TORONTO -- TD Bank (TSX:TD) increased its fourth-quarter profit but failed to meet analyst expectations as it increased provisions for credit losses and other expense items.
The Toronto-based banking group had $1.746 billion of net income in the fourth quarter, or 91 cents per share, up from $1.616 billion or 84 cents per share a year earlier.
Its adjusted profit also increased, rising to $1.862 billion or 98 cents per share, from $1.815 billion or 95 cents per share in the fourth quarter of 2013.
TD's Canadian retail and its wholesale banking operations both saw increases from last year while its U.S. retail operation was relatively unchanged.
However, TD's profit missed analyst estimates of $1.05 per share of adjusted earnings and $1 per share of net income, according to data compiled by Thomson Reuters.
The bank's revenue increased by $452 million from a year earlier to $7.452 billion -- well above the estimate of $7.01 billion.
The quarter included $54 million of integration charges related to its acquisition of MBNA Canada's credit card portfolio, which reduced earnings by three cents per share -- compared with one cent a year before. Amortization of intangibles also reduced its profit by four cents per share, compared with three cents per share a year earlier.
TD also increased its provision for credit losses by $19 million to $371 million, from a relatively low $352 million.
"Almost everything that one does not want to see at TD came through in the quarter," Barclays analyst John Aiken wrote in a commentary.
"Considering we had anticipated that TD's relative exposures would result in relatively more positive earnings than peers, the fourth quarter is a decidedly negative surprise. Given that we anticipate the market will share in our sentiment, we would expect the shares to be off sharply today."
For the full 2014 financial year ended Oct. 31, TD had $29.96 billion of revenue -- up $2.7 billion from 2013 -- while net income rose by $1.2 billion to $7.88 billion and adjusted profit increased about $900 million to $8.12 billion.
TD's next Jan. 31 dividend payment will be 47 cents per common share, which is unchanged.
The year included TD's acquisition of part of the Aeroplan credit card portfolio from CIBC, under a three-way agreement reached in 2013 by the two banks and loyalty-plan operator Aimia Inc. (TSX:AIM).
"We are pleased to finish out the year with strong total adjusted earnings of $8.1 billion," said Bharat Masrani, TD's new president and chief executive officer. "Results for the year reflect good earnings from each of our businesses, driven by organic growth, strong fundamentals, and good results from recent acquisitions."
Masrani officially became TD's top executive after the 2014 financial year ended Oct. 31 but he had been named in April 2013 as the successor of Ed Clark, who retired effective Nov. 1 this year.
In the fourth quarter, TD's Canadian retail banking operations had $4.92 billion of revenue -- up $400 million from a year earlier, while net income increased $67 million to $1.3 billion. Its U.S. retail banking operations generated $2.05 billion of revenue, up from $1.96 billion in the 2013 fourth quarter, and $509 million of net income, up from $448 million.
TD's wholesale banking arm had $604 million of revenue -- little changed from $603 million a year earlier -- but its net income rose $38 million to $160 million -- an increase of 31 per cent.
