TD Bank Group reported record adjusted earnings for the third quarter of fiscal 2026, exceeding internal targets across all major business segments as the Canadian lender posted a 26% year-over-year increase in adjusted earnings per share to CAD 2.77.
Adjusted net income rose to CAD 4.7 billion, while adjusted revenue grew 8% to CAD 16.9 billion, according to the bank’s earnings presentation released on August 27. Adjusted return on equity climbed to 16.0%, up 280 basis points from the prior year and surpassing the fiscal 2026 target of approximately 13%. Pre-tax, pre-provision profit advanced 16.9% year-over-year on an adjusted basis, while the efficiency ratio improved to 55.2%.
Credit provisions declined, with total provisions for credit losses falling to CAD 917 million from CAD 1.0 billion in the prior quarter. The bank’s common equity tier 1 ratio stood at 14.3%, while the leverage ratio was 4.5% and the liquidity coverage ratio reached 133%. TD repurchased approximately 14.5 million shares during the quarter, reducing its CET1 ratio by 37 basis points.
Canadian Personal & Commercial Banking net income rose 7% year-over-year to CAD 2.1 billion, with revenue up 5% and net interest margin expanding to 2.88%. Digital sales for core products increased 17% year-over-year, while small business and commercial client acquisition grew 13% and 10%, respectively. The segment’s return on equity reached 32.3%.
U.S. Banking net income surged 39% year-over-year to USD 771 million, driven by a 13% reported revenue increase. Net interest margin expanded to 3.47%, while core loans rose 3% quarter-over-quarter. Wealth Management & Insurance net income climbed 20% to CAD 841 million, with assets under management up 13% to CAD 644 billion and assets under administration rising 17% to CAD 831 billion. The segment’s return on equity reached 49.0%.
Wholesale Banking net income jumped 87% year-over-year to CAD 743 million, with revenue up 25% to CAD 2.6 billion. Global Markets revenue increased 23%, while Corporate & Investment Banking revenue rose 21%. The bank also highlighted progress in its AI transformation initiative, delivering approximately CAD 195 million in AI-driven value year-to-date, with a medium-term target of CAD 500 million in annualized revenue uplift and cost savings.
TD reiterated its fiscal 2026 guidance, targeting an adjusted ROE of approximately 13%, 6-8% adjusted EPS growth, and a CET1 ratio of 13% or higher. The bank expects to return more than CAD 13 billion in capital through share buybacks in fiscal 2027, with its CET1 ratio projected to reach 13% by the second half of that year. Medium-term targets include an adjusted ROE of approximately 16%, 7-10% adjusted EPS growth, and a dividend payout ratio of 40-50% by fiscal 2029.
Chief Executive Raymond Chun stated that TD is "on track to significantly outperform" its fiscal 2026 EPS growth and ROE targets, assuming current macroeconomic conditions hold. Chief Risk Officer Ajai Bambawale noted that the bank may be "past peak credit losses," though he stopped short of making a definitive call.
