(February 15 – 10:00 ET) – TD Bank Financial Group is the first of the big banks to issue first quarter results, and the bank is reporting record operating income.

On an operating cash basis, earnings per share for the first quarter were 88¢ compared to 72¢ in the same period last year, net income for the quarter was $569 million. Return on common equity for the quarter was 19.5%, compared to 16.4% the prior year.

The strong profit performance was driven by each of TD’s core businesses: $267 million from TD Canada Trust, $231 million from TD Securities, $47 million from TD Waterhouse and $25 million from TD Wealth Management.

“We have continued our momentum this quarter with positive year-over-year gains in revenues and operating income, with strong growth from TD Canada Trust and a solid quarter from TD Securities,” said Charles Baillie, TD chairman and CEO. “Each of our core businesses has been building value in pursuit of our four strategic imperatives: to achieve scale, maintain momentum, be where banking is going and engage in activities that are at least North American in scope.”

TD Securities posted solid results during the quarter in which it completed the integration of Newcrest Capital Inc. During the quarter, TD recorded a pre-tax restructuring charge of $55 million in connection with the Newcrest acquisition.

TD has started reporting TD Wealth Management as a distinct segment this quarter. It includes the businesses of TD Asset Management, TD Evergreen, TD Private Investment Counsel, Private Banking, Financial Planning and the Estates and Trust businesses. While market conditions contributed to an earnings decline from last quarter, market share increased and assets under management continued to be the largest in Canada at over $112 billion. Baillie noted that he expects the consolidation of these businesses into a single segment will translate into a more comprehensive focus on customers’ investment needs, while adding shareholder value.

TD’s full attention is now on its plans to bring the TD and Canada Trust retail branch networks together under the new TD Canada Trust brand over the coming six months. The retail banking integration is expected to be completed by August.

Baillie didn’t provide explicit guidance about the earnings picture in the future. “While economic growth has slowed in the U.S. and to a lesser degree in Canada, the economic environment remains positive, albeit more challenging, given the combination of slower growth and volatile capital markets,” Baillie said, noting that recent cuts in interest rates in North America would benefit the economy.

“Our businesses are adjusting to changing markets well, by opening up new opportunities while focusing on our strategies. We expect to make further progress during the balance of the year as we enter the final phase of integrating Canada Trust,” he concluded.
-IE Staff