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Toronto-Dominion Profit Falls on Higher Loan Losses

Business Materials 25 February 2009 23:37 (UTC +04:00)

Toronto-Dominion Bank, the first Canadian bank to report earnings this year, said profit fell, topping estimates, as it set aside money for bad loans amid the recession. It was the fourth straight quarterly decline, Bloomberg reported.

Net income in the quarter ended Jan. 31 fell 27 percent to C$712 million ($567 million), or 82 cents a share, from C$970 million, or C$1.33, a year earlier, the Toronto-based bank said today in a statement. Revenue climbed 15 percent to C$4.15 billion.

Canada's second-biggest bank by assets said loan-loss provisions more than doubled to C$537 million, mostly from its consumer-banking units in Canada and the U.S. Bad loans will probably lead to an average profit decline of 12 percent for the country's six biggest lenders this quarter, according to Scotia Capital analyst Kevin Choquette. That would be the biggest drop since the third quarter of 2002, he said.

"This is clearly the story of 2009: deterioration in credit quality and the loan-loss provisions that accompany that," said Craig Fehr, an analyst at Edward Jones & Co. in St. Louis. "TD has the biggest U.S. bank exposure, which does cause some issues. That's where credit quality is deteriorating the quickest."

Toronto-Dominion rose C$1.11, or 3.2 percent, to C$36.36 in 1:57 p.m. trading on the Toronto Stock Exchange. The shares have fallen 18 percent this year.

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