TD profit slips on weaker wholesale banking
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Second-quarter profit at TD Bank Financial Group fell 3.1 per cent as "challenging financial market conditions" hurt results in its wholesale banking division, TD said Wednesday.
The institution said its Q2 net income was $852 million ($1.12 a share), down from $879 million ($1.20 a share) in the same quarter a year earlier.
"I would characterize our second quarter as slightly disappointing but quite acceptable in the context of what's happening in the markets," TD chief executive Ed Clark said in a release.
The earnings failed to meet analysts' forecasts. Their consensus was that Canada's third-biggest bank would report a profit of $1.40 a share excluding one-time items, according to Thomson Financial. TD actually made $1.32 a share once one-time items were excluded.
The bank said profit at its wholesale banking division plunged 57 per cent to $93 million. TD blamed a tough capital markets environment that generated lower trading revenues, lower investment banking fees and smaller security gains.
Profits at its retail banking operations in both Canada and the U.S. were strong, it said. Canadian personal and commercial banking earnings rose eight per cent to $582 million, while earnings at its U.S. personal and commercial banking division quadrupled to $100 million.
Things weren't as rosy in the wealth management division, where profit fell eight per cent to $182 million.
TD said wealth management revenues fell six per cent because of lower commission fees at TD Waterhouse. The discount broker lowered its standard commission for many trades from $29 to as little as $7 last year.
Overall revenues for the whole TD financial group fell three per cent to $3.39 billion in the quarter. TD also boosted its provision for credit losses by 34 per cent to $191 million.
Clark said the bank doesn't expect to see its earnings grow this year over last year.
TD is the third bank to report lower Q2 earnings this week. BMO and Scotiabank revealed their lower bottom lines on Tuesday.
TD shares gained 26 cents to close at $68.70 in TSX trading.
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