Capital markets strength at TD Bank (TD), Bank of Montreal (BMO) and Canadian Imperial Bank of Commerce (CIBC) all exceeded expectations

Christine Dobie

(Bloomberg) — Toronto-Dominion Bank, Bank of Montreal and Canadian Imperial Bank of Commerce all beat expectations, including strong performance in the capital markets business, continuing a trend at other Canadian banks and ending a year of active markets and increased advisory work.

Toronto-Dominion Bank, the country’s second-largest bank, reported fourth-quarter adjusted earnings of $2.18 per share, above the $2.01 average estimate in a Bloomberg survey, according to a statement Thursday. Adjusted net profit from its capital markets business totaled $529 million in the three months to October, above the $372 million average estimate of three analysts.

“Global markets or trading were doing pretty well at the beginning of the year. Then, starting in the middle of the year, investment banking improved and now it’s actually pretty broad-based,” Chief Financial Officer Kelvin Tran said in an interview, commenting on factors that factored into the unit’s performance. “Given this, we see good momentum in the first quarter.”

Toronto-Dominion Bank was the last of Canada’s six largest banks to report results this week, all of which beat analysts’ profit forecasts and reported broadly stable credit trends and no major surprises in loan loss provisions.

Bank of Montreal’s adjusted earnings per share were $3.28, beating analysts’ average estimate of $3.03, and profit from the company’s capital markets division also topped expectations. CIBC had a similar situation. The company reported adjusted earnings per share of $2.21, exceeding the average estimate of $2.08, and capital market net profit was higher than expected.

“Similar to peers, TD delivered solid results on the back of strong capital markets and benefited from lower-than-expected provisions,” Jefferies Financial Group Inc. analyst John Aiken wrote in a note.

Toronto-Dominion Bank and Bank of Montreal’s U.S. operations also reported better-than-expected results, which has been a concern for investors in both banks.

Asset limit

Toronto-Dominion Bank, whose U.S. operations remain subject to an asset cap as part of an anti-money laundering settlement with regulators, has restructured its U.S. balance sheet to stay below that limit while still growing profitably. The unit reported adjusted net profit of $1.01 billion for the quarter, compared with analysts’ average estimate of $877 million.

Meanwhile, Bank of Montreal restructured its U.S. unit earlier this year, hiring Bank of America’s Aron Levine to run a combined unit that includes personal and corporate banking, commercial banking and wealth management. This was the first quarter in which the U.S. wealth management unit was included, and the unit’s adjusted net profit was $871 million, above the average estimate of $704 million.

During an investor day in September, Toronto-Dominion CEO Raymond Chun pledged to significantly adjust the company’s cost base to improve revenue growth. The bank said it plans to cut $2 billion to $2.5 billion a year over time, in part due to advances in artificial intelligence.

Earlier this year, TD Bank launched a restructuring plan aimed at cutting about 2% of its workforce. The company recorded an additional $190 million in costs related to the work in the fourth quarter and said the program is expected to save $750 million annually.

That’s higher than previous estimates, with the bank saying full-time staff will now be reduced by about 3%. Tran said “optimization” of Bank of America branches will also be part of a cost-cutting effort.

Toronto-Dominion Bank’s provisions for credit losses totaled $982 million in the quarter, below the average forecast of $1.11 billion.

“We feel good about it,” Tran said. “Consumers are resilient.”

The bank announced an increase in its quarterly dividend on Thursday, rising 3 cents per share to $1.08. BMO and CIBC also announced dividend increases.

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Last modified: December 4, 2025