Insurance Headwinds Knock TD Bank's Profits 10% Lower

By MarketsFOXBusiness

Toronto-Dominion Bank (NYSE:TD) posted a 10% decline in fiscal third-quarter profits on Thursday amid severe weather-inspired insurance losses, but the Canadian lender still managed to exceed expectations.

Continue Reading Below

Shares of Canada's second-largest bank edged narrowly higher on the earnings beat and a 5% increase to the company’s dividend payout.

The company said it earned C$1.53 billion, or C$1.58 a share, compared with a profit of C$1.70 billion, or C$1.78 a share, a year earlier.

Excluding one-time items, TD earned C$1.65 a share, easily besting consensus calls from analysts for C$1.55.

TD’s results were hurt by an 18% slump in wholesale banking earnings to C$147 million amid declining trading revenue.

More On This...

As was previously disclosed, TD’s insurance arm suffered an after-tax loss of $243 million due to charges of $418 million that were triggered by severe weather claims and rising general insurance claims.

“Our third quarter results reflect very strong performances in our Canadian banking, wealth and U.S. banking businesses, offset by losses previously announced in our insurance business,” TD CEO Ed Clark said in a statement.

Meanwhile, TD said its board signed off on plans to raise its quarterly dividend to 85 Canadian cents a share, up from 81 cents earlier. The dividend is payable on and after October 31 to shareholders of record as of the close of business on October 3.

Toronto-based TD saw its shares inch 0.49% higher to $84.00 ahead of Thursday’s opening bell. The muted response mirrors TD’s virtually unchanged performance on the year and over the past 12 months.