TD Bank Group Roars into Q3 with Record Earnings, Positioning Itself for Growth Amid Trade Uncertainty
TD Bank Group delivered a strong third quarter 2026, with record earnings of CAD 4.7 billion and record EPS of CAD 2.77. The bank's Chief Executive Officer, Raymond Chun, highlighted the quarter's achievements during a recent conference call, citing momentum in markets-driven businesses, margin expansion, and volume growth in Canadian Personal and Commercial Banking.
In a report published earlier this week, TD Economics estimated that more than CAD 1 trillion in spending could be rolled out across Canada over the coming decade as part of a historic investment super cycle. Chun acknowledged the uncertainty surrounding the Canada-U.S. trade relationship but expressed optimism that the two countries would ultimately find common ground.
The bank's revenue grew 8% year-over-year, driven by these factors. Impaired PCLs declined quarter-over-quarter, reflecting strong credit performance. TD delivered positive operating leverage for the fifth consecutive quarter and achieved its 1% expense growth target for Q3, excluding variable compensation and FX in the U.S. strategic cards portfolio.
The bank's Return on Equity (ROE) was 16%, up 280 basis points year-over-year, putting it on track to significantly outperform its 6%-8% EPS growth and 13% ROE target for fiscal 2026. TD also achieved a CET1 ratio of 14.3%, with strong organic capital accretion offset by consistent share buybacks.
TD's CEO emphasized the bank's position of strength in capital, with significant flexibility to deploy capital to support clients and businesses in its communities. The lower D-SIB requirement has even more capital flexibility than before. Chun noted that it will take time for the bank to reduce its CET1 ratio but expects to reach 13% by the second half of fiscal 2027.
To illustrate the potential magnitude of capital return, assuming continued strong organic capital accretion and RWA growth in line with fiscal 2026 year-to-date, TD could return over CAD 13 billion in capital in fiscal 2027. The bank remains committed to returning excess capital to its shareholders while meeting its ROE objectives and retaining significant capacity to invest in organic growth.
