(Bloomberg) -- Toronto-Dominion Bank beat estimates on better-than-expected wealth-management and capital-markets results, capping off an earnings season that saw all of Canada’s big banks benefit from higher trading activity.
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The country’s second-largest lender earned C$2.02 per share on an adjusted basis in its fiscal first quarter, according to a statement Thursday, topping the C$1.95 average analyst estimate. Earnings in its wealth-management and insurance unit totaled C$680 million ($474 million), beating the C$578 million average estimate of three analysts in a Bloomberg survey.
Royal Bank of Canada’s wealth-management division similarly saw net income surge by 48% to C$980 million in the quarter, the company said, reflecting “market appreciation and net sales.” Canada’s biggest bank earned C$3.62 per share on an adjusted basis in the three months through January, beating the C$3.26 average analyst estimate.
Both firms, along with Canadian Imperial Bank of Commerce, also topped expectations at their capital-markets divisions, they said in reports Thursday, concluding earnings season for Canada’s Big Six lenders. That followed a pattern seen in the US, where dealmaking and trading activity boosted large banks’ fourth-quarter results last month. JPMorgan Chase & Co., Goldman Sachs Group Inc. and Bank of America Corp. topped estimates on a surge in fee-based revenue.
Toronto-Dominion Chief Financial Officer Kelvin Tran said his company’s wealth-management operation picked up more customers — and more fee-generating assets — in the period, but also benefited from active markets.
“Market growth is helpful to the fees that we generate,” Tran said in an interview, adding that the bank’s direct-investing business also saw higher trading volume on market volatility. Similar trends lifted its capital-markets unit, he said, noting that the divisions “tend to be correlated in the same way.”
Tariff Uncertainty
The prospect of US tariffs has created massive uncertainty for Canada’s economy, and the country’s lenders have started to reflect that in their provisions for potentially sour loans this quarter.
At Toronto-Dominion, provisions for credit losses last quarter totaled C$1.21 billion, slightly more than the C$1.19 billion analysts had forecast. Bank of Nova Scotia, Bank of Montreal and Royal Bank also all recorded more than C$1 billion in provisions for the period. National Bank of Canada set aside C$254 million for possibly bad loans and CIBC reserved C$573 million.