The Toronto-Dominion Bank

TD said Q2 adjusted EPS was up 21% year-over-year and ROE was 14.4%, up over 200 basis points year-over-year. Total PCLs were 43 bps, flat quarter-over-quarter, and expenses were up 5% year-over-year, with management citing about 2% from variable compensation, FX, and the U.S. strategic cards portfolio. CET1 ended at 14.3%, down 26 bps sequentially, and the bank bought back about 19 million shares in the quarter. On guidance, TD said it remains on track to outperform its fiscal 2026 targets of 6% to 8% EPS growth and 13% ROE if macro conditions hold, still expects total PCLs of 40 to 50 bps in fiscal 2026, and reiterated enterprise expense growth of 3% to 4% for fiscal 2026. In U.S. banking, management kept the full-year expense growth outlook in the mid-single-digit range and about USD 2.9 billion in net income for the segment. AML remediation costs are still expected to be roughly $500 million in fiscal 2026, with costs moderating in the second half.

Raymond Chun framed the quarter as evidence that TD is ahead of its Investor Day roadmap, citing momentum across businesses, structural cost reduction and AI-driven productivity. He said the bank is tracking ahead on both the $2 billion to $2.5 billion structural cost reduction target and the $1 billion AI value target, with about $145 million of AI value delivered already this year. His tone was confident and upbeat, emphasizing that TD may reach its ROE target faster than expected and that the franchise has opportunities to gain share in both Canada and the U.S.

Kelvin Tran said the bank delivered strong top-line growth helped by markets businesses, margin expansion and volume growth in Canadian personal and commercial banking. He highlighted total PCLs of 43 bps, expenses up 5% year-over-year, and positive operating leverage for the fourth straight quarter, while adjusted bank PTPP rose 12% year-over-year after excluding certain items. He also noted CET1 of 14.3%, about 19 million shares repurchased, and said the bank remains committed to the $7 billion buyback, which together with the prior buyback would return $15 billion of capital to shareholders.

Analysts focused on credit trends, U.S. expenses and AML remediation, expense guidance, retail NIM pressure, and cards growth. Management said Canadian consumer credit is still resilient but expects some migration, especially in lower-score segments, while reiterating the 40 to 50 bps PCL outlook and saying the bank is well provisioned with about $500 million for trade and tariff risk. On expenses, management said U.S. remediation spend should moderate as implementation costs decline and validation/sustainability work rises, while enterprise expense growth remains guided at 3% to 4%. On cards, management said the U.S. franchise is underweight, sees room to grow bank cards and strategic partnerships, and believes cards can improve NIM and diversification over time.