TD Bank Lifts Dividend 3.7% After Strong Quarter for Operations

By Robb M. Stewart

Toronto-Dominion Bank is lifting its dividend payout, joining other big Canadian banks in returning cash to investors following a strong underlying performance in the latest quarter.

The lender said it would increase its dividend 3.7% for the new quarter. The boost reflects confidence in TD's growth and earnings power, Chief Executive Raymond Chun said.

Chun said the bank logged a strong quarter, with record second-quarter earnings in Canadian personal and commercial banking, all-time high earnings in wealth management and insurance and wholesale banking, and accelerated momentum in U.S. banking, where TD is rebuilding after failings in its anti-money laundering controls that led to a historic settlement with U.S. authorities. Still, earnings were down sharply after the gain last year from the sale of TD's stake in Charles Schwab.

Although up from the previous quarter, TD's net income fell to 4.25 billion Canadian dollars (US$3.07 billion), or C$2.43 a share, in the second quarter from C$11.13 billion, or C$6.27, a year earlier. The prior year's earnings included a nearly C$9 billion gain on the Schwab exit as well as its share of income from the investment.

Per share earnings excluding certain items--which the bank uses to assess its underlying performance--came in at C$2.38, beating the C$2.26 mean estimate of analysts polled by FactSet.

Overall revenue was down 31% year-over-year to C$15.8 billion for the three months to April 30, though on an adjusted basis the bank said revenue increased 5.9%. Net interest income was up 9%, though non-interest income dropped 53% after the year-ago gain on the Schwab sale.

TD, Canada's second largest bank by market value, recorded a provision for credit losses of C$1 billion, C$38 million lower than in the prior quarter and C$340 million lower than last year. Analysts had expected about C$1.09 billion to have been set aside in the quarter against the risk of loans defaulting.

The bank will pay a dividend of C$1.12 a share, an increase of C$0.04, on or after July 31 to shareholders of record at the close of business July 10.

TD's capital position remains strong. Its common equity Tier 1 capital ratio stood at 14.3% as of the end of April, down slightly from 14.5% the quarter before. Canada's banking regulator requires the big lenders to maintain a capital ratio of at least 11.5% of risk-weighted assets.

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

May 28, 2026 07:51 ET (11:51 GMT)