Toronto Dominion Bank (The)
TD · NYSE
Next quarter
Expected to report Dec 3, 2026 — estimated from last year’s reporting date.
Consensus is $1.83 EPS for Oct 2026 across 3 estimates, ranging $1.78 to $1.89.
TD Jul 2026
- 13.79%
- $1.74
- $1.98
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- —
Highlights
- Earnings beat: Reported diluted EPS was $2.74, up from $1.89 a year ago, while adjusted diluted EPS was $2.77, up 26% year over year; the supplied consensus was $1.74.
- Broad-based profit growth: Reported net income rose 38% to $4.615 billion and adjusted net income increased 21% to $4.671 billion, with adjusted net income up 12% from the prior quarter.
- Wholesale Banking acceleration: Net income reached a record $743 million, up 87% reported and 76% adjusted year over year, on 25% revenue growth and a 16.7% ROE.
- U.S. Banking recovery: Net income was $1.074 billion, up 41% reported and 12% adjusted year over year; adjusted ROE improved to 10.2% from 8.9%.
- Canadian franchise momentum: Canadian Personal and Commercial Banking delivered record revenue of $5.517 billion and net income of $2.095 billion, up 5% and 7%, respectively.
- Wealth and Insurance strength: Net income increased 20% to $841 million, with assets under administration up 17% to $831 billion and assets under management up 13% to $644 billion.
- Credit costs eased: Provision for credit losses fell to $917 million from $1.001 billion in the prior quarter and $971 million a year ago; fiscal 2026 PCL is now expected near the lower end of the 40–50 basis-point range.
- Capital and distributions: CET1 was 14.3%, unchanged from the prior quarter, while TD repurchased 14.5 million shares for $2.4 billion in Q3 and had completed $5.4 billion of its $7 billion 2026 buyback authorization by July 31.
- AML investment remains material: Fiscal 2026 U.S. BSA/AML remediation and related governance spending is now expected at approximately US$550 million pre-tax, up from prior guidance of US$500 million.
Analysis
TD’s third quarter was a strong, broad-based operating print, led by record Wholesale Banking results, better U.S. Banking profitability and continued Canadian retail momentum. Reported diluted EPS was $2.74 versus $1.89 a year ago, while adjusted EPS was $2.77 versus $2.20. Reported net income rose 38% to $4.615 billion and adjusted net income increased 21% to $4.671 billion. Adjusted earnings also improved 12% from the second quarter, when adjusted net income was $4.168 billion. The supplied consensus EPS was $1.74, implying a material beat, although the release reports the Canadian-dollar diluted EPS figures above.
Revenue increased 10% year over year to $16.885 billion, supported by 9% growth in net interest income and 12% growth in reported non-interest income. Credit costs declined to $917 million, or 0.37% of net average loans, while the adjusted efficiency ratio improved to 55.2% from 57.8% a year ago. The main caveat is that expenses continue to absorb investment in growth and controls: adjusted expenses rose 4%, with U.S. AML remediation costs contributing to the increase, and fiscal 2026 remediation guidance rose to approximately US$550 million. Capital remained strong at a 14.3% CET1 ratio despite share repurchases and balance-sheet growth.
Wholesale Banking momentum
Wholesale Banking was the quarter’s standout earnings contributor. Revenue rose 25% year over year to $2.581 billion, driven by higher lending revenue, underwriting fees and trading-related revenue. Net income reached a record $743 million, up 87% reported and 76% adjusted, while ROE increased to 16.7% from 9.3% a year ago. The result also benefited from lower PCL, which fell to $41 million from $71 million, although expenses rose 7% to $1.594 billion as variable compensation and front-office costs increased.
- Trading activity: Trading-related revenue increased to $975 million from $873 million a year ago, while trading revenue was positive on 95% of trading days and no daily loss exceeded VaR.
- Sequential improvement: Revenue increased 8% from the second quarter and net income rose 21%, helped by higher trading and advisory revenue and a $37 million sequential reduction in PCL.
