The Toronto-Dominion Bank

TD said EPS was up 21% year over year and ROE was 14.4%, up over 200 basis points year over year. Total PCLs were 43 basis points, flat quarter over quarter, and impaired PCLs were $973 million, down $191 million quarter over quarter. The CET1 ratio ended at 14.3%, down 26 basis points sequentially, and the bank repurchased approximately 19 million common shares in Q2. On the expense side, expenses increased 5% year over year, while the CFO said expenses excluding FX, variable compensation and the strategic cards portfolio were in the 3% to 4% growth range for 2026. Forward guidance included fiscal 2026 EPS growth of 6% to 8%, ROE of 13%, total PCLs of 40 to 50 basis points, enterprise expense growth of 3% to 4%, U.S. Banking expense growth in the mid-single-digit range, and U.S. Banking net income of approximately USD 2.9 billion. For Q3, management expects Canadian NIM to stay relatively stable and U.S. Banking NIM to modestly increase.

Raymond Chun framed the quarter as evidence that TD is executing well ahead of Investor Day targets, with momentum across businesses and structural cost reductions supporting higher returns. He emphasized that AI, automation and process redesign are already producing tangible benefits, including faster mortgage pre-adjudication and almost $145 million of AI value delivered at the halfway point toward a $200 million annual target. His tone was upbeat and confident, repeatedly pointing to upside in ROE, cost reduction and growth opportunities in both Canada and the U.S.

Kelvin Tran said the quarter benefited from strength in markets-driven businesses plus margin expansion and volume growth in Canadian Personal and Commercial Banking. He highlighted total PCLs of 43 basis points, flat sequentially, and noted that expenses were up 5% year over year, with about 2% tied to variable compensation, FX and the U.S. strategic cards portfolio; excluding those items, expense growth was 3% to 4%, in line with the 2026 target. He also pointed to the CET1 ratio of 14.3%, approximately 19 million shares repurchased in Q2, and reiterated the $7 billion buyback commitment and the expectation that total capital returned across the current and prior buyback programs will be $15 billion.

Analysts pressed management on credit trends, U.S. expense growth, AML remediation costs, card strategy and wholesale ROE. On credit, Ajai Bambawale said TD expects some pressure from trade/tariff actions, Middle East uncertainty and the Canadian macro backdrop, but said the bank is well reserved at 97 basis points of allowance coverage and cited about $500 million already reserved for trade and tariffs. On the U.S. bank, Leo Salom said AML costs should moderate in the second half and remain in line with the previously guided $500 million for fiscal 2026, while also noting that loan growth is turning positive and that TD is open to more strategic card partnerships. On wholesale, Tim Wiggan said the environment remains constructive, with healthy market activity, a strong backlog and room to keep growing the platform.