By Ketki Saxena
Investing.com -- Toronto-Dominion Bank (TSX:TSX:TD) and Royal Bank of Canada (TSX:TSX:RY) announced contrasting financial results for the third quarter ended July 31, 2023, on Thursday.By K
TD Bank reported a fall in its third-quarter profit compared to the same period last year, primarily due to increased provisions for credit losses. The bank's net income amounted to $2.96 billion, or $1.57 per diluted share, down from $3.21 billion or $1.75 per diluted share a year earlier. The bank's revenue, however, rose to $12.78 billion from $10.93 billion in the same quarter last year.
On an adjusted basis, TD Bank earned $3.7 billion, down two per cent from the same period last year, or $1.99 per diluted share. This figure was down from $2.09 per diluted share last year and missed analyst expectations of $2.03 per share.
The bank's provisions for credit losses rose significantly to $766 million, up from $351 million a year earlier. TD Bank also incurred a $306 million payment related to the termination of its proposed First Horizon transaction.
In an attempt to offset disappointing quarterly results, TD Bank announced its intention to repurchase up to 4.9 per cent of its outstanding shares, tripling the amount of its previous buyback program. Barclays (LON:BARC) analyst John Aiken said this move will likely temper any disappointment among shareholders.
On the other hand, Royal Bank of Canada reported a rise in its third-quarter profit compared to a year ago and reiterated its focus on reducing costs and trimming jobs. The bank's net income rose to $3.87 billion or $2.73 per diluted share for the quarter ended July 31, up from $3.58 billion or $2.51 per diluted share in the same quarter last year.
RBC's revenue totalled $14.49 billion, up from $12.13 billion a year earlier while its provisions for credit losses amounted to $616 million, up from $340 million in the same quarter last year.
On an adjusted basis, RBC says it earned $2.84 per diluted share in its latest quarter, up from $2.55 a year earlier, exceeding the average analyst estimate of a profit of $2.71 per share.
RBC chief executive Dave McKay stated that the bank remains focused on executing its cost reduction strategy while leveraging its strong balance sheet and diversified business model to support growth and bring long-term value to clients, communities and shareholders.
The bank reported that its number of full-time equivalent employees was down one per cent from last quarter and expects further reduction by about one to two per cent next quarter.