TD BANK GROUP • SECOND QUARTER 2025 •
EARNINGS NEWS RELEASE
Page 14
Quarterly comparison – Q2 2025 vs. Q2 2024
U.S. Retail reported net income for the quarter
was $120 million (US$89 million), a decrease
of $387 million (US$290 million), or 76%
(77% in U.S. dollars),
compared with the second quarter last
year. On an adjusted basis, net income for the quarter
was $967 million (US$680 million), a decrease
of $232
million
(US$205 million), or 19% (23%
in U.S. dollars). The reported and adjusted
annualized ROE for the quarter were 1.1%
and 8.8%, respectively, compared with 4.7%
and 11.0%, respectively, in the second quarter last year.
U.S. Retail net income includes contributions
from the U.S. Retail Bank and the Bank’s investment
in Schwab. Reported net income for the
quarter from the
Bank’s investment in Schwab was $78 million (US$54
million), a decrease of $105 million (US$82
million), or 57% (60% in U.S. dollars),
compared with the second
U.S. Retail Bank reported net income
was $42 million (US$35 million), a decrease
of $282
million (US$208 million), or 87% (86% in
U.S. dollars), compared
with the second quarter last year, primarily reflecting the impact
of U.S. balance sheet restructuring
activities, higher governance and control investments,
including
costs for U.S. BSA/AML remediation,
and higher PCL, partially offset by the impact of
the charges for the global resolution of the investigations
into the Bank’s
U.S. BSA/AML program, and FDIC special
assessment charge, in the second quarter
last year. U.S. Retail Bank adjusted net income was $889
million
(US$626 million), a decrease of $127
million (US$123 million), or 13% (16% in
U.S. dollars), compared with the second quarter
last year, reflecting higher
governance and control investments, including
costs for U.S. BSA/AML remediation, and
higher PCL, partially offset by higher revenue.
Reported revenue for the quarter was US$1,830
million, a decrease of US$710 million, or 28%,
compared with the second quarter last
year. On an adjusted
basis, revenue for the quarter was US$2,618
million, an increase of US$78 million, or 3%.
Reported net interest income of US$2,136
million, increased
US$42 million, or 2%, and adjusted net interest
income of US$2,161 million, increased US$67
million, or 3%, driven by the impact of U.S. balance
sheet
restructuring activities and higher deposit
margins, partially offset by the adjustment related
to certain deferred product acquisition
costs (the “deferred cost
adjustment”). Reported net interest
margin of 3.00% increased 1 basis point,
and adjusted net interest margin of 3.04%
increased 5 bps, due to the impact of U.S.
balance sheet restructuring activities and higher
deposit margins, partially offset by maintaining
elevated liquidity levels (which negatively impacted
net interest
margin by 8 bps) and the deferred cost adjustment.
Reported non-interest loss was US$306
million, a decrease of US$752 million,
compared with the second
quarter last year, reflecting the impact of U.S. balance sheet
restructuring activities, partially offset by higher
fee income. On an adjusted basis, non-interest
income of US$457 million increased US$11 million, or 2%, compared
with the second quarter last year, reflecting higher fee income.
Average loan volumes decreased US$6 billion,
or 3%, compared with the second quarter
last year. Personal loans decreased 2% and business
loans
decreased 4%, reflecting U.S. balance sheet
restructuring activities. Excluding the impact
of the loan portfolios identified for sale
or run-off under our U.S. balance
sheet restructuring program, average loan
volumes increased US$3 billion, or 2%
9,10
. Average deposit volumes decreased US$7 billion, or
2%, reflecting a 7%
decrease in sweep deposits and a 4% decrease
in business deposits, partially offset by a 3% increase
in personal deposits.
Assets under administration (AUA) were
US$45 billion as of April 30, 2025, an increase
of US$5 billion, or 13%, compared
with the second quarter last year,
reflecting net asset growth. Assets under
management (AUM) were US$9 billion as
of April 30, 2025, an increase of US$2 billion,
or 29%, compared with the
second quarter last year.
PCL for the quarter was US$311 million, an increase of US$31
million compared with the second quarter
last year. PCL – impaired was US$216 million, a
decrease of US$13 million, or 6%, largely recorded
in the consumer lending portfolios. PCL
– performing was US$95 million, an increase
of US$44 million
compared to the prior year. The performing provisions this quarter
largely reflect credit impacts from policy
and trade uncertainty, including overlays and an update
to our macroeconomic forecasts, partially
offset by lower volume. U.S. Retail PCL including
only the Bank’s share of PCL in the U.S. strategic
cards portfolio, as an
annualized percentage of credit volume
was 0.70%, an increase of 10 bps compared
with the second quarter last year.
Effective the first quarter of 2025, U.S. Retail segment
non-interest expenses include certain U.S.
governance and control investments, including
costs for U.S.
