TD Profit beats analysts’ estimates as Canadian loans rise

The Toronto-Dominion Bank, which earlier this week announced a $13.4 billion acquisition to expand into the United States, has benefited from the growth in domestic lending.

Total revenue for the bank’s Canadian retail unit reached C$6.72 billion ($5.32 billion) in the fiscal first quarter, up 5.9% from last year. previous year, the Toronto-based company announced Thursday. The overall profit exceeded analysts’ estimates.

Toronto-Dominion has staked much of its future on expanding its retail banking business in the United States. On Monday, it announced an agreement to buy First Horizon Corp. — its biggest acquisition ever — to fill its footprint in the Southeast. The deal comes as Toronto-Dominion benefits from stronger borrowing trends among consumers and businesses nationwide, with average personal loan totals up 7.8% in the three months to January. , while business loans increased by 14%.

“We’re seeing strong activity,” chief financial officer Kelvin Tran said in an interview. “Customer confidence is back, and we’ve seen that momentum build for a few quarters now.”

Toronto-Dominion’s performance in the US last quarter was more subdued. Total revenue for the US unit rose 5.5% from a year earlier to $2.2 billion, held back by an 11% decline in business loans. Commercial lending in the United States has been constrained by the continued repayment of Paycheck Protection Program loans, Tran said.

“There’s still a lot of liquidity in the United States, and as the liquidity decreases, you expect loan growth,” Tran said.

Toronto-Dominion shares fell 2.7% to C$98.71 at 2:05 p.m. Toronto. Stocks are up 1.8% this year, compared to a 4.7% gain for the S&P/TSX Commercial Banks Index.

Credit card balances in the United States, which increased 5.6% from the fourth quarter, were a bright spot. This is the strongest quarter-over-quarter growth since the first three months of fiscal 2020, before the pandemic spread across North America. Total personal loans increased by 0.1% over the previous year.

With the purchase of First Horizon, Toronto-Dominion will add 412 branches and more than 1.1 million personal and business customers in 12 states. The Memphis, Tennessee-based lender has a large presence in its home state and Louisiana, as well as locations in Florida, the Carolinas and Virginia, and “hitch points” in Atlanta, Dallas and Houston, Toronto-Dominion said Monday.

The deal, which has yet to be approved by regulators, would move Toronto-Dominion beyond its current footprint on the U.S. East Coast and make its U.S. franchise one of the six largest banks in the country, with approximately $614 billion in assets.

This article was provided by Bloomberg News.