Aug Canada’s second-biggest lender TD Bank Group fell short of analysts’ estimates for quarterly profit on Thursday, hurt by higher provisions for loan losses and sluggish growth in its domestic retail unit.
Top banks in the country, including bigger rival Royal Bank of Canada and Bank of Montreal, have seen their provisions, amount set aside to cover bad loans, rise significantly due to elevated household debt loads.
Total provisions at TD Bank jumped 17% to C$655 million in the third quarter ended July 31, as provisions at the domestic retail unit soared 28%.
Net income at the unit rose 2% to C$1.89 billion, while its US retail business recorded a 13% rise in net income to C$1.29 billion.
The bank’s net income rose 4.6% to C$3.25 billion ($2.45 billion), or C$1.74 per share from last year.
On an adjusted basis, the lender earned C$1.79 per share. Analysts had expected earnings per share of C$1.80, according to IBES data from Refinitiv.