TD Bank fails to meet expectations as U.S. sanctions sting
Toronto-Dominion Bank on Thursday reported a fourth-quarter profit, but couldn’t meet analyst expectations in its first financial release since being sanctioned in the United States for failing to monitor money laundering activities.
Net income for the three-month period ending Oct. 31 was $3.6 billion compared to $2.9 billion during the same period last year and a loss of $181 million in the previous quarter. This resulted in net earnings per share of $1.97.
Adjusted for certain conditions, the bank earned $3.2 billion, which is lower than the $3.5 billion earned a year ago, resulting in earnings per share of $1.72. Analysts had expected TD to earn $1.81 per share.
The miss was primarily due to a decline in TD’s retail business in the U.S., which had net income of $863 million compared to $1.27 billion a year ago.
TD reported adjusted total revenue of $14.9 billion, up from $13.2 billion during the same period last year.
“Despite a challenging quarter, we are pleased with the bank’s underlying fundamentals, which were reflected in our revenue growth,” Bharat Masrani, the bank’s chief executive who is set to leave his post next year, said in a statement. “This quarter, we delivered higher fee income in our markets-related businesses, volume growth in Canada, and stable deposits in the U.S.”
This is the TD’s first quarterly report after the bank was fined about US$3.1 billion and ordered to cap the expansion of its retail banking business in October by the U.S. Department of Justice and other regulators for failing to monitor money laundering activities at its branches.
The fine was expected — TD had kept aside the money beforehand — but the cap was a bit of a surprise.
After the charges were announced, TD unveiled a
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