TD Bank (TD) Q2 2025 earnings summary

Executive summary

• Reported net income for Q2 2025 was $11.1 billion, up 334% year-over-year, driven by the sale of Schwab shares; adjusted net income was $3.6 billion, down 4% year-over-year.

• Reported diluted EPS was $6.27 (vs. $1.35 last year); adjusted diluted EPS was $1.97 (vs. $2.04), with strong trading and fee income, and volume growth in Canadian Personal and Commercial Banking.

• Strategic actions included the sale of the entire Schwab equity stake, $9 billion in correspondent loans, and the wind-down of the U.S. point-of-sale financing business.

• U.S. balance sheet restructuring and AML remediation remain top priorities, with significant progress on asset reduction, investment portfolio repositioning, and regulatory oversight.

• Strategic review underway, focusing on cost reduction, operational efficiency, digital/AI investments, and business mix.

Financial highlights

• Q2 2025 reported revenue was $22.9 billion (up from $13.8 billion); adjusted revenue was $15.1 billion (up from $13.9 billion).

• CET1 ratio improved to 14.9%, up 177 bps sequentially, supported by the Schwab sale and strong internal capital generation.

• Provision for credit losses (PCL) was $1.34 billion (0.58% of net average loans), up from $1.07 billion, reflecting policy and trade uncertainty.

• Reported ROE was 39.1% (Q2 2025), adjusted ROE 12.3%; efficiency ratio (reported) 35.5%, adjusted (net of ISE) 57.6%.

• Repurchased 30 million shares for $2.5 billion under NCIB; $8 billion buyback commitment.

Outlook and guidance

• Fiscal 2025 adjusted expense growth expected at the upper end of 5–7%, reflecting governance, control, and business growth investments.

• U.S. balance sheet restructuring and investment portfolio repositioning expected to be completed by H1 2025, targeting NII benefit at the upper end of US$300–500 million pre-tax.

• Restructuring program to generate $550–650 million in annual run-rate savings, with $600–700 million total pre-tax charges expected.

• U.S. AML remediation and governance investments to remain at ~$500 million pre-tax in 2025 and 2026.

• Investor day scheduled for September 29, 2025, to present refreshed medium-term financial targets.