Toronto-Dominion Bank (TD) has announced its financial results for the fourth quarter ending October 31, 2024. The bank reported a 26.8% increase in reported earnings to $3.6 billion, while adjusted earnings fell by 8% to $3.2 billion.
Key Financial Metrics:
| Metric | Q4 2024 | Q3 2024 | Q4 2023 | YoY Change | QoQ Change | Consensus Estimate |
|---|---|---|---|---|---|---|
| Total Revenue (Reported) | $15.51B | $14.18B | $13.18B | +17.7% | +9.4% | $14.72B |
| Earnings Per Share (Reported) | $1.97 | ($0.14) | $1.48 | +33.1% | N/A | $2.00 |
| Earnings Per Share (Adjusted) | $1.72 | $2.05 | $1.82 | -5.5% | -16.1% | $1.85 |
The financial performance indicates strong revenue growth, driven by higher fee income and volume growth in Canada. However, the adjusted earnings per share fell short of expectations, reflecting challenges in the U.S. operations and increased provisions for credit losses.
Segment Performance:
| Segment | Revenue (Q4 2024) | Revenue (Q4 2023) | YoY Change | Previous Guidance |
|---|---|---|---|---|
| Canadian Personal & Commercial | $5.06B | $4.75B | +6.5% | Met |
| U.S. Retail | $3.21B | $3.52B | -8.8% | Below |
| Wealth Management & Insurance | $3.94B | $2.96B | +33.1% | Exceeded |
| Wholesale Banking | $1.77B | $1.49B | +18.8% | Met |
The Canadian Personal and Commercial Banking segment delivered strong results with record revenue, while the U.S. Retail segment faced challenges due to higher provisions for credit losses and non-interest expenses. Wealth Management and Insurance saw significant growth, driven by reinsurance recoveries and higher premiums.
Operational Highlights:
- The bank resolved its U.S. AML matters, which was a key development this quarter.
- TD's Common Equity Tier 1 Capital ratio stood at 13.1%.
Comments from Company Officers:
Bharat Masrani, Group President and CEO, stated, 'Despite a challenging quarter, we are pleased with the Bank's underlying fundamentals, which were reflected in our revenue growth.'
Dividends and Share Repurchase Program:
TD announced a quarterly dividend of $1.02 per share, consistent with the previous quarter. The bank did not announce any new share repurchase programs.
Forward Guidance:
TD has suspended its medium-term financial targets, including 7-10% adjusted EPS growth, 16%+ return on equity, and positive operating leverage, citing a transition year in 2025.
Stock Price Movement:
Following the earnings release, TD's U.S.-listed shares fell by 6.7%, reflecting investor concerns over the bank's challenges in the U.S. market and the suspension of growth targets.
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