By JBizNews Desk

TORONTO — May 28, 2026 — TD Bank Group raised its quarterly dividend and reported sharply higher profit Thursday as Canada’s second-largest lender by assets pointed to strong growth across its businesses and accelerating progress on cost reductions and operational improvements.

The bank increased its quarterly dividend by 4 cents to $1.12 per share, while continuing an aggressive share repurchase program. Raymond Chun, TD’s Group President and Chief Executive Officer, said the dividend increase and ongoing buybacks reflect management’s confidence in the bank’s earnings outlook and capital strength. TD repurchased approximately 19 million shares during the quarter as part of its previously announced $7 billion buyback program.

The results marked a significant improvement from a year earlier. Adjusted earnings per share rose 21% to $2.38, while adjusted net income increased 15% to $4.2 billion. The bank’s return on equity climbed to 14.4%, up more than two percentage points from the prior year.

Canadian Personal and Commercial Banking, TD’s largest division, delivered record second-quarter revenue and earnings. Net income reached $1.925 billion, up 15% year-over-year, driven by stronger lending activity, deposit growth, and improved lending margins. Average deposits increased 3%, while loan volumes rose 6%. TD also reported record penetration levels for consumer and small-business credit cards as existing customers expanded their use of the bank’s products.

The bank’s wealth management and insurance division also achieved record earnings and assets under management. New client accounts increased 15% from a year ago as investors continued shifting toward digital investing platforms and exchange-traded funds. TD said its Canadian banking operations generated approximately $9 billion in client referrals to the wealth division during the quarter.

South of the border, TD’s U.S. business continued showing signs of stabilization following regulatory setbacks that have weighed on the franchise. Adjusted net income in the U.S. segment increased 8% year-over-year, or 12% when measured in U.S. dollars. However, expenses in the division rose 10%, primarily due to ongoing investments in compliance, governance, and anti-money-laundering controls.

Those investments stem from TD’s efforts to address deficiencies identified by U.S. regulators. In 2024, the bank agreed to pay more than $3 billion in penalties following findings that it failed to adequately detect and prevent money-laundering activity through its U.S. operations. The settlement also imposed restrictions on certain growth activities within the bank’s American retail business.

Since taking over as CEO in February 2025, Chun has made remediation of those issues a central priority. Management said compliance-related expenses are expected to begin declining later this year, with major remediation milestones anticipated through 2027.

Credit quality remained stable during the quarter. TD’s provision for credit losses remained within management’s guidance range, while the allowance for credit losses declined by $147 million from the previous quarter. The bank’s Common Equity Tier 1 (CET1) ratio, a key measure of financial strength, stood at 14.3%, well above regulatory requirements.

Cost discipline also emerged as a bright spot. TD reported its slowest expense growth since 2022 and recorded a fourth consecutive quarter of positive operating leverage, meaning revenue growth outpaced expense growth. Excluding variable compensation and foreign-exchange impacts, expenses increased just 3%.

Management said the bank remains ahead of schedule on structural cost-reduction initiatives and is beginning to see benefits from investments in artificial intelligence and operational automation, while continuing to invest in technology infrastructure, branch operations, and customer service improvements.

Looking ahead, TD reaffirmed its expectation to exceed its full-year targets of 6% to 8% adjusted earnings-per-share growth and a 13% return on equity, assuming economic conditions remain stable. Executives cautioned that competition for deposits and loans in Canada remains intense and that geopolitical tensions in the Middle East could create broader economic risks if conditions deteriorate.

For investors, however, the dividend increase provided the clearest signal of management’s confidence. After a period marked by regulatory penalties, leadership changes, and heightened scrutiny, TD’s latest results suggest the bank’s recovery strategy is beginning to gain momentum.

Canada — JBizNews Desk

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