TD's Q2 2020 Earnings Cut in Half by Significant Reserve Build
The Toronto-Dominion Bank (TD or the Bank) reported Q2 2020 net income of $1.5 billion, a quarter-over-quarter (QOQ) decline of 49%, reflecting substantially higher provisions for credit losses (PCL) caused by the economic impact of the Coronavirus Disease (COVID-19) pandemic and lower oil prices. Positively, the Bank's income before provisions and taxes (IBPT) grew 9% from the linked quarter to $5.0 billion, mainly a result of lower insurance claims, variable compensation, and expenses associated with the U.S. strategic cards portfolio. The Bank experienced lower sequential revenue, with net interest margin compression and reduced customer activity largely affecting both Canadian and U.S. Retail. The Bank reported a higher contribution from TD Ameritrade while Wholesale Banking benefitted from higher debt underwriting fees.
Toronto Dominion Bank provides financial services. Co.'s segments comprised of: Canadian Retail, which include Canadian personal and commercial banking businesses, Canadian credit cards, TD Auto Finance Canada and Canadian wealth and insurance businesses; US Retail, which includes the US personal and commercial banking businesses, US credit cards, TD Auto Finance US, US wealth business and the Bank's investment its subsidiary, TD Ameritrade Holding Corporation; and Wholesale Banking, which provides a range of capital markets, investment banking, and corporate banking products and services. As of Oct 31 2017, Co. had total assets of C$1.28 trillion and total deposits of C$832.82 billion.
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