TD Bank (TD) Q2 2026 earnings summary

Executive summary

• Q2 2026 delivered adjusted EPS of $2.38, up 21% year-over-year, and adjusted net income of $4.2 billion, with robust performance and record earnings across Canadian Personal and Commercial Banking, Wealth Management and Insurance, and Wholesale Banking.

• U.S. Banking showed strong momentum, with adjusted net income up 8% year-over-year (12% in USD), and all segments contributed to positive operating leverage for the fourth consecutive quarter.

• Announced a 4 cent dividend increase to $1.12 per share and repurchased approximately 19 million shares in Q2, reflecting confidence in future growth.

• Structural cost reductions and accelerated investments in AI and innovation are ahead of schedule, supporting digital leadership and operational efficiency.

• CET1 ratio at 14.3%, with strong organic capital accretion and ongoing share buybacks.

Financial highlights

• Adjusted EPS up 21% year-over-year; adjusted net income up 15% year-over-year to $4.2 billion; adjusted ROE at 14.4% (+210 bps YoY); CET1 ratio at 14.3%.

• Adjusted revenue up 6% year-over-year; adjusted expenses up 5% year-over-year, mainly due to variable compensation, FX, and business growth investments.

• Adjusted PTPP up 12% year-over-year; efficiency ratio (adjusted, net of ISE) at 57.0%.

• Provision for credit losses (PCL) stable at $1,001 million or 43 basis points, with impaired PCLs decreasing quarter-over-quarter.

• Dividend payout ratio (adjusted) was 45.0% for Q2 2026.

Outlook and guidance

• On track to outperform 6%-8% adjusted EPS growth and 13% ROE targets for fiscal 2026, assuming stable macro conditions.

• Fiscal 2026 PCLs expected to fall within 40-50 basis points; adjusted expense growth guidance is 3%-4%.

• Net interest margin expected to remain stable in Canadian P&C and modestly increase in U.S. Banking for Q3 2026.

• CET1 ratio expected to reach approximately 13% by October 31, 2027.

• AML remediation costs expected to moderate in the second half, with significant milestones through 2027.