TD Bank Group said Thursday it is cutting about 2% of its workforce in an effort to save roughly $600 million a year, as part of a restructuring that began in the second quarter.
The bank announced the reduction as it reported a second-quarter profit of $11.1 billion. The cuts would affect around 2,000 employees, based on TD’s roughly 101,759 full-time equivalent employees for fiscal 2024.
Earnings were significantly boosted by the sale of its remaining stake in The Charles Schwab Corp., while the restructuring led to $163 million in pre-tax charges for the quarter. The charges were mostly related to real estate optimization. TD expects about $650 million in pre-tax charges over the next several quarters tied to severance and other costs.
The restructuring comes as chief executive Raymond Chun, who took on the role at the start of the last quarter, looks for savings as the bank moves past its costly anti-money laundering oversight scandal.
“We are well positioned as we enter the second half of the year,” said Chun in a statement.
“We are operating in a fluid macroeconomic environment. As we navigate this period of uncertainty, TD is very well-capitalized, prepared for a broad range of economic scenarios, and remains focused on the needs and goals of our clients.”
The bank said Thursday the profit amounted to $6.27 per diluted share for the quarter ended April 30, up from a profit of $2.6 billion or $1.35 per diluted share a year earlier.
TD recorded an $8.6-billion after-tax gain on the sale of its Schwab shares in the quarter.
On an adjusted basis, TD said it earned $1.97 per diluted share in its second quarter, down from an adjusted profit of $2.04 per diluted share a year ago.
Analysts on average had expected an adjusted profit of $1.76 per share, according to LSEG Data & Analytics.
Revenue for the quarter totalled $22.9 billion, up from $13.8 billion in the same quarter last year. TD’s provision for credit losses amounted to $1.3 billion, up from $1.1 billion a year ago.
TD said its Canadian personal and commercial banking business earned just under $1.7 billion in the quarter, down slightly from just over $1.7 billion in the same quarter last year. The decline came as it faced higher provisions for credit losses and non-interest expenses, partially offset by higher revenue.
TD’s U.S. retail operations earned $120 million in the quarter, down from $507 million a year earlier.
The bank’s wealth management and insurance business earned $707 million, up from $621 million a year ago. Its wholesale banking division earned $419 million, up from $361 million in the same quarter last year.
Insurance service expenses for the second quarter were $1.4 billion, an increase of $169 million compared with the same quarter last year. This primarily reflects increased claims severity.
TD wealth management and insurance had $1.2 billion in assets under administration and management on April 30, up from $1.1 billion at the same time last year.
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