U.S. Banking recovery
U.S. Banking continued to demonstrate improving earnings power as margins and the balance sheet mix supported profitability. Net income was $1.074 billion, or US$771 million, up 41% reported and 12% adjusted year over year. Adjusted revenue increased 5% in U.S. dollars to US$2.987 billion, while the net interest margin rose 28 basis points to 3.47%.
- Core volume trend: Reported average loans declined 4% to US$174 billion because of portfolios being sold or run off, but core average loan volumes increased 3% to US$165 billion year over year.
- Better returns: ROE improved to 10.2% from 8.9% on an adjusted basis and from 7.1% on a reported basis a year ago; the efficiency ratio was 61.3% versus 65.3% reported last year.
- Strategic cards: The Nordstrom portfolio conversion increased TD’s share of revenue and credit losses, with conversion costs contributing to higher expenses in the quarter.
- Credit and wealth: U.S. PCL was US$227 million, or 0.53% of credit volume, down 7 basis points sequentially. U.S. AUM increased 20% year over year to US$12 billion, while AUA rose 2% to US$47 billion.
Canadian franchise growth
Canadian Personal and Commercial Banking delivered record revenue and earnings, with higher loan and deposit volumes combining with improved margins. Revenue rose 5% year over year to $5.517 billion and net income increased 7% to $2.095 billion. The segment’s 32.3% ROE remained exceptionally high, while its efficiency ratio improved to 38.6% from 39.4%.
- Volume-led NII growth: Net interest income increased 7% to $4.528 billion. Average loans rose 5%, including 4% personal-loan growth and 8% business-loan growth; average deposits increased 2%.
- Margin expansion: Net interest margin increased 5 basis points to 2.88%, with management expecting a modest further increase in the fourth quarter based on current rates and competitive conditions.
- Credit mix: PCL increased $15 million year over year to $478 million as consumer credit migration raised impaired provisions, but the segment’s PCL ratio declined 1 basis point to 0.30%.
Wealth and Insurance scale
Wealth Management and Insurance produced record revenue and earnings, although insurance claims were a sequential headwind. Net income increased 20% year over year to $841 million, with Wealth Management contributing $653 million, up 25%, and Insurance contributing $188 million, up 3%. Segment ROE rose to 49.0% from 44.7%.
- Asset growth: AUA increased $122 billion year over year to $831 billion and AUM rose $72 billion to $644 billion, reflecting market appreciation and net asset growth.
- Client engagement: New accounts increased 26% year over year and average daily trades at TD Direct Investing rose 20%.
- Insurance volatility: Insurance service expenses rose 5% year over year and 18% sequentially to $1.646 billion, mainly because of higher estimated catastrophe losses and claims frequency; catastrophe claims included $117 million in the quarter.
Credit, capital and controls
The quarter combined lower group credit costs with strong capital and continued heavy investment in regulatory remediation. Total PCL declined 5% year over year and 8% sequentially, while gross impaired loans fell 4% year over year to $5.143 billion. The allowance for credit losses was $9.559 billion, or 0.96% of gross loans.
- PCL outlook: Fiscal 2026 PCL is now expected near the lower end of TD’s previous 40–50 basis-point range, although management continues to cite economic, trade and borrower-specific uncertainty.
- Capital deployment: CET1 remained at 14.3%, while total assets increased to $2.112 trillion and net loans rose to $991.0 billion. TD expects CET1 to reach approximately 13% by October 31, 2027.
- Buybacks and dividends: TD repurchased 14.5 million common shares for $2.4 billion in Q3 and 37.7 million shares for $5.4 billion year to date under its $7 billion NCIB. The quarterly common dividend was increased to $1.12 per share from $1.08.
- AML remediation: U.S. BSA/AML remediation and related governance and control investments are now expected to cost approximately US$550 million pre-tax in fiscal 2026, with significant milestones remaining through 2026 and 2027. The enterprise-wide AML remediation remains a multi-year process and FINTRAC’s review is ongoing.
