TD adjusted net income rose 6% to $3.9 billion, or $2.20 per share, while reported profit of $3.3 billion. Canadian individuals and commercial banks once again led the results, with revenues up 5% from last year’s growth in borrowing and deposits.
The result is also through ongoing restructuring related to TD’s U.S. operations, including $262 million in fees related to the repositioning of the balance sheet, as the bank is committed to complying with regulatory caps for U.S. retail assets in its anti-column obligation controls.
Credit rules totaled $971 million, down from $1.34 billion in the previous quarter, but still higher than $1.07 billion booked a year ago. The bank said the updates to the coverage associated with policy and trade uncertainty and its economic outlook were a factor in the quarter.
Mortgage trends and risks increase
TD’s residential mortgage default rate is up to 0.13% of loans, compared with 0.11% in the previous quarter and 0.09% in the same period last year. The household net worth credit line showed a similar move at 0.15%.
While debts under historical standards and below peers under TD remain low, the upward trend reflects an increasing pressure on families for families as borrowers are higher than borrowers who have obtained higher borrowers during the pandemic.
TD revealed that about 6% of its Canadian mortgage balances are still amortized over 35 years, down from 7% in the previous quarter and well below the peak of 27.4% in the first quarter of 2023. The extended schedule largely reflects variable borrowers who reach the trigger point when the fixed payment no longer pays the full interest cost. At renewal, these amortizations are restored to the original schedule, requiring higher payments.
The bank also reported less than 1% of mortgages were negative amortization, a sharp drop from nearly 6% late last year. This suggests that most affected variable rate borrowers have adjusted their payments to pay interest costs again.
Going forward, approximately $17.2 billion, or 5% of TD’s amortized mortgage balance, will be renewed in the last quarter of fiscal 2025. Another $100.5 billion (29%) expired in 2026 and then took a similar share in 2027.
Sona Mehta, head of Canadian private banking group, told analysts that mortgages and increased margins showed steady growth.
“The sequential momentum in the RESL business is strong. Overall, it rose 1% in the quarter quarter, up from the on-site. We also saw an expansion in profit margins, better profits on the original and portfolios,” she said during the revenue call.
Looking to the future
TD expects Canada’s net profit margin to remain relatively stable in the fourth quarter, with credit regulations expected to remain within the 45 to 55 basis points of loans.
CEO Raymond Chun said the results reflect both resilience among customers and the benefits of TD’s diversified business. “Our team achieved another quarter’s performance driven by strong customer activity and disciplinary executions, emphasizing the strength of our diversified business model,” he told shareholders.
The bank continued to overhaul its operations, charging $333 million in restructuring fees in a quarter related to job layoffs and other changes. Management expects that the plan will generate $550 million to $650 million in savings once fully implemented.
In the U.S., TD is still running under regulatory caps that limit the size of its retail balance sheet, and is still pursuing its anti-money laundering remedy program. Assets completed the quarter at $386 billion, below the $434 million cap.
Leovigildo Salom, head of retail at the U.S., said the bank has reached several milestones, including the launch of a new transaction monitoring platform that now incorporates machine learning to improve detection of suspicious activity.
He added that while most management remediation steps should end by the end of 2025, some work will continue until 2026 and 2027 before regulators consider lifting the cap. TD plans to share more details about its strategy on Investor Day on September 29.
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Last modified: August 28, 2025
