The Toronto-Dominion Bank

TD reported record earnings of $4.7 billion and record EPS of $2.77 in Q3 2026. Revenue rose 8% year over year, driven by markets businesses, margin expansion, and volume growth in Canadian Personal and Commercial Banking. ROE was 16%, up 280 basis points year over year, and the efficiency ratio, net of ISE, was 55.2%. Expenses increased 4% year over year, with about 3% driven by variable compensation, FX, and the U.S. strategic cards portfolio; excluding those items, expenses were up 1% year over year. Impaired PCLs were $865 million, down $108 million quarter over quarter, and total PCLs were 37 bps, down 6 bps quarter over quarter. CET1 ended at 14.3%, down 3 bps sequentially. Looking ahead, management expects total PCLs in fiscal 2026 near the lower end of the prior 40 to 50 bps range. In Canadian Personal and Commercial Banking, management expects Q4 net interest margin to modestly increase. In U.S. Banking, management continues to expect approximately USD 2.9 billion in net income for fiscal 2026 and Q4 NIM to modestly increase. Leo Salom also said overall U.S. AML remediation expenses for the year are expected to be approximately $550 million.

Raymond Chun framed the quarter as evidence that TD is executing across growth, efficiency, and capital deployment. He emphasized record earnings in Canadian businesses and Wholesale Banking, growing momentum in U.S. Banking, and what he called significant flexibility to invest in organic growth while still returning capital. His tone was confident and upbeat, but he also acknowledged added uncertainty from Canada-U.S. trade tensions and said TD is positioned to support clients through it.

Kelvin Tran said the bank delivered record performance with 8% top-line growth and strong execution across Wholesale, Wealth, and P&C. He highlighted that expenses rose 4% year over year, but discipline and structural cost reductions supported positive operating leverage; the efficiency ratio was 55.2% and total bank PTPP was up 17% year over year after adjustments. He also noted strong deposit and loan growth in Canada, U.S. Banking NIM of 3.47% with expectations for modest further increases, and CET1 of 14.3% after 14.5 million shares were repurchased in the quarter.

Analysts focused on the interplay between U.S. branch expansion and AML remediation, capital return plans tied to the 13% CET1 target, U.S. margin and loan growth, and whether credit losses may be past the peak. Management said the 100 new U.S. branches are consistent with Investor Day, are being pursued while the AML program remains the top priority, and do not change the bank’s obligation to satisfy the consent order. On capital, Ray Chun said the primary use of capital is organic growth, with buybacks returning excess capital after that; he confirmed the referenced $13 billion would be buybacks only. On credit, Ajai Bambawale said strong results reflect discipline, resilient consumers and businesses, prudent tariff reserves, and he said the bank may already be past the peak in PCLs, though uncertainty remains.