TD Bank Group reported a second-quarter profit of $3.35 billion, down from $3.81 billion in the same quarter last year as it set aside more money for bad loans.
The bank says the profit amounted to $1.72 per diluted share for the quarter ended April 30, down from a profit of $2.07 per diluted share a year earlier.
Revenue totalled $12.37 billion, up from $11.26 billion in its second quarter last year.
TD says its provisions for credit losses amounted to $599 million, up from $27 million a year ago.
On an adjusted basis, TD says it earned $1.94 per diluted share in its latest quarter, down from an adjusted profit of $2.02 per diluted share in the same quarter last year.
Analysts on average had expected an adjusted profit of $2.07 per share, according to estimates compiled by financial markets data firm Refinitiv.
TD called off its US$13.4-billion deal to acquire U.S. bank First Horizon Corp. earlier this month, citing regulatory uncertainty around the takeover.
In its report Thursday, TD said that in light of that decision and the deterioration in the macroeconomic environment, the bank does not expect to meet its medium-term adjusted earnings per share growth target range of seven to 10 per cent.
“As we enter the second half of 2023, TD’s businesses are strong, and our customer and client relationships continue to expand,” TD chief executive Bharat Masrani said in a statement.
“We are successfully operating in an unpredictable operating environment, supported by robust capital and liquidity and the best bankers in the industry.”
TD said its Canadian personal and commercial banking business earned $1.63 billion, up from $1.57 billion a year ago, while its U.S. retail operations earned $1.41 billion, up from $1.37 billion in the same quarter last year.
Meanwhile, TD’s wealth management and insurance business earned $563 million, down from $668 million a year ago.
TD’s wholesale banking arm earned $150 million, down from $359 million in the same quarter last year.
Royal Bank of Canada raised its dividend as it reported its second-quarter profit fell compared with a year ago and the amount of money it set aside for bad loans rose.
The bank says it will now pay a quarterly dividend of $1.35 per share, up from $1.32 per share.
The increased payment to shareholders came as RBC says it earned $3.65 billion or $2.58 per diluted share for the quarter ended April 30, down from $4.25 billion or $2.96 per diluted share in the same quarter last year.
Revenue totalled $13.52 billion, up from $11.22 billion in its second quarter last year, while its provisions for credit losses amounted to $600 million compared with a recovery of $342 million a year earlier.
On an adjusted basis, RBC says it earned $2.65 per diluted share in its latest quarter, down from an adjusted profit of $2.99 per diluted share in the same quarter last year.
The average analyst estimate had been for an adjusted profit of $2.79 per share, according to estimates compiled by financial markets data firm Refinitiv.
“Our focused growth strategy, prudent risk and capital management, and diversified business mix exemplify our strength and stability amidst a complex macro environment,” RBC chief executive Dave McKay said in a statement.
“As we continue to realize the benefits of our strategic investments in technology and our incredible talent, we are confident in our ability to slow expense growth and drive greater efficiencies while supporting our clients’ needs.”
RBC said its personal and commercial banking business earned $1.92 billion, down from $2.23 billion a year ago, mainly due to higher provisions for bad loans in the quarter.
Meanwhile, RBC’s wealth management business earned $742 million, down from $809 million in the same quarter last year.
RBC’s insurance operations earned $139 million, down from $206 million in the second quarter last year, while the bank’s capital markets arm earned $939 million in its latest quarter, up from $857 million a year ago.
CIBC posts surprise profit
CIBC was the only bank to post an earnings beat Thursday.
It raised its quarterly dividend as it reported a second-quarter profit of $1.69 billion. The bank said Thursday it will now pay a quarterly dividend of 87 cents per share, up from 85 cents.
The increased payment to shareholders came as CIBC reported its net income amounted to $1.76 per diluted share for the quarter ended April 30, up from $1.52 billion or $1.62 per diluted share a year earlier.
Revenue totalled $5.70 billion, up from $5.38 billion in its second quarter last year, while its provision for credit losses amounted to $438 million, up from $303 million a year earlier.
On an adjusted basis, CIBC says it earned $1.70 per diluted share in its latest quarter, down from an adjusted profit of $1.77 per diluted share in the same quarter last year.
Analysts on average had expected an adjusted profit of $1.63 per share, according to estimates compiled by financial markets data firm Refinitiv.
“In a more fluid economic environment we remain well capitalized and our well-diversified business provides resilience, as we live our purpose of helping make ambitions real in the second half of the fiscal year,” CIBC chief executive Victor Dodig said in a statement.
CIBC said its Canadian personal and business banking earned $637 million in its latest quarter, up from $496 million in the same quarter last year, helped by higher revenue and a lower provision for credit losses, partially offset by higher non-interest expenses.
Meanwhile, the bank said its Canadian commercial banking and wealth management business earned $452 million, down from $480 million a year ago.
CIBC’s U.S. commercial banking and wealth management operations earned $55 million, down from $180 million in the same quarter last year.
The bank’s capital markets arm earned $497 million for the second quarter, down from $540 million a year ago.
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