Toronto-Dominion Bank (TD), Canada’s second-largest lender, reported stronger-than-expected quarterly earnings on Thursday, driven by robust performance in its capital markets division. However, the bank also announced significant restructuring plans that include laying off approximately 2,000 employees.
The restructuring initiative, aimed at simplifying operations and improving long-term efficiency, is expected to save TD up to $650 million annually. The changes include workforce reductions representing 2% of its global staff, the wind-down of certain business lines, and targeted exits.
TD’s wholesale banking division—which includes capital markets and investment banking—posted record revenue of $2.13 billion, a 10% increase year-over-year, with net income up by 16%. The gains were largely fueled by heightened trading activity and strong underwriting fees, including proceeds from the sale of its remaining stake in Charles Schwab Corp.
“When there is uncertainty in the market, people take views on the direction, so you actually see more trading volume happening,” said Chief Financial Officer Kelvin Tran. “TD, both on the securities side and wealth management side, benefits from that.”
Despite the positive revenue news, TD increased its loan loss provisions to $1.34 billion, up from $1.07 billion a year ago, in anticipation of potential credit deterioration amid ongoing economic uncertainty.
The bank also expects to incur between $600 million and $700 million in pre-tax restructuring charges over the coming quarters.
“The uncertainty in the market causes clients to pause and delay long-term decisions,” Tran noted. “While we still see loan growth, it’s prudent to build reserves given the current outlook.”
The earnings release marks the first under TD’s new CEO Raymond Chun, who assumed leadership in February amid efforts to address internal compliance issues and reposition the bank for future growth. TD is undergoing a comprehensive strategic review to streamline its operations and explore new growth avenues.
“We are in the advanced stages of reviewing how to accelerate momentum and seize new opportunities,” Tran said.
Despite the restructuring, market analysts responded positively. RBC Capital Markets’ Darko Mihelic described the results and strategic direction as encouraging, emphasizing the significance of the cost-saving measures.
TD’s earnings kick off the quarterly results season for Canada’s major banks, offering an early look at how financial institutions are navigating global economic headwinds, including recent tariff disruptions.