TD‘s adjusted net income rose 6% to $3.9 billion, or $2.20 per share, while reported profit came in at $3.3 billion. Canadian personal and commercial banking once again led the results, with revenue up 5% from last year on loan and deposit growth.
Results were also shaped by ongoing restructuring tied to TD’s U.S. operations, including $262 million in charges related to balance sheet repositioning as the bank works to comply with a regulatory cap on U.S. retail assets following deficiencies in its anti-money-laundering controls.
Credit provisions totalled $971 million, down from $1.34 billion the previous quarter but still above the $1.07 billion booked a year ago. The bank said overlays tied to policy and trade uncertainty, along with updates to its economic outlook, were a factor in the quarter.
Mortgage trends and rising risks
TD saw its residential mortgage delinquencies inch up to 0.13% of its loans, compared with 0.11% in the previous quarter and 0.09% a year earlier. Home equity lines of credit showed a similar move, at 0.15%.
Although arrears remain low by historical standards and below some of TD’s peers, the upward trend reflects mounting pressure on households as more borrowers renew at higher rates than those secured during the pandemic.
TD disclosed that about 6% of its Canadian mortgage balances are still amortized beyond 35 years, down from 7% in the prior quarter and well below a peak of 27.4% in the first quarter of 2023. The extended schedules largely reflect variable-rate borrowers who hit their trigger point, when fixed payments no longer cover the full interest cost. At renewal, those amortizations revert to the original schedule, requiring higher payments.
The bank also reported that less than 1% of mortgages are in negative amortization, down sharply from nearly 6% late last year. This indicates that most affected variable-rate borrowers have already adjusted their payments to once again cover interest costs.
Looking ahead, about $17.2 billion, or 5% of TD’s amortizing mortgage balances, are set to renew in the final quarter of fiscal 2025. Another $105 billion (29%) come due in 2026, followed by a similar share in 2027.
Sona Mehta, group head of Canadian personal banking, told analysts that mortgage lending is showing steady growth alongside improved margins.
“We’ve seen strong sequential momentum in the RESL business. On an average basis, it’s up 1% quarter-over-quarter and better than that on a spot basis. We also saw margin expansion, with better margins both on originations and the portfolio,” she said during the earnings call.
Looking ahead
TD expects net interest margins in Canada to remain relatively steady into the fourth quarter, with credit provisions projected to stay in the range of 45 to 55 basis points of loans.
Chief executive Raymond Chun said the results reflect both resilience among clients and the benefits of TD’s diversified businesses. “Our teams delivered another quarter of strong performance, driven by robust client activity and disciplined execution, underscoring the strength of our diversified business model,” he told shareholders.
The bank continues to overhaul its operations, taking a $333-million restructuring charge in the quarter tied to job reductions and other changes. Management expects the program to generate annual savings of $550-million to $650-million once fully implemented.
In the U.S., TD is still working through its anti-money-laundering remediation program while operating under a regulatory cap that limits the size of its retail balance sheet. Assets finished the quarter at US$386 billion, below the US$434-billion ceiling.
Leovigildo Salom, head of U.S. retail, said the bank has reached several milestones, including the launch of a new transaction monitoring platform that now incorporates machine learning to improve detection of suspicious activity.
He added that while most management remediation steps should be wrapped up by the end of 2025, some work will continue into 2026 and 2027 before regulators consider lifting the cap. TD plans to share more details on its strategy at an investor day on Sept. 29.
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Last modified: August 28, 2025