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The Toronto-Canada based company reported fourth quarter net income that declined to C$1.01 billion from C$1.09 billion in the corresponding quarter last year. Net income available to common shareholders for the quarter declined to C$991 million or C$1.22 per share from C$1.09 billion or C$1.50 per share in the corresponding period last year.
Results for the quarter included amortization of intangible assets of C$126 million after tax, restructuring and integration charges of C$25 million after tax relating to acquisition of Commerce.
Results also included a positive adjustment of C$323 million after tax resulting from the reversal of a substantial part of the company's reserve related to Enron litigation, a gain of C$118 million after tax due to the change in the fair value of derivatives, and a gain of C$59 million after tax due to the change in fair value of credit default swaps hedging the corporate loan book.
Excluding charges and gains, adjusted net income for the quarter declined to C$665 million from C$1.02 billion in the preceding year. Adjusted net income available to common shareholders dropped to C$642 million or C$0.79 per share from C$1.02 billion or C$1.40 per share in the year-ago period.
Total revenues for the quarter increased to C$3.64 billion from C$3.55 billion in the previous year. Net interest income increased to C$2.45 billion from C$1.80 billion last year, while other income declined to C$1.19 billion from C$1.74 billion in the preceding year.
Commenting on the results, Ed Clark, TD Bank Financial Group President and CEO said, "On the whole, we're proud of what we've accomplished in 2008. Our retail businesses are performing very well and, even though TD Securities had a tough year and a particularly tough fourth quarter, we're pleased that its strategic positioning has protected our investors from the worst of the current turmoil."
Clark added, "In this environment, our strategy has been the right one, and we remain conservatively positioned with over 90% of our earnings coming from retail businesses. This has allowed us to generate adjusted earnings of $3.8 billion in 2008 during the most challenging financial times we've ever seen. Our Canadian and U.S. retail operations delivered very strong results and we're well into a successful integration at TD Bank, America's Most Convenient Bank."
Segment-wise, Canadian Personal and Commercial Banking generated net income of C$600 million in the quarter, led by growth in personal deposits, business banking and life insurance areas.
Wealth Management, including the company's equity share in TD Ameritrade, reported earnings of C$170 million in the quarter. TD Ameritrade contributed C$60 million in net income to the Wealth Management segment, down 20% from last year.
The U.S Personal and Commercial Banking generated adjusted net income of C$276 million, up 123% year-on-year, primarily due to additions of Commerce earnings.
In Wholesale Banking segment, the company reported a loss of C$228 million, primarily due to mark-to-market losses in the credit trading business. Results were substantially impacted by a significant decline in global liquidity and reduced market activity as the weakness in global financial markets continued to broaden and intensify, which in turn led to significant credit trading losses, a primary contributor to the segment's loss.
The Corporate segment posted an adjusted net loss of C$153 million, compared to a net loss of C$26 million in the same period last year, driven by illiquid markets, which contributed to losses on securitization and negative carry on some investments.
Toronto-Dominion's provision for credit losses for the quarter rose to C$288 million from C$139 million last year. Provision for income taxes for the fourth quarter of fiscal 2008 decreased to $20 million from $153 million in the prior-year similar period.
The bank declared a dividend of 61 cents per share, payable on or after January 31, 2009 to shareholders of record as of January 6, 2009.
For the full year period, the company's net income declined to C$3.83 billion or C$4.87 per share from C$3.99 billion or C$5.48 per share in the corresponding period of last year.
On an adjusted basis, net income for fiscal year 2008 declined to C$3.81 billion or C$4.88 per share from C$4.19 billion or C$5.75 per share in the prior-year similar period.
Total revenues for the full year 2008 increased to C$14.67 billion from C$14.28 billion in the year-ago period. Net interest income for the fiscal 2008 increased to $8.53 billion from $6.92 billion in the year-ago similar period.
The company named Brian Levitt to the board of directors, the eighteenth director to join the company's board. He is a partner and Co-Chair of Osler, Hoskin & Harcourt LLP.
Clark concluded, "While the lack of visibility on the economic environment calls for caution, we have a strategy and competitive position that will help us weather the storm, and I know our teams are focused on delivering growth despite significant headwinds. We're building the first truly North American bank, one that's focused on franchise earnings and maintaining a business mix that supports our lower risk profile."
Toronto-Dominion Bank is currently trading at $34.02, up $0.11 or 0.32%, on a volume of 742,143 shares on the NYSE.
Toronto-Dominion Bank is currently trading at C$42.85, up C$0.35 or 0.82%, on a volume of 2.01 million shares on the Toronto Stock Exchange.
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