TD Bank, formally known as Toronto-Dominion Bank (TSE:TD, Mkt cap 100.67B, P/E 13.30, Div/yield 0.51/3.75, EPS 4.09, Shares 1.85B) said it will be “fitter and faster” going forward after posting fiscal second-quarter profit that fell 6.5% on a year-over-year basis as a restructuring charge took its toll.
As Bloomberg News reports, the $228 million charge related to cost-cutting in the U.S. and Canada forced net income for the period ended April 30 down to $1.86 billion, or 97 cents a share, from $1.99 billion, or $1.04, a year earlier.
Excluding extraordinary items, adjusted earnings were $1.14 a share, surpassing the $1.11 average estimate of 14 analysts surveyed by Bloomberg. Analysts polled by Thomson Reuters were also expecting a similar return.
The Toronto-based lender pointed to cost-cutting measures such as “process redesign and business restructuring” in the quarter, as well as retail branch and real estate “optimization”.
This was evident in the firm’s headcount for the quarter, which stood at 330 employers fewer than the first quarters, with reductions in both Canadian and U.S. retail banking.
“The organizational and productivity changes we are making will enable us to become fitter and faster, to better meet our customers’ expectations, and adapt to the low-growth economic environment,” chief executive officer Bharat Masrani said in the statement.
Meanwhile, revenue climbed up 4.4% to $7.76 billion in the 12-month period, exceeding analysts’ estimates.
Broken down further, Toronto-Dominion’s U.S. operations reported adjusted profit of $626 million, up from $548 million the year previous. Canadian retail adjusted profit, which comprises wealth management and insurance, increased 6.4% to $1.44 billion, whilst wholesale-banking adjusted earnings jumped up 19% to $246 million.
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