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TD Bank Group Reports Third Quarter 2015 Results
by ahnationtalk onAugust 27, 20152093 Views
TD Bank Group Reports Third Quarter 2015 Results
This quarterly earnings news release should be read in conjunction with the Bank’s unaudited Third Quarter 2015 Report to Shareholders for the three and nine months ended July 31, 2015, prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), which is available on our website at http://www.td.com/investor/. This analysis is dated August 26, 2015. 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 Bank’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).
The Bank implemented new and amended standards under IFRS, which required retrospective application, effective the first quarter of fiscal 2015 (2015IFRS Standards and Amendments). As a result, certain comparative amounts have been restated where applicable. For more information refer to Note 2 of the third quarter 2015 Interim Consolidated Financial Statements. The 2015 IFRS Standards and Amendments were not incorporated into the regulatory capital disclosures presented prior to the first quarter of 2015.
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 Third Quarter 2015 Management’s Discussion and Analysis (MD&A) for an explanation of reported and adjusted results.
THIRD QUARTER FINANCIAL HIGHLIGHTS, compared with the third quarter a year ago:
Reported diluted earnings per share were $1.19, compared with $1.11.
Adjusted diluted earnings per share were $1.20 compared with $1.15.
Reported net income was $2,266 million, compared with $2,107 million.
Adjusted net income was $2,285 million, compared with $2,167 million.
YEAR-TO-DATE FINANCIAL HIGHLIGHTS, nine months ended July 31, 2015, compared with the corresponding period a year ago:
Reported diluted earnings per share were $3.25, compared with $3.22.
Adjusted diluted earnings per share were $3.47, compared with $3.29.
Reported net income was $6,185 million, compared with $6,137 million.
Adjusted net income was $6,577 million, compared with $6,265 million.
THIRD QUARTER ADJUSTMENTS (ITEMS OF NOTE)
The third quarter reported earnings figures included the following items of note:
Amortization of intangibles of $62 million after tax (3 cents per share), compared with $60 million after tax (3 cents per share) in the third quarter a year ago.
Recovery of litigation losses of $24 million after tax (1 cent per share) related to certain litigation matters recognized as an item of note in prior quarters.
A gain of $19 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 $24 million after tax (1 cent per share) in the third quarter a year ago.
TORONTO, Aug. 27, 2015 – TD Bank Group (“TD” or the “Bank”) today announced its financial results for the third quarter ended July 31, 2015. The Bank recorded adjusted earnings of $2.3 billion, an increase of 5% compared with the same quarter last year, reflecting strong contributions from the Canadian Retail and Wholesale Banking segments.
“TD’s third quarter performance demonstrates the strength of our diversified business model,” said Bharat Masrani, Group President and Chief Executive Officer. “Our results were fueled by good organic growth, continued strong credit performance, favourable currency translation, and positive operating leverage.”
Canadian Retail delivered net income of $1.6 billion, an increase of 11% over the third quarter last year on a reported basis, and 8% over the third quarter last year on an adjusted basis. Earnings were primarily driven by good loan, deposit, and wealth asset volume growth and very strong insurance earnings.
“Our Canadian Retail businesses performed very well,” said Tim Hockey, Group Head, Canadian Banking and Wealth Management. “We are delighted that TD Canada Trust was recognized for the tenth consecutive year by J.D. Power for attaining ‘Highest in Customer Satisfaction Among the Big Five Retail Banks.’ Looking ahead, we will continue to focus on providing legendary customer experiences through all of our channels.”
U.S. Retail reported net income for the third quarter was US$543 million and adjusted net income was US$524 million. Excluding the Bank’s investment in TD Ameritrade, the segment generated adjusted net income of US$450 million, in line with the third quarter last year. The results reflect strong loan and deposit growth, and disciplined expense management, partially offset by lower margins and normalizing credit losses.
TD Ameritrade contributed US$74 million in earnings, an increase of 7% compared with the third quarter last year.
“Our U.S. Retail business had a strong quarter, with very good volume growth and excellent expense management,” said Mike Pedersen, Group Head, U.S. Banking. “Our ongoing focus on customer experience, deepening relationships, and productivity positions us well going forward.”
Wholesale Banking net income for the quarter was $239 million, an increase of 11% compared with the third quarter last year, driven by higher trading, mergers and acquisitions fees, and corporate lending revenue.
“Our results reflected strong trading, good debt capital market originations activity, and a growing U.S. loan portfolio,” said Bob Dorrance, Group Head, Wholesale Banking. “We remain focused on growing and strengthening client relationships and managing our risk.”
TD’s Common Equity Tier 1 Capital ratio on a Basel III fully phased-in basis was 10.1%, compared with 9.9% last quarter.
“Our results this quarter reflect the growth engines, earnings power and resilience of our businesses against a challenging operating and economic backdrop,” said Masrani. “We remain relentlessly focused on delivering and pursuing growth opportunities, increasing our productivity, and adapting our organization for the future.”