TD beats estimates on capital markets strength

financialpost.com:

Toronto-Dominion Bank beat analysts’ estimates on an increase in revenue driven by strength in both its capital-markets unit and growth in loans and deposits in the lender’s domestic retail business.

The lender earned $2 a share on an adjusted basis in the fiscal first quarter, it said in a statement Feb. 29, ahead of the $1.94 average estimate of analysts in a Bloomberg survey. It reported total revenue of $13.7 billion for the three months through January, beating forecasts of $12.2 billion.

Toronto-Dominion, which acquired United States investment bank Cowen Inc. last March, joined rival Royal Bank of Canada in getting a boost from capital markets. Earlier this week, Royal Bank also reported results that beat analysts’ estimates as stronger-than-expected performance from capital markets and wealth management countered an increase in loan-loss provisions and higher expenses.

“Record revenue this quarter shows the potential of the combined power of this franchise, with TD Securities and TD Cowen,” Toronto-Dominion chief financial officer Kelvin Tran said, adding that the bank saw a lift in equity-trading commissions and fee income from underwriting.

Toronto-Dominion’s shares rose one per cent to $81.38 at 10 a.m. in Toronto. They’ve slipped 4.8 per cent this year, more than the 2.4 per cent decline in the S&P/TSX commercial banks index.

The bank’s provisions for credit losses totalled $1 billion, more than the $944.1 million analysts had forecast.

The Canadian lender recorded a charge of $411 million before taxes tied to a special assessment by the United States Federal Deposit Insurance Corp. related to bank failures. Royal Bank, Canadian Imperial Bank of Commerce and Bank of Montreal recorded similar charges for the