Toronto-Dominion Bank (The): Q1 2022 financial results: lower provisions and solid loan growth led to higher earnings - Moody's Global Credit Research

Toronto-Dominion Bank (The): Q1 2022 financial results: lower provisions and solid loan growth led to higher earnings

Toronto-Dominion Bank (The): Q1 2022 financial results: lower provisions and solid loan growth led to higher earnings - Moody's Global Credit Research
Toronto-Dominion Bank (The): Q1 2022 financial results: lower provisions and solid loan growth led to higher earnings
Published Mar 03, 2022
5 pages (2739 words) — Published Mar 03, 2022
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...In Q1 2022, The Toronto-Dominion Bank (TD) reported net income of CAD3,733 million, generating an annualized return on risk weighted assets (RWAs) of 3.14%, up 35 basis points (bps) from last year as net income increased 14% (Exhibit 1) and RWA growth was 1%. Return on equity increased to 15.3% from 14.3%, over the same period. Earnings growth in the quarter was driven by lower provisions for credit losses (PCL), which declined 77% year over year to CAD72 million due to a more favorable economic outlook and improved credit conditions. Pre-tax pre-provision income was up 7%, year over year on strong revenue growth. These quarterly results were credit-neutral and broadly in line with our expectations. Net interest income increased 5% as loans rose 5%, particularly in residential mortgages. Non-interest income increased 4% on higher fee based revenue in TD's wealth management and banking segments as well as increased insurance volumes. In Wholesale Banking revenue increased 3% on higher loan...

  
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Toronto-Dominion Bank (The)
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Toronto-Dominion Bank (The): Update to credit analysis - Credit Opinion – 2022/10/28 – US$ 250.00 – ...Toronto-Dominion Bank (The)'s (TD) very high ratings are supported by its strong domestic retail franchise as well as its overall retail-oriented business mix, which generates stable and recurring profits. TD has leading domestic market share positions in many personal & commercial (P&C) financial services products, where the bank typically has a first or second market share position. TD generates approximately 90% (5-year average) of its earnings from its retail businesses, which includes Canadian P&C, wealth management, insurance, and US P&C (excluding its corporate segment), making TD the most retail-oriented bank of its Canadian peers. TD also has a US East Coast regional banking franchise through TD Bank, N.A. that has scale, stable profitability and a strong deposit base and provides it with geographic diversification. TD's announced its USD13.4 billion acquisition of First Horizon Corporation (First Horizon) that is expected to close in the first quarter of fiscal 2023, will extend...

Toronto-Dominion Bank (The): Q3 2022 financial results: Strong loan growth and margin expansion mitigates higher provisions and challenging markets - Issuer Comment – 2022/08/26 – US$ 200.00 – ...This report was republished on 1 September 2022 with a corrected net loss amount resulting from TD's de-designating of hedge accounting for certain interest rate swaps related to the bank's announced acquisition of First Horizon...

Toronto-Dominion Bank (The): TD acquisition of Cowen Inc. would expand its US investment banking business, a credit negative - Issuer Comment – 2022/08/03 – US$ 200.00 – ...) announced it had signed a definitive agreement to acquire Cowen Inc. (Cowen, Ba3 Corporate Family Rating review for upgrade), a US independent dealer, for approximately $1.3 billion in cash. While this transaction will allow TD to accelerate its strategic US growth plans by providing the bank with new capabilities and increased depth in key business lines, it increases its involvement in capital markets activities, which we view as credit negative because these activities are generally higher-risk than TD's other business activities. TD expects the transaction to close in the first calendar quarter of 2023 subject to approval from Cowen's stockholders as well as customary regulatory approvals. On a proforma basis, based on our calculations, TD's overall revenue contribution from Wholesale Banking will increase to 15% from 11% for year-end 2021, not including the impact from the bank's pending acquisition of First Horizon Corporation (First Horizon, A3/Baa3 review for upgrade, baa2...