BSA/AML remediation which were previously
reported in the Corporate segment.
Comparative amounts have been reclassified
to conform with the presentation
adopted in the current period.
Reported non-interest expenses for the quarter
were US$1,644 million, a decrease of US$336
million, or 17%, compared to the
second quarter last year, reflecting the impact of charges for
the global resolution of the investigations
into the Bank’s U.S. BSA/AML program, and
the FDIC
special assessment charge, in the second
quarter last year, partially offset by higher governance and control
investments including costs of US$110 million for
U.S. BSA/AML remediation,
and higher employee-related expenses, in
the current quarter. Our governance and control investments
in this quarter were higher
compared to the second quarter last year as
remediation efforts progressed over this period.
On an adjusted basis, non-interest expenses
increased US$189
million, or 13%, reflecting higher governance
and control investments, including
costs for U.S. BSA/AML remediation, and
higher employee-related expenses.
The reported and adjusted efficiency ratios for
the quarter were 89.8% and 62.8%, respectively, compared with 78.0%
and 57.3%, respectively, in the second
quarter last year.
Quarterly comparison – Q2 2025 vs. Q1 2025
U.S. Retail reported net income was $120
million (US$89 million), a decrease of $222
million (US$158 million), or 65% (64% in
U.S. dollars), compared with the
prior quarter. On an adjusted basis, net income for the
quarter was $967 million (US$680 million),
a decrease of $71 million (US$56 million),
or 7% (8% in U.S.
dollars). The reported and adjusted annualized
ROE for the quarter were 1.1% and 8.8%,
respectively, compared with 2.9% and 8.6%, respectively, in the prior
The contribution from Schwab of $78
million (US$54 million) decreased $121 million
(US$88 million), or 61% (62% in U.S.
dollars), compared with the prior
quarter.
U.S. Retail Bank reported net income
was $42 million (US$35 million), a decrease
of $101
million (US$70 million), or 71% (67% in U.S.
dollars) compared with
the prior quarter, primarily reflecting the impact of U.S. balance
sheet restructuring activities and higher PCL,
partially offset by the impact of fewer days in
the
current quarter. U.S. Retail Bank adjusted net income was $889
million (US$626 million), an increase of $50
million (US$32 million), or 6% (5% in U.S.
dollars),
compared to the prior quarter, primarily reflecting lower expenses,
lower PCL, and higher non-interest income.
Reported revenue was US$1,830 million,
a decrease of US$132
million, or 7%, compared with the prior quarter. On an adjusted
basis, revenue was
US$2,618 million, an increase of US$4
million, relatively flat, compared with the
prior quarter. Reported net interest income of US$2,136
million decreased
US$24 million, or 1%, driven by the deferred
cost adjustment,
and fewer days in the quarter, partially offset by the impact of
U.S. balance sheet restructuring
activities. On an adjusted basis, net interest
income was US$2,161 million, relatively flat
compared with the prior quarter, as the impact of U.S. balance
sheet
restructuring activities was offset by the deferred
cost adjustment,
and fewer days in the quarter.
Reported net interest margin of 3.00% increased
14 bps, and
adjusted net interest margin of 3.04% increased
18 bps, compared with the prior quarter, due to impact of
U.S. balance sheet restructuring activities,
normalization
of elevated liquidity levels (which positively impacted
net interest margin by 11 bps), and higher deposit margins, partially
offset by the deferred cost adjustment.
Net interest margin in the third quarter is expected
to deliver substantial expansion, reflecting
the benefits from ongoing U.S. balance
sheet restructuring activities
9
Loan portfolios identified for sale or run-off include the point of sale finance business which services third
party retailers,
correspondent lending, residential jumbo mortgage, export and
import lending, commercial auto dealer portfolio, and other non-core portfolios. Q2 2025 average loan volumes:
US$187 billion (Q1 2025: US$193
billion; 2025 YTD: US$190 billion;
Q2 2024: US$193
billion; 2024 YTD: US$192 billion). Q2 2025 average loan volumes of loan portfolios identified for sale or
run-off: US$31 billion (Q1 2025: US$37 billion; 2025 YTD:
US$34 billion; Q2 2024: US$40 billion; 2024 YTD: US$40 billion). Q2 2025 average loan volumes excluding loan
portfolios identified for sale or run-off: US$156 billion (Q1 2025:
US$156 billion; 2025 YTD: US$156 billion; Q2 2024: US$153
billion; 2024 YTD: US$152
billion).
10
For additional information about the Bank’s use of non-GAAP financial measures, refer to “Non-GAAP and Other Financial Measures” in the “How We Performed” section of this . Reported non-interest loss was US$306 million, compared with reported non-interest loss of US$198 million
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