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(Bloomberg) -- Toronto-Dominion Bank rose after reporting earnings that topped estimates and unveiling a restructuring plan to curb costs that included workforce reductions.
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The bank will cut about 2% of its workforce, or roughly 2,000 jobs, as part of the program it started in the second quarter. The restructuring will cost up to C$700 million ($505 million) on a pre-tax basis over the next several quarters, TD said in a statement Thursday.
The bank expects to deliver about C$100 million in pre-tax savings this fiscal year from the effort and annual savings of up to C$650 million beyond that. TD’s average number of full-time equivalent staff rose to 101,272 at the end of April, it said in its financial results.
The bank’s shares climbed as much as 4.4% on Thursday, the biggest intra-day gain since mid-January, after it reported earnings that surpassed analyst predictions. It earned C$1.97 per share on an adjusted basis in its fiscal second quarter, beating the C$1.78 average forecast.
The firm also set aside C$1.34 billion to cover souring loans for the three months through April, less than the C$1.41 billion analysts predicted. That was despite what Chief Executive Officer Raymond Chun called a “high degree of macroeconomic and policy uncertainty” on US tariffs.
“There are no quick fixes to the challenges our country is confronting,” Chun said on a call with analysts. While he’s optimistic that talks with the US will be productive in the wake of Canada’s recent federal election, “this is going to take time and considerable effort,” he said.
Chun took over as CEO in February and has embarked on a strategic review in the wake of TD agreeing to pay almost $3.1 billion to settle with US authorities last year over anti-money-laundering failures. The firm is also constrained from growing its American retail assets and has said it will direct new capital spending to its domestic banking and capital-markets operations.
Toronto-Dominion will announce its revised strategy and new financial targets at an investor day on Sept. 29, it said Thursday.
Kelvin Tran, the bank’s chief financial officer, said the cost-cutting program is part of the strategic review and is aimed at finding efficiencies in part by automating processes.