Toronto-Dominion Bank’s (TD) fiscal third-quarter profit declined 8% to $1.99 per share as the lender set aside more money to cover bad loans.
TD’s profit missed analysts’ consensus forecast of $2.04 a share. However, the bank said that its revenue in fiscal Q3 rose about 7% to $13.01 billion due to loan growth and higher margins.
TD said it set aside $766 million to cover potentially bad loans in the quarter ended July 31, about 4% more than analysts had anticipated.
Canada’s second largest bank said its earnings were also negatively impacted by a $306 million charge related to the termination of its acquisition of U.S. lender First Horizon Corp. (FHN).
TD had struck a deal to buy Tennessee-based First Horizon, but the transaction fell apart in May after the bank said it couldn’t secure approval from regulators, and amid the collapse of several regional lenders in America.
Net income in the bank’s wealth management and insurance units during Q3 declined by 12% year-over-year to $504 million.
Earlier this year, TD withdrew its target to increase earnings per share by 7% to 10% over the medium-term.
The stock of Toronto-Dominion Bank has declined 2% over the past 12 months to trade at $83.36 a share.
