Earlier this week, data showed the Canadian economy had unexpectedly stalled in the final three months of 2022, bolstering the central bank's case to hold off on further rate hikes if prices eased as expected. "We currently expect net interest margin to moderate for the remainder of fiscal 2023," TD Chief Financial Officer Kelvin Tran said on an earnings call.
Canada's biggest lender Royal Bank of Canada too restated its forecast of a moderate recession this year. On Thursday, TD reported adjusted earnings of C$2.23 per share, higher than C$2.08 a year earlier and beating analysts' average estimate of C$2.20 a share, according to Refinitiv IBES data. Net income at its Canadian personal and commercial banking business grew 7%, while its U.S. retail bank unit posted a growth of 25%.
That helped soften a hit from wealth management and
insurance, where the net income fell 14%.
Contributing to a 58% slump in the bank's overall net profit
was its agreement this week to pay $1.2 billion to resolve a
litigation by former Allen Stanford investors, who had accused
TD of contributing to the imprisoned financier's massive Ponzi
scheme.
Separately, TD said it was not expecting to win regulatory
nod for its $13.4 billion deal for U.S.-based First Horizon Corp by May 27, which is the extended deadline the companies
had set to close the deal.
"We are in discussions with First Horizon about a potential
further extension beyond May 27," TD Chief Executive Officer
Bharat Masrani said.
($1 = 1.3613 Canadian dollars)
(Reporting by Jaiveer Shekhawat and Niket Nishant in Bengaluru;
editing by Uttaresh Venkateshwaran)
