TD Bank (TD) Q2 2025 earnings summary

Executive summary

• Reported net income for Q2 2025 was $11.1B, up 334% year-over-year, driven by the sale of Schwab shares; adjusted net income was $3.6B, down 4% year-over-year.

• Reported diluted EPS was $6.27 (vs. $1.35 last year); adjusted diluted EPS was $1.97 (vs. $2.04), with reported EPS surging over 100% year-over-year and adjusted EPS declining 3%.

• Strong trading and fee income, deposit and loan growth in Canadian Personal and Commercial Banking, and robust performance in Wealth Management and Insurance supported results.

• Strategic actions included the sale of Schwab shares, $9B in correspondent loans, and the wind-down of the U.S. point-of-sale financing business.

• U.S. balance sheet restructuring and AML remediation remain top priorities, with significant progress on asset reduction and investment portfolio repositioning.

Financial highlights

• Q2 2025 reported revenue was $22.9B (up from $13.8B); adjusted revenue was $15.1B (up from $13.9B); revenue growth driven by Schwab sale and higher trading and fee income.

• Provision for credit losses (PCL) was $1.34B, up from $1.07B year-over-year, with increases due to policy and trade uncertainty.

• CET1 ratio rose to 14.9%, up 177 bps sequentially, supported by the Schwab sale and internal capital generation.

• Repurchased 30M shares under NCIB; $8B from Schwab sale allocated to buybacks.

• Gross impaired loans decreased quarter-over-quarter, but up 25% year-over-year; impaired PCLs down quarter-over-quarter.

Outlook and guidance

• U.S. balance sheet restructuring and investment portfolio repositioning expected to complete by H1 2025, targeting NII benefit at the upper end of $300M–$500M pre-tax.

• Fiscal 2025 expense growth expected at the upper end of 5–7%, reflecting investments in governance, control, and business growth.

• U.S. AML remediation and related investments projected at ~$500M pre-tax in both fiscal 2025 and 2026.

• NIM expansion anticipated in Q3 2025, with positive NII trajectory expected through 2026.

• Strategic review update and refreshed medium-term financial targets to be provided at investor day in September 2025.