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TD Bank Group Reports Fourth Quarter and Fiscal 2016 Results

by ahnationtalk on December 1, 2016817 Views

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TD Bank Group Reports Fourth Quarter and Fiscal 2016 Results

This quarterly earnings news release should be read in conjunction with the Bank’s unaudited Fourth Quarter 2016 consolidated financial results for the year ended October 31, 2016, included in this Earnings News Release and the audited 2016 Consolidated Financial Statements, prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), which is available on TD’s website at http://www.td.com/investor/. This analysis is dated November 30, 2016. Unless otherwise indicated, all amounts are expressed in Canadian dollars, and have been primarily derived from the Bank’s Annual or Interim Consolidated Financial Statements prepared in accordance with IFRS. Certain comparative amounts have been reclassified to conform to the presentation adopted in the current period. Additional information relating to the Bank is available on the TD’s website at http://www.td.com, as well as on SEDAR at http://www.sedar.com and on the U.S. Securities and Exchange Commission’s (SEC) website at http://www.sec.gov (EDGAR filers section).

Reported results conform to generally accepted accounting principles (GAAP), in accordance with IFRS. Adjusted measures are non-GAAP measures. Refer to the “How the Bank Reports” section of the 2016 Management’s Discussion and Analysis (MD&A) for an explanation of reported and adjusted results.

FOURTH QUARTER FINANCIAL HIGHLIGHTS, compared with the fourth quarter last year:

  • Reported diluted earnings per share were $1.20, compared with $0.96.
  • Adjusted diluted earnings per share were $1.22, compared with $1.14.
  • Reported net income was $2,303 million, compared with $1,839 million.
  • Adjusted net income was $2,347 million, compared with $2,177 million.

FULL YEAR FINANCIAL HIGHLIGHTS, compared with last year:

  • Reported diluted earnings per share were $4.67, compared with $4.21.
  • Adjusted diluted earnings per share were $4.87, compared with $4.61.
  • Reported net income was $8,936 million, compared with $8,024 million.
  • Adjusted net income was $9,292 million, compared with $8,754 million.

FOURTH QUARTER ADJUSTMENTS (ITEMS OF NOTE)
The fourth quarter reported earnings figures included the following items of note:

  • Amortization of intangibles of $60 million after tax (3 cents per share), compared with $65 million after tax (3 cents per share) in the fourth quarter last year.
  • A gain of $16 million after tax (1 cent per share) due to the change in fair value of derivatives hedging the reclassified available-for-sale securities portfolio, compared with a gain of $21 million after tax (1 cent per share) in the fourth quarter last year.

TORONTO, Dec. 1, 2016 – TD Bank Group (“TD” or the “Bank”) today announced its financial results for the fourth quarter ending October 31, 2016. Fourth quarter earnings were $2.3 billion, up 25% on a reported basis and 8% on an adjusted basis compared with the same quarter last year, reflecting growth in the U.S. Retail and Wholesale segments. Reported earnings for the year were $8.9 billion, an increase of 11% over last year and adjusted earnings of $9.3 billion increased by 6%.

“We are pleased with our performance this quarter and overall earnings growth in 2016,” said Bharat Masrani, Group President and Chief Executive Officer. “Our results this year demonstrate the strength of our diverse business mix, organic growth strategy and the investments we’ve made to become a more productive and customer-focused organization.”

Canadian Retail
Canadian Retail net income was $1,502 million for the fourth quarter compared with $1,496 million in the same quarter last year. Revenue growth of 3% and lower insurance claims were largely offset by higher non-interest expenses, the impact of a higher effective tax rate, and higher provisions for credit loss.

U.S. Retail
U.S. Retail net income was $701 million (US$536 million) for the fourth quarter compared with $595 million (US$452 million) on a reported basis and $646 million (US$491 million) on an adjusted basis for the fourth quarter last year.

The U.S. Retail Bank, which excludes the Bank’s investment in TD Ameritrade, generated net income of $608 million (US$465 million), an increase of 25% (26% in U.S. dollars) on a reported basis and 13% (14% in U.S. dollars) on an adjusted basis, compared with the fourth quarter last year. The growth in earnings reflects revenue growth, strong operating leverage, increased loan and deposit volume, and good credit quality.

TD Ameritrade contributed $93 million (US$71 million) in earnings to the segment compared with $109 million (US$84 million) for the same quarter last year.

Wholesale Banking
Wholesale Banking net income was $238 million for the fourth quarter, an increase of 21% compared with the fourth quarter last year, reflecting revenue growth from higher origination activity in debt and equity capital markets, and fixed income trading, partially offset by lower equity trading revenue and advisory fees.

Capital
TD’s Common Equity Tier 1 Capital ratio on a Basel III fully phased-in basis was 10.4%.

Conclusion
“As we look to 2017, we remain focused on growing market share, making strategic investments in our businesses, and executing with determination to deliver on our purpose: to enrich the lives of our customers, communities and colleagues. If current conditions are sustained, we are well positioned to deliver in 2017,” said Masrani. “I would like to thank our colleagues for their dedication and valuable contributions this year, and our customers for the opportunity to serve them every day.”

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