The bank had warned of the
"It was a strong quarter for TD with all of our businesses outperforming expectations," said chief executive
Despite repeated questioning from analysts, the bank didn't provide any new information such as timelines or expected penalties on the multiple investigations it faces in the
"We have freely shared all information we have with the
Were it not for the money laundering issue, which the bank has already spent
The bank reported net income of
Adjusting for the charges and other outliers, TD said it earned
The results, helped by a 10 per cent rise in revenue to
"A big beat with a big asterisk," wrote Scotiabank analyst
While the
The possibility remains though. According to a report by the
The seriousness of the allegations means the bank's cumulative fines could easily hit
The Globe and Mail reported late Wednesday that the bank also faces orders from
Masrani pushed back against the report, saying the bank is in constant dialogue with regulators.
"It is unfortunate that the report contains inaccuracies and misrepresents our normal course, business-as-usual interactions with Canadian regulators.”
The Office of the Superintendent
The regulator did, however, point to recent comments by superintendent
Higher costs related to anti-money laundering issues come as the bank winds down a restructuring program that saw it cut about three per cent of staff.
Charges for the program announced in November will total about
Dechaine said in a note that he reads the bank's comments on the cost savings as offsetting anti-money laundering costs, at least partially.
He said the financial results were neutral as the better-than-expected earnings could be partially explained by a large hedge gain, compared with a typical loss. Higher capital markets also helped, he said.
Overall, Dechaine said the cost overhang from anti-money laundering efforts will affect the bank's capital and ability to buy back shares, and so downgraded the bank's rating to underperform.
"It could get tougher before it gets better," he wrote.
TD's provisions for credit losses of
Impaired provisions were up 58 per cent from last year to
The bank's total provisions for the quarter amounted to about 0.47 per cent of its credit volume.
Masrani said the bank, with a capital ratio of 13.4 per cent, has the capital buffers to address uncertain market conditions and various scenarios that may play out this quarter.
He said the bank is well positioned for a slower economy and will benefit from higher interest rates for longer, while focusing on the biggest tasks at hand.
"We delivered significant positive operating leverage, while continuing to execute on our restructuring program and prioritizing investments in our risk and control infrastructure."
This report by The Canadian Press was first published
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