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TD anticipates $141M windfall from Schwab as banks unveil earnings.

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TLDR:

TD Bank Group expects to earn about $141 million in equity net income in the first quarter of 2024 from its holdings in Charles Schwab as U.S. banks report earnings. Adjusted net income is estimated to drop 30% from the previous year.

Key Points:

  • TD Bank Group expects to earn approximately $141 million in equity net income in the first quarter of 2024 from its holdings in Charles Schwab.
  • Last year, TD reported $285 million in net income in the first quarter from its investment in Schwab.
  • Adjusted net income for TD is expected to be around $230 million, representing a 30% drop from the previous year.
  • The financial firm’s outlook for the year disappointed analysts.
  • Key takeaways from U.S. bank earnings include net income pressure, improved capital markets, and continued credit challenges on commercial real estate loans.
  • Canadian banks are expected to see similar trends in capital markets and loan growth, but may experience softer net interest income due to increasing deposit costs.
  • Canadian consumers are more indebted than U.S. consumers and are more sensitive to interest rate changes.
  • Expense control has been a focus across the banking sector, and Canadian banks may continue to reduce expenses, including layoffs.
  • The outlook for cost control is dependent on the macroeconomic environment and factors such as credit quality and unemployment.
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