TORONTO — TD Bank (TSX:TD) executives are optimistic the bank’s business plan will withstand the slow economic recovery, but they’re also warning that the pickup could challenge its divisions throughout much of next year.
The caveat came as the bank reported Thursday that profits were flat in the fourth quarter compared with a year ago, as it booked nearly twice as much in provisions for credit losses.
“What we’re wrestling with now is how long the recovery will take and what that means to us as we recover, in effect, what kind of recovery we’re going to have,” chief executive Ed Clark told analysts in a quarterly earnings call on Thursday.
“We do see upside when the headwinds and the low margins and the higher PCLs (provisions for credit losses) begin to ease.”
The bank said fourth-quarter profits totalled $1.01 billion compared with $1.014 billion a year earlier, for the three months ended Oct. 31.
On a per-share basis, net income was $1.12, down from $1.22 last year, but adjusted earnings were up, rising to $1.46 from 79 cents per share in the fourth quarter of 2008, ahead of analyst expectations.
Revenue climbed by more than $1 billion, hitting $4.7 billion from $3.6 billion a year earlier, in line with analyst estimates compiled by Thomson Reuters.
Provision for credit losses rose to $521 million from $288 million in the year-earlier period, but that was down from the $557 million it reported in the prior quarter ended July 31.