Toronto-Dominion Bank (The): Q2 2022 financial results: Loan growth and margin expansion drive solid quarterly performance - Issuer Comment – 2022/05/26 – US$ 200.00 – ...In Q2 2022, The Toronto-Dominion Bank (TD) reported net income of CAD3,811 million, generating a strong annualized return on risk weighted assets (RWAs) of 3.2%, down three basis points (bps) from last year, as net income increased 3% (Exhibit 1) and RWAs grew 7.5%. Return on equity slightly decreased to 16.4% from 16.7% over the same period. Earnings growth this quarter was driven by strong loan growth and higher fee- based revenue, partially offset by higher provisions for credit losses (PCL), and increased non-interest expenses and insurance claims. Pre-tax pre-provision income was up 16.2% year over year, reflecting strong growth in the Canadian Personal and Commercial Banking, and US Retail segments. Overall, these credit-neutral results were broadly in line with our expectations. Net interest income(NII) increased 9.3% year over year, reflecting robust loan and deposit growth in the personal and commercial banking segments, as well as higher trading net interest income, partially...

Toronto-Dominion Bank (The): Update following ratings affirmation - Credit Opinion – 2022/03/08 – US$ 250.00 – ...Toronto-Dominion Bank (The)'s (TD) very high ratings are supported by its strong domestic retail franchise and retail-oriented business mix, which generate stable and recurring profits. This credit strength results from TD's leading market share positions in a number of personal & commercial (P&C) financial services products, where it typically has first or second market share positions. TD is the most retail-oriented of its Canadian peers, with approximately 90% of earnings over the past 5 years coming from its retail businesses (combined Canadian personal & commercial, wealth management, insurance and US personal & commercial, excluding its corporate segment). TD's creditors also benefit from the bank's disciplined, retail oriented management culture, which has yielded exceptional risk-adjusted returns over time, which we recognize with a one-notch positive qualitative adjustment for Corporate Behavior in our scorecard. In recent years, TD has increased its exposure to unsecured Canadian...

Toronto-Dominion Bank (The): Update to credit analysis - Credit Opinion – 2022/02/03 – US$ 250.00 – ...Toronto-Dominion Bank (The)'s (TD) very high ratings are supported by its strong domestic retail franchise and retail-oriented business mix, which generate stable and recurring profits. This credit strength results from TD's leading market share positions in a number of personal & commercial (P&C) financial services products, where it typically has first or second market share positions. TD is the most retail-oriented of its Canadian peers, with approximately 90% of earnings over the past 5 years coming from its retail businesses (combined Canadian personal & commercial, wealth management, insurance and US personal & commercial, excluding its corporate segment). In recent years, TD has increased its exposure to unsecured Canadian consumer credit risk through both acquisitions and organic growth. High consumer leverage and elevated housing prices put downward pressure on TD's credit profile. However, the strength and stability of the pre-provision earnings from TD's Canadian P&C banking...

Toronto-Dominion Bank (The): Q4 2021 financial results: provision reversals, strong fee income and loan growth drive strong quarterly profit - Issuer Comment – 2021/12/02 – US$ 200.00 – ...In Q4 2021, The Toronto-Dominion Bank (TD) reported net income of CAD3,781 million, generating an annualized return on risk weighted assets (RWAs) of 3.26%, down 100 basis points (bps) from last year, when results included the CAD2.3 billion gain on the sale of the bank's investment in TD Ameritrade. Excluding this non-recurring item, return on RWAs was up 86 bps as net income increased 31% (Exhibit 1) and RWAs declined by 4%. Return on equity increased to 16.1% from 13.3%, over the same period. Earnings growth in the quarter was mostly driven a CAD123 million reversal of provisions for credit losses (PCL) compared to the CAD917 million of provisions recorded in the same period last year. However, pre-tax pre-provision income (PPI) was up 6%, year over year. These quarterly results were credit-neutral, as on balance were broadly in line with our expectations and have no ratings implications. Net interest income increased 4% (up 6% excluding last year's gain on the sale of TD Ameritrade)...

