TD Bank Struggles with Q2 Income Slump
TD Bank (NYSE: TD) (TSX: TD), Canada's second-largest financial institution, disclosed a disappointing second-quarter income report. Falling short of expectations, the bank expressed doubts about achieving its formerly projected earnings goal. This dip in performance has been attributed to wider economic strains and a recently abandoned collaboration with First Horizon (NYSE: FHN).
Q2 Earnings vs. Prior Year
In the three months concluded on April 30, the bank reported adjusted diluted earnings per share of $1.94, a decrease from the $2.02 earned in the previous year's equivalent period. Market predictions from Bloomberg Consensus had anticipated a higher figure of $2.08 per share.
TD Bank's Medium-Term Profit Forecast
TD Bank raised concerns regarding its medium-term income growth target. The bank initially set an ambitious goal for adjusted income growth between 7% and 10%. However, with the ongoing "deterioration in the macroeconomic environment," the bank now believes it may be unable to reach these goals.
The Abandoned $13.4 Billion Merger with First Horizon
Complicating the situation, TD Bank and First Horizon, a regional bank located in Tennessee, mutually decided to abandon a planned $13.4 billion merger. As per the terms of the agreement, TD has committed to a $200 million cash payout to First Horizon. The Canadian banking giant also announced it would fulfill its contractual obligation of a $25 million payment to First Horizon, given the merger's failure to obtain regulatory approval.
