TD's Profits Rise 44%; Untouched by Subprime Mess

| About: Toronto-Dominion Bank (TD)

TD Bank (NYSE:TD) said Thursday its Q4 profit rose 44% as the number-three Canadian bank posted double-digit growth across all of its units. Net income of C$1.09 billion (US$1.10 billion - C$1.50/share) was up from C$762 million (C$1.04/share) a year ago. Revenue of C$3.55 billion was up from C$3.31 billion in the year-ago period. Adjusted earnings per share of C$1.40 beat consensus estimates of C$1.38, while the revenue figure fell just short of analyst expectations of C$3.56 billion. The results include a C$135 million gain related to the estimated value of the shares it received in Visa Inc. Return on equity, an important measure of profitability, was 20.8% versus 15.7%. Despite the spreading of subprime woes beyond U.S. borders, TD took a negligible C$39 million loan loss provision. "In a year of turbulent markets, clearly the successful altering of our risk-reward profile was a significant advantage for us," CEO Ed Clark said. "This year was also defined by the investments we made to expand our U.S. platform, and we're excited about growing as a leading North American financial institution." Canadian banks have weathered the mortgage storm far better than their U.S. counterparts. TD shares are up 19.5% year-to-date, compared to competitors Royal Bank (RY, +12.4%), Bank of Montreal (BMO, +4%), CIBC (CM, +6.7%) and Bank of Nova Scotia (BNS, +19%). In October TD agreed to buy Commerce Bancorp (CBH) for $8.5 billion in stock and cash. The deal, expected to close in the spring, will double TD's U.S. retail operations, making it the seventh-largest North American bank by branch locations. Shares are down 0.8% to $71 in pre-market trading.

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Tagged: , Foreign Regional Banks, Canada, Earnings
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