TD Bank Financial Group announced that its provision for credit loss in the first quarter is expected to be $325 million.
TD also announced that it expects its first quarter cash operating earnings to be in the range of 77¢ to 80¢ per share.
TD estimates that its provision for credit loss for fiscal year 2002 to be in the range of $1.1 billion to $1.2 billion. This range is higher than the previous guidance of $835 to $875 million given during the fourth quarter 2001 earnings conference call.
TD cited the following items as contributing to the increased provision for credit loss in the first quarter:
- approximately $40 million will be charged during the quarter as a result of rapid deterioration in Argentina;
- an additional $50 million will be charged in the first quarter due to a lower than expected rate of recovery resulting from a further deterioration in its existing impaired loans in its communications portfolio; and
- loan losses in the personal and commercial bank were approximately $15 million higher than originally anticipated, as a result of collections processing issues. TD says that it is on track to largely address these issues by the end of the second quarter.
“We believe that based on the current environment, our estimated outlook for credit loss provisions for the remainder of the fiscal year is appropriate,” said chairman and CEO Charles Baillie.