close-up of the top of td canada trust tower building, toronto

Toronto-Dominion Bank (TD) wrapped up a strong third-quarter (Q3 2018) earnings season for Canada’s biggest banks on Thursday with a profit of nearly $3.11 billion, a 12% increase from last year that was supported by a buoyant economy and significant growth at its U.S. business.

“Overall, I feel very good about our performance at this stage of the year,” TD chief executive Bharat Masrani told analysts during a Thursday afternoon conference call.

He said the bank’s improved profitability over the first nine months of a financial year that ends Oct. 31 reflects “high levels of customer engagement and macro conditions that remain positive despite the headline risks.”

Masrani pointed to booming economies in both Canada and the U.S. as continued reasons for optimism in the bank’s outlook, but didn’t comment on the tense trade negotiations being held by Canadian and American officials this week in Washington, D.C.

His upbeat message echoed positive comments from the CEOs of Canada’s other big banks during the past two weeks, as they reported increased profit at their main operations.

Most of the five biggest banks showed robust overall profit growth from last year, except for Bank of Nova Scotia, which saw a year-over-year decline in profit due acquisition-related items at its international banking arm.

The banks’ operations in the United States generally outperformed their core domestic business.

“That’s definitely been a key positive and a big part of the story here. It’s not just resiliency in Canada,” Cormark Securities analyst Meny Grauman said in an interview.

TD reported Thursday that profit at its U.S. retail banking operation grew by 26.5% from last year, compared with a 7% increase in Canadian retail banking profit.

Earlier in the week, Bank of Montreal reported a 36% increase in net income from its U.S. personal and commercial banking unit, compared with a 5% increase at its Canadian counterpart.

Grauman said the U.S. operations of Canadian Imperial Bank of Commerce and Royal Bank of Canada (RBC), which are a smaller portion of their overall business, also outperformed their domestic profit growth during the quarter.

John Mackerey, a DBRS credit analyst who covers North American banking, said there are several factors helping the sector south of the border, including U.S. regulatory reform for financial services and a lower U.S. tax rate.

“We’re seeing momentum with the large regional banks as well as the subsidiaries of the Canadian banks,” Mackerey said.

Additionally, the increase in central bank interest rates over the past year has improved lending margins, given that the rates paid to depositors have risen at a slower pace, Mackerey said.

Canada’s banks have also benefited from solid economies on both sides of the border, as well as efficiency improvements that were reported across the industry, he added.

In total, Canada’s five biggest banks reported $11.06 billion of net income for the three months ended July 31, about 9% above Q3 2017.

TD and RBC were virtually tied for top spot, with just under $3.11 billion in net income each.

On an adjusted basis, TD earned $1.66 per diluted share, up from an adjusted profit of $1.51 per diluted share a year ago.

Analysts on average had expected TD to report a profit of $1.63 per share, according to Thomson Reuters Eikon.

TD’s Canadian retail business earned $1.85 billion for the quarter, up from nearly $1.73 billion a year ago helped by revenue growth, partially offset by higher insurance claims and non-interest expenses.

Meanwhile, TD’s U.S. retail business earned $1.14 billion, up from $901 million in the same quarter last year, helped by loan and deposit volume growth, higher margins and benefits from U.S. tax reform.