024. This marks an increase of $391 million, or 13 per cent, compared to the third quarter of 2023. The bank no longer provides separate quarterly data for the two components of this segment.
Non-interest income for the third quarter of 2024 stood at $3 billion, up $333 million, or 12 per cent, from the same period the previous year.
As was the case in the previous quarter, the bank attributes the revenue growth to higher insurance premiums, fee-based account revenues, and transaction-related income.
Revenue growth was partially offset by increased insurance service expenses, which reached $1.7 billion in the last quarter, up $283 million or 20 per cent from the third quarter of 2023.
This increase primarily reflects “increased claims severity, less favourable prior years’ claims development and larger impact of severe weather-related events,” the bank stated in its shareholder report.
Assets under administration amounted to $632 billion as of July 31, 2024, an increase of $73 billion, or 13 per cent, compared to the same date in 2023.
Meanwhile, assets under management totalled $523 billion at the end of the third quarter of 2024, an increase of $63 billion, or 14 per cent, compared to the previous year.
Premiums
Gross written insurance premiums were nearly $1.9 billion in the third quarter of 2024, up $195 million, or 12 per cent, compared to $1.7 billion in the third quarter of 2023.
For the first nine months of fiscal 2024, gross written insurance premiums totalled $4.7 billion, compared to $4.2 billion for the same period in 2023. This represents an increase of $488 million, or 12 per cent year-over-year.
New provision
Across its entire operations, TD reported a net loss of $181 million in the third quarter of 2024, compared to a profit of $2.9 billion during the same period in 2023.
The decline in net income is attributed to the U.S. Retail Bank segment. The bank has set aside a $3.6 billion CDN provision related to ongoing investigations into its anti-money laundering (AML) program.
On the same day it disclosed its results, August 21, TD issued a separate statement regarding the $2.6 billion USD provision for its AML program. The amount reflects the bank’s current estimate of the total fines it expects to pay to various U.S. regulators.
"We recognize the seriousness of our U.S. AML program,” stated Bharat Masrani, Group President and CEO of TD Bank Group. The bank is “building stronger foundations for our U.S. business, where 30,000 colleagues proudly serve more than 10 million Americans from Maine to Florida," added Masrani.
In the same release, the bank also announced that it had sold approximately 40.5 million common shares of The Charles Schwab Corporation, reducing its stake in the company from 12.3 per cent to 10.1 per cent. This stake was acquired in October 2020 when Schwab purchased the TD Ameritrade Holding Corporation.
