TD Reports 20% Increase in Quarterly Earnings and Reaffirms 2019 Earnings Targets

The Toronto-Dominion Bank said it expects to reach a profit growth target of 7-10% in 2019 after posting a slightly higher than badysts' expectations on Thursday.

Earnings per share, excluding special items, increased 20% to $ 1.63 for the quarter ended October 31, compared with $ 1.36 a year ago. Analysts on average expected earnings of $ 1.62, according to Refinitiv's IBES data.

Canada's second largest market-based lender, with significant US operations, said net income, excluding special items, increased 17% to $ 3.05 billion in the first quarter. .

TD benefited from rising interest rates in the United States and Canada, which helped TD improve its net interest margin (NIR), the difference between the interest it receives from borrowers and that it brings back to the savers.

In an interview, Chief Financial Officer Riaz Ahmed said the economic situation was healthy and rising rates in the US and Canada gave banks confidence in realizing profits within the limits of the economy. 39, previously set target, which was 7% to 10%.

The bank's NIM has increased two basis points to 1.68% by October 31, and Ahmed expects further improvement in 2019, despite increased competition for customer deposits.

"We should expect, in this context of rising rates, that net interest margins will continue to grow until 2019," he said.

The bank's Canadian retail business grew 5% in the fourth quarter to $ 1.74 billion, thanks to the improved market share of mortgages.

Mortgage sales increased 4% in the fourth quarter, with average one-digit growth expected in 2019, Ahmed said.

In the United States, TD's retail business grew net income by 44% to $ 1.14 billion, driven by higher margins resulting from higher interest rates and higher margins. beneficial tax reforms.

For the past year, TD reported net income of $ 12.2 billion, up 15% from last year.