On Thursday, Toronto-Dominion Bank reported gaining higher profits in the third-quarter amid the increasing expenses and low corporate level income. Due to the profit increase, the Canadian lender is considering to buy more high-quality U.S. assets, which would create sustainable value.
The third-quarter profit increase of Toronto-Dominion Bank was boosted by the incomes in its domestic retail and capital market divisions. According to Reuters, the lender's gross impaired loans from its pipelines, oil and gas portfolio increased 59 percent to C$35 million compared to the second-quarter profit, which is C$22 million.
With the help of loan growth and insurance business strength, Toronto-Dominion Bank's Canadian retail division profits have also increased by 11 percent as well as their wholesale banking division, which was attributed to the upsurge in trading, mergers and acquisitions fees.
While staying strong in its retail financial services in Canada and the United States, Toronto-Dominion Bank's three main divisions were partially offset by higher expenses and lower income at the corporate level. As per CBC News, its net profit was valued at $1.19 per share and adjusting earnings were $1.20 per share.
Due to a combination of higher expenses and lower income, net loss climbed to $204 million or $161 million after adjustments at the corporate level. It means that it rose from $70 million or $53 million after adjustments a year earlier.
Meanwhile, Toronto-Dominion Bank Chief Financial Officier Colleen Johnston said the Canadian lender is considering the idea of acquiring "strategically compelling" financial assets in the United States as the company concentrates on its internal growth.
"If there are asset acquisitions out there that are high quality and would create sustainable value for TD, we would consider them," 57-year-old Johnston told Bloomberg Business on Thursday. "We do have an opportunity in the U.S. because we have a very large deposit franchise."
"If there are acquisitions of any type that are very financially and strategically compelling, we would always consider them if it made sense for our shareholders," Johnston added. "Our primary focus at TD is on organic growth. We have lots of opportunities to grow the bank and optimize our operations. We've had a lot of growth -- we've quadrupled our earnings in the last 10 years, so we've got lots of opportunities organically."
Canada's largest lender by assets, Toronto-Dominion Bank, has spent about $17 billion building a branch network from Maine to Florida in the past decade. The bank has also decided to acquire U.S. credit-card portfolios, including those of Target Corp. and Nordstrom Inc.
Speaking of high-quality assets, Toronto-Dominion Bank is reportedly interested in U.S. commercial lending businesses that General Electric Co. is selling. In order to refocus on manufacturing, GE has been selling about $200 billion of finance assets as it departs the lending business realm.
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