Toronto-Dominion Bank (The): Q3 2021 financial results: credit neutral quarter driven by provision reversals with capitalization at top of peer group - Issuer Comment – 2021/08/26 – US$ 200.00 – ...The Toronto-Dominion Bank (TD) reported Q3 2021 net income of CAD3,545 million, generating an annualized return on risk weighted assets (RWAs) of 3.02%, up 116 bps from last year as net income increased 58% (Exhibit 1) and RWAs declined by 3%. Return on equity increased to 15.3% from 10% last year. Earnings growth was mostly driven a CAD37 million reversal of provisions for credit losses (PCL) compared to the CAD2.2 billion in provisions last year. Net interest income fell 2% on lower margins in the retail banking segments, partially offset by volume growth in Canadian personal and commercial banking. Non-interest income rose 3% on higher fee based revenue in the retail and wealth businesses as well as increased insurance volumes. Conversely, Wholesale Banking non- interest income was down 48% as trading related revenue decreased from the highs set last year. Pre-tax pre-provision income (PPI) was down 6% due largely to a 6% increase in non-interest expenses from an increase in the retailer...

Moody's rates Baa1 (hyb) TD's additional tier 1 limited recourse capital notes - Rating Action – 2021/07/22 – US$ 180.00 – ...MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS, AND PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS OR PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER. ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT. MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT...

Toronto-Dominion Bank (The): Update following rating action and publication of the updated Banks methodology - Credit Opinion – 2021/07/15 – US$ 250.00 – ...On 12 July 2021, we took action on Toronto-Dominion Bank (The)'s (TD) ratings and assessments driven by revisions to our Advanced Loss Given Failure (Advanced LGF) framework following the publication of our updated Banks methodology. TD's very high ratings are supported by its strong domestic retail franchise and retail oriented business mix, which generate stable and recurring profits. This credit strength results from TD's leading market share positions in a number of personal & commercial (P&C) financial services products, where it typically has first or second market share positions in the low twenties. TD is the most retail-oriented of its Canadian peers, with approximately 90% of earnings coming from retail (combined Canadian personal & commercial, wealth management, insurance and US personal & commercial, excluding corporate) over the past 5 years. Through acquisitions and organic growth, TD has increased its exposure to unsecured Canadian consumer credit risk in recent years. High...

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Moody's Global Credit Research—Moody's Investors Service, a leading global credit rating, research and risk analysis firm, publishes credit opinions, research, and ratings on fixed-income securities, issuers of securities and other credit obligations. Credit ratings and research help investors analyze the credit risks associated with fixed-income securities. Ratings also create efficiencies in fixed-income markets and similar obligations, such as insurance and derivatives, by providing reliable, credible, and independent assessments of credit risk. For issuers, Moody's services increase market liquidity and may reduce transaction costs.

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MLA:
Moody's Global Credit Research. "Toronto-Dominion Bank (The): Q1 2022 financial results: lower provisions and solid loan growth led to higher earnings" Mar 03, 2022. Alacra Store. Jul 23, 2024. <http://www.alacrastore.com/moodys-credit-research/Toronto-Dominion-Bank-The-Q1-2022-financial-results-lower-provisions-and-solid-loan-growth-led-to-higher-earnings-PBC_1320879>
  
APA:
Moody's Global Credit Research. (). Toronto-Dominion Bank (The): Q1 2022 financial results: lower provisions and solid loan growth led to higher earnings Mar 03, 2022. New York, NY: Alacra Store. Retrieved Jul 23, 2024 from <http://www.alacrastore.com/moodys-credit-research/Toronto-Dominion-Bank-The-Q1-2022-financial-results-lower-provisions-and-solid-loan-growth-led-to-higher-earnings-PBC_1320879>
  
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