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TD Bank expects to take a final charge of $125-million related to its anti-money-laundering remediation efforts in the first quarter of 2026.Carlos Osorio/Reuters
Toronto-Dominion Bank TD-T booked fourth-quarter earnings that topped analysts’ estimates as the lender posted a boost in capital markets activity and continued to adjust its U.S. business.
TD’s profit slumped 10 per cent to $3.3-billion, or $1.82 per share, in the three months ended Oct. 31. Adjusted to exclude certain items, including restructuring costs, the bank said profit rose 22 per cent and it earned $2.18 per share. That beat the $2.01 per share analysts expected, according to S&P Capital IQ.
“TD had a strong fourth quarter, delivering robust fee and trading income in our markets-driven businesses as well as volume growth year-over-year in Canadian personal and commercial banking, capping a year of strong performance,” TD chief executive officer Raymond Chun said in a statement.
A breakdown of the big banks’ year-end earnings so far
The bank increased its quarterly dividend to $1.08 per share, up from $1.05 per share.
TD reached its 10-per-cent asset-reduction target as part of its U.S. balance sheet restructuring efforts, which included selling loans to stay under the regulatory asset cap levied on its U.S. retail bank. As of Oct. 31, the total assets in its U.S. business were US$382-billion, well under the US$434-billion asset cap levied by regulators.
“The balance sheet restructuring is to create capacity to support our clients, but to also look at reallocating resources and exiting less profitable businesses,” TD chief financial officer Kelvin Tran said in an interview.
In October, The Globe and Mail reported that TD was laying off staff and staggering its four-day return-to-office mandate as the lender cut costs to address remediation efforts stemming from its anti-money-laundering failings.
The bank took a restructuring charge of $190-million in the quarter, and expects to complete the program with a final charge of $125-million in first quarter of 2026.
The cuts include certain business wind-downs, real estate reductions, and a 3-per-cent work force reduction.
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Toronto-Dominion Bank is the sixth major bank to report earnings for the fiscal fourth quarter. Bank of Nova Scotia BNS-T, Royal Bank of Canada RY-T and National Bank of Canada NA-T posted higher profits that beat analysts’ estimates. Canadian Imperial Bank of Commerce CM-T and Bank of Montreal BMO-T also reported earnings Thursday.
Expenses rose 9 per cent to $8.8-billion, which the bank said was driven by higher employee-related expenses, as well as governance and control investments related to the bank’s anti-money-laundering remediation efforts.
Capital markets profit more than doubled to $494-million from the same quarter last year, as revenue jumped 24 per cent to $2.2-billion across global markets, and corporate and investment banking.
In the bank’s U.S. retail business, net income jumped to 31 per cent to $719-million as TD continues to restructure its balance sheet.
