TD Bank (TD) Q3 2024 earnings summary

Executive summary

• Adjusted net income for Q3 2024 was $3.65 billion, flat year-over-year; reported net loss was $181 million due to a $3.6 billion AML provision.

• Canadian Personal and Commercial Banking delivered record net income and revenue, up 13% and 9% year-over-year, respectively.

• U.S. Retail reported a net loss of $2.28 billion, driven by the AML provision; adjusted net income was $1.29 billion, down 6% year-over-year.

• Wealth Management and Insurance posted record revenue, but net income was flat due to higher claims from severe weather.

• Wholesale Banking net income rose 17% year-over-year, with revenue up 14%.

Financial highlights

• Q3 2024 adjusted diluted EPS was $2.05, up from $1.95 last year; reported diluted EPS was $(0.14) versus $1.53.

• Total revenue for Q3 2024 was $14.18 billion, up 10% year-over-year.

• Provision for credit losses in Q3 was $1.07 billion, up from $766 million year-over-year.

• Common Equity Tier 1 (CET1) ratio stood at 12.8%, down from 15.2% last year, impacted by AML provision and share buybacks.

• Adjusted ROE for Q3 was 14.1%; reported ROE was -1.0%.

Outlook and guidance

• Management expects to finalize the AML-related regulatory resolution by year-end and continues to invest in risk and control infrastructure.

• Fiscal 2024 adjusted expense growth expected in the high single digits, driven by risk and control investments, strong market-related business performance, and litigation.

• Downward pressure on Canadian net interest margin expected in Q4 due to BA to CORRA migration and Bank of Canada rate cuts.

• U.S. Retail Bank expects modest NIM expansion in Q4, partially offset by potential Fed rate cuts.

• AML remediation program is a multi-year effort, with peak expenses anticipated in early 2025.