Adjusted earnings in the latest quarter totalled $2.09 a share, beating analysts estimates of $2.04
reported lower third-quarter earnings as costs rose faster than revenue and the bank set aside more loan loss provisions, but is starting to reap the benefits of rising interest rates in its core retail banking operations.
But TD’s earnings were affected by an interest rate hedging strategy implemented as the bank works to close its US$13.4-billion acquisition of U.S.-based bank First Horizon Corp., which created a net loss of $678-million. In the fiscal third quarter, TD set aside $351-million in provisions, which was less than expected. Of that, $11-million was earmarked against loans that are still being repaid.
TD is the most sensitive to interest rates of the major Canadian banks, and as central banks have rapidly increased benchmark rates, TD’s profit margins on loans are increasing. The bank’s U.S. net interest margin increased by 46 basis points year over year, and its Canadian margin was up 9 basis points. .