TD Bank Earnings Reports

*Adjusted diluted earnings per share

A bank’s total assets consist of four components: total loans, total securities, cash and cash equivalents, and other assets. The chart below provides a breakdown of TD Bank's total assets into these key components over time.

Loans are the largest component, consistently occupying the majority of the asset base. This indicates TD Bank’s primary function as a lender, relying heavily on loan portfolios to generate income. Securities are also a significant portion of assets, and have steadily grown over time. A notable increase in cash and cash equivalents can be seen in 2020, signalling defensive, or cautious, capital preservation in the wake of COVID-19.

This stacked bar chart displays the proportional breakdown of TD Bank's total assets. Since 2011, TD’s loans have consistently made up around 50% to 60% of the bank’s total assets, while securities made up 20-30% of total assets. In 2020, over 11% of TD’s total assets were in cash and cash equivalents, compared to less than 4% pre-COVID, which highlights TD Bank’s defensive position during the pandemic, prioritizing liquidity and low-risk investments.

From Q3 2016 to Q4 2024, TD’s reported net income averaged $2,979 million per quarter, while adjusted net income averaged slightly higher at $3,216 million, indicating the presence of regular adjusting items in the bank's financial reporting.

The reported net income shows dramatic swings, reaching a peak of $6,671 million in Q4 2022 and dropping to a low of -$181 million in Q3 2024. These extreme variations are notably smoothed out in the adjusted figures, which ranged from a low of $1,599 million during the pandemic-affected Q2 2020 to a high of $4,154 million in Q1 2023. The latest quarter (Q4 2024) shows reported net income growing 26.8% year-over-year, while adjusted net income declined by 8.0% year-over-year.

TD Bank's revenue is composed of net interest and non-interest income. It has shown some trends in the balance between net interest income and non-interest income over the period from 2016 to 2024. During the pre-pandemic period (Q3 2016 to Q1 2020), the bank maintained a relatively stable split, with net interest income averaging $5,554 million (57.8%) and non-interest income averaging $4,054 million (42.2%) per quarter. This traditional banking model, where interest income from loans and other interest-bearing assets provided the majority of revenue, was fairly consistent during this period.

The most recent period (2023-2024) has shown a gradual shift toward non-interest income. Notably, both revenue streams have still grown substantially in absolute terms, with several quarters showing particularly strong non-interest income performance, such as Q4 2022 with $7,933 million and Q4 2024 with $7,574 million. The data suggests TD has been successful in growing its fee-based and other non-interest revenue streams while maintaining strong net interest income despite varying interest rate environments.

There’s a progressively widening gap between the market capitalization of RBC versus TD, Canada’s largest and second-largest banks. During the pre-pandemic period (2016-2019), the market cap difference between the two banks was relatively modest, with RBC maintaining an average lead of $12 billion. TD averaged $129 billion in market cap, while RBC averaged $141 billion. During this period, the gap between the two banks was relatively stable and, at times, narrowed to as little as $4-5 billion.

The pandemic period (2020-2021) marked the beginning of a more pronounced divergence. While both banks experienced significant volatility, RBC's average market cap of $158.58 billion compared to TD's $138.25 billion represented a widened average gap.

The most recent period (2022-2024) has seen a dramatic expansion of this valuation gap. RBC's average market cap of $190 billion significantly outpaced TD's $154 billion, creating an average gap of $36 billion. Most notably, the gap has accelerated dramatically in recent quarters, reaching an unprecedented $103.50 billion by Q4 2024. This represents a fundamental shift in how the market values these two institutions, with RBC's market cap ($238.2 billion) now being nearly double TD's ($134.7 billion).

Between Q3 2016 to Q1 2020, TD’s total net write-offs and allowance for credit losses (ACL) steadily increased, with TD tending to see a spike in provision for credit losses (PCL) each Q4 in 2016, 2017, 2018, and 2019. That pattern has changed since the pandemic.

