TD Bank (TSX: TD) reported a Q2 2026 net income of $4.25 billion, a huge fall from $11.13 billion a year earlier. However, on adjusted basis, net income increased to $4.17 billion from $3.63 billion last year, translating to $2.38 earnings per diluted share.
Breaking it down, Canadian Personal and Commercial Banking remained the strongest earnings anchor, with net income of $1.93 billion, up from $1.67 billion last year. US Banking reported net income was $813.0 million, compared with $120.0 million last year.
Wealth Management and Insurance produced net income of $837.0 million, up from $707.0 million last year. Wholesale Banking net income was $612.0 million, up from $419.0 million last year.
Q2 2025 included a $8.98 billion pre-tax gain on the sale of Schwab shares, which heavily inflated the prior-year comparison. In addition, the quarter’s adjustments cut across several non-GAAP items. TD recorded $33.0 million of amortization of acquired intangibles, down from $43.0 million last year. The terminated First Horizon capital hedging strategy reduced results by $43.0 million, compared with $47.0 million last year. A Schwab-related tax adjustment added $288.0 million, while the US strategic cards partnership change created a $197.0 million charge.
On the topline, revenue was $15.80 billion, down from $22.94 billion last year. Net interest income on a reported basis rose to $8.86 billion from $8.13 billion a year ago, while reported non-interest income dropped to $6.94 billion from $14.81 billion last year.
Provision for credit losses was $1.00 billion, down from $1.34 billion last year.
Capital softened but stayed elevated. TD’s CET1 ratio was 14.3%, compared with 14.9% last year. The Tier 1 ratio was 16.0%, down from 16.6% last year, while the Total Capital ratio was 17.8%, down from 18.5%.
Reported ROE was 14.7%, compared with 39.1% last year. On adjusted basis, ROE was 14.4%, up from 12.3% last year.
Canadian Personal and Commercial Banking expects Q3 net interest margin to remain relatively stable, while US Banking expects modest Q3 net interest margin improvement. TD also reiterated fiscal 2026 US BSA/AML remediation and related governance and control investments at approximately US$500.0 million pre-tax, with significant milestones still expected through calendar 2026 and 2027.
The bank also declared $1.12 dividend per share, payable on and after July 31, 2026.
TD Bank last traded at $155.13 on the TSX.
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