Skyline of the financial district

TD Bank Group topped expectations as it reported its first-quarter profit rose 10% compared with a year ago.

Yet the bank’s Toronto-listed shares fell about 2.5% in midday trading Thursday, after fellow Canadian banks this week also reported better-than-expected earnings growth.

“TD did not benefit from capital markets, wealth management and cost controls to the same degree as its peers,” wrote Barclays analyst John Aiken in a research note.

“What stood out in the quarter from our perspective was the ongoing struggles in its U.S. retail banking platform.”

TD said its wealth management business saw higher transaction and fee-based revenue in Canada, while there was also strong mortgage originations and chequing account growth. Climbing premiums, insurance sales and uptake in digital term life applications lifted the insurance business, the bank said.

But profits fell in TD’s U.S. retail business, after Charles Schwab Corp. finished its acquisition of TD Ameritrade Holding Corp. in October. TD said Schwab contributed $209 million in earnings, compared with the contribution of $201 million from TD Ameritrade in the first quarter last year.

Overall, TD earned net income of $3.28 billion or $1.77 per diluted share for the quarter ended Jan. 31, up from $2.99 billion or $1.61 per diluted share a year earlier. Revenue totalled $10.81 billion, up from $10.61 billion.

On an adjusted basis, TD says it earned $1.83 per diluted share, up from an adjusted profit of $1.66 per diluted share a year earlier. Analysts on average had expected an adjusted profit of $1.49 per share, according to financial data firm Refinitiv.

Provisions for credit losses amounted to $313 million, down from $919 million a year earlier.

“While TD did come in well ahead of expectations, the entire quantum of the beat can essentially be chalked up to lower than expected provisions,” Aiken wrote.

TD chief executive Bharat Masrani said in a statement that the bank has been investing in training for thousands of workers during the pandemic.

“(We) also continue to work with governments to facilitate access to relief programs and introduce new initiatives to help those most impacted by the pandemic,” Masrani said.