TD’s Wealth Management and Insurance earnings down 2% in 2024

In its financial results for the fourth quarter ending October 31, Toronto Dominion Bank (TD) Group reported net income for its Wealth Management and Insurance segment of $349 million in the fourth quarter, compared with $492 million for the same period last year. This represents a year-on-year decline of 29%.

In its press release accompanying the release of its results, the company notes that it had to contend with “higher claims costs due to a significant hailstorm in Calgary and severe weather events in Quebec, in addition to increased claims severity.” 

For fiscal 2024, net income for the same business unit reached $2 billion, down $46 million or 2.3% on fiscal 2023.

Products  

Wealth management and insurance revenues totaled $3.9 billion in the fourth quarter of 2024. This represents an increase of $981 million, or 33%, over the same period last year. The company no longer provides separate data for the two segments on a quarterly basis.

On a 12-month basis, TD reports total wealth management revenues of $13.5 billion for fiscal 2024, compared with $11.6 billion in 2023. This represents an increase of $1.9 billion or 16% in 12 months.

TD explains the increase in revenues by reinsurance recoveries and higher insurance premiums.

The company also highlights the increase in expenses related to insurance activities, which totalled $2.4 billion in the fourth quarter, compared with $1.7 billion for the same period in 2023. It should be noted that certain amounts for the last quarter and for 2024 have been restated to take into account the adoption of IFRS 17 on insurance contracts.

Assets under administration totalled $651 billion at October 31, 2024, up $120 billion or 23% compared with assets under administration at October 31, 2023.

Assets under management stood at $530 billion at the end of the fourth quarter of 2024. This represents an increase of $89 billion or 20% compared with assets under management at the same date in 2023.

Premiums  

Gross written insurance premiums amounted to $1.8 billion in the fourth quarter of 2024, an increase of $215 million or 13% compared with cumulative premiums for the same period in 2023.

After 12 months, gross written insurance premiums were $6.5 billion in 2024, compared with $5.8 billion in 2023. This represents a year-on-year increase of $703 million or 12%.

Group highlights 

For all its activities, TD Bank reported net income of $3.6 billion in the fourth quarter of 2024, compared with reported net income of $2.9 billion for the same quarter in 2023.

TD highlighted the progress made in the U.S. Anti-Money Laundering (AML) compliance programs investigations of its U.S. Retail Services unit under the U.S. SAFER Banking Act. An amount of $52 million was paid for this purpose in the fourth quarter.

For fiscal 2024 as a whole, a total of $4.2 billion was paid for the overall resolution of AML investigations.

A special contribution of $72 million was also made to the Federal Deposit Insurance Corporation (FDIC) to cover losses incurred by the Deposit Insurance Fund, which protects uninsured depositors in connection with the bank failures that occurred in the spring of 2023. In total, TD contributed $586 million to the FDIC in 2024.

Bharat Masrani, Group President and CEO of TD Bank Group, points out that the resolution of issues relating to the U.S. AML program was one of the key developments in the last quarter. This brings “important clarity to our stakeholders. Remediation is our number one priority, and we continue to make meaningful progress in addressing the failures,” he added. 

Economic outlook  

TD Economics “expects the Bank of Canada to continue lowering interest rates over the next year, reaching between 2.25% to 2.50% by the end of calendar 2025,” states the Dec. 5 press release.

For the U.S., TD Economics expects that the U.S. Federal Reserve rate will be lowered to 3.25%-3.50% by the end of calendar 2025, a level that it considers is “still on the restrictive side.”

“Interest rates differentials between Canada and the United States have widened, weakening the Canadian dollar. TD Economics expects the Canadian dollar will trade in the 71 to 73 U.S. cent range over the next few quarters.”

The company added that “TD Economics forecasts a modest pickup in overall economic growth in calendar 2025 from this year’s estimated tepid rate of around 1%.”