(Adds interview with chief financial officer, further detail)
By Jeffrey Hodgson
TORONTO Aug 28 Toronto-Dominion Bank reported a
stronger-than-expected quarterly profit on Thursday, boosted by
gains at its core Canadian retail business and the impact of
buoyant capital markets on its investment banking and trading
Canada's second-largest lender said its net income rose to
C$2.1 billion ($1.93 billion) or C$1.11 per share, in the third
quarter ended July 31, from C$1.52 billion, or 79 Canadian cents
a share, a year earlier.
Excluding special items, earnings were C$1.15 a share.
Analysts had expected C$1.09 per share, according to Thomson
Profits at its Canadian retail arm jumped 54 percent to
C$1.4 billion from a year earlier, when the company's insurance
operation was hit with heavy claims from floods in Ontario and
But the division also benefited from the purchase of part of
the lucrative Aeroplan Visa credit card portfolio from Canadian
Imperial Bank of Commerce.
The pace of lending growth in Canada has slowed down,
something the bank has anticipated for a number of years and
views as healthy, but is unlikely to slip further in the
near-term, said Colleen Johnston, TD Bank's chief financial
"I think today's run rate is about where we'll be for a
little while. I don't see anything dramatically different going
forward," she told Reuters.
She said that while Canadian housing prices are probably
overvalued by up to 10 percent, they look unlikely to drop near
term and are more likely to come under pressure if Canadian
interest rates begin to rise next year.
Profit at TD's U.S. retail banking operation, which includes
more than 1,300 branches on the eastern seaboard, rose 4 percent
to C$485 million. Johnson said lending there is likely to
continue to grow at an 8 percent rate over the next few years.
TD wouldn't rule out some tuck-in acquisitions to expand its
U.S. network, but is more focused on internal growth and will
open another 30 U.S. branches this year, she said.
Wholesale banking income, which includes trading, investment
banking and advisory businesses, rose 46 percent to C$216
million, boosted by "robust" capital markets and trading
activity, the bank said.
(1 US dollar = 1.0855 Canadian dollar)
(Editing by Chizu Nomiyama)