Provision for Credit Losses (PCL) highlights changes in TD's expectations for future credit losses. PCL was high at $2.18 billion in Q3 2020, reflecting pandemic-related concerns, but it turned negative by Q2 2021 (-$377 million), signalling confidence in economic recovery and improved loan performance. From Q3 2022 onward, PCL began to rise again, reaching $1.11 billion by Q4 2024, which indicates growing caution.

Allowance for Credit Losses (ACL), representing TD’s total reserves for potential future credit losses, shows a steady decline from $9.23 billion in Q3 2020 to $6.92 billion in Q3 2022. However, this trend reversed afterward, with ACL increasing to $9.14 billion by Q4 2024, showing that TD is bolstering its reserves as credit risks rise.

TD Bank's loan growth has largely been driven by strong performance in Canada and a recovery in the U.S., while international lending played a limited and more volatile role. TD’s Total Gross Loans and Acceptances experienced consistent growth from Q3 2020 to Q3 2024, increasing from $746 billion in Q3 2020 to $957.9 billion in Q4 2024.

Loans in Canada made up the largest share of the total loan portfolio, growing steadily from $475.7 billion in Q3 2020 to $630.3 billion in Q4 2024.

Loans in the U.S., which represent TD's second-largest loan category, displayed a more volatile trend. Starting at $259.8 billion in Q3 2020, U.S. loans initially decreased through 2021, bottoming out at $221.1 billion in Q4 2021. However, this trend reversed in 2022, with U.S. loans reaching $317.4 billion by Q4 2024. Now that the Office of the Comptroller of Currency (OCC) has capped TD’s retail assets in the US, it would have very limited ability to grow its loan book in the US.

Loans in all other countries remained a much smaller segment of TD’s loan portfolio, fluctuating between $9 billion and $18.7 billion during the period. The loans peaked at $18.7 billion in Q4 2022 but returned to $10.2 billion by Q4 2024, playing just a minor role in TD’s overall lending strategy.

Looking at the data from Q3 2016 through Q4 2024, gross loans and acceptances have increased from $591.2 billion to $957.9 billion, while net loans grew from $571.6 billion to $949.5 billion.

The difference between these two metrics has averaged around $22.5 billion over this period, though it has notably decreased in recent quarters, decreasing to $8.3 billion by Q4 2024 (representing about 0.87% of gross loans and acceptances). This narrowing gap is particularly interesting because, with acceptances becoming less common in the Canadian financial system, this difference increasingly represents primarily the allowance for credit losses (ACL).

This trend suggests improved credit quality in the loan portfolio, resulting in lower required loss provisions. The relatively small and decreasing gap between gross and net loans (less than 1% by Q4 2024) indicates strong overall credit quality in TD’s loan portfolio.

Total residential mortgages outstanding at TD have shown steady growth over the period, increasing to $331.6 billion in Q4 2024. The most significant growth occurred between 2020 and 2023, with some cooling in 2024.

Total credit card loans grew from $32.6 billion in Q3 2020 to $40.6 billion by Q4 2024.

Total business and government loans saw fluctuations but a steady upward trajectory overall. There was a spike during the pandemic before reaching a low of $240.1 billion in Q4 2021 and rebounding strongly afterwards. By Q4 2024, business and government loans grew to $357.2 billion.

Total personal loans, a smaller portion of TD’s loan portfolio, remained relatively stable. From $18.7 billion in Q3 2020 to $21.0 billion in Q4 2024.

TD’s total deposits have generally grown from 2020 to 2024, starting at $1.09 trillion in Q3 2020 and reaching $1.27 trillion by Q4 2024. However, there have been some fluctuations, particularly a dip in Q2 and Q3 2023.

Deposits in Canada also showed consistent growth. Beginning at $646.6 billion in Q3 2020, Canadian deposits rose steadily, reaching $790.8 billion in Q4 2024. However, that’s a large quarterly dip from $826.2 billion in Q3 2024.

Deposits in the U.S. reached $556.4 billion in Q4 2024, while deposits in other countries reached $80.1 billion.