TD Bank's Q1 2025 Earnings Call: Unraveling Contradictions in Balance Sheet Strategy, Mortgage Growth, and Credit Loss Provisions

These are the key contradictions discussed in The Toronto-Dominion Bank's latest 2025Q1 earnings call, specifically including: U.S. balance sheet repositioning, Canadian mortgage growth expectations, performing provision credit loss (PCL) release, and strategic investments and portfolio exits:



Earnings and Revenue Growth:
- TD Bank Group reported earnings of $3.6 billion and earnings per share (EPS) of $2.02 for Q1 2025.
- The earnings were supported by volume growth in Canadian Personal and Commercial Banking and strong trading and fee income in market-driven businesses.

U.S. Balance Sheet Restructuring:
- The company reduced assets from $434 billion in September to approximately $402 billion in January as part of a balance sheet restructuring program.
- This was achieved primarily through reductions in borrowings using excess cash and investment maturities, aiming to maintain a buffer to the asset cap limitation.

North American Banking Segment Momentum:
- In the U.S., loans grew 1% year-on-year, with bank card balances up 12% and growth in small business and middle market verticals.
- The growth was despite a cautious approach by clients due to uncertainty around tariffs and long-term rates.

Governance and Control Investments:
- Expenses increased 12% year-on-year, driven by variable compensation and foreign exchange, but also including $86 million for U.S. BSA/AML remediation.
- This increase reflects ongoing efforts to enhance compliance and control measures following regulatory requirements.