TD Bank to cut about 3,000 jobs; profit misses estimate

By Nivedita Balu and Arasu Kannagi Basil

(Reuters) -TD Bank Group is axing 3% of its workforce, or more than 3,000 jobs, the country's second-largest bank said on Thursday, becoming the latest Canadian bank to cut employees, after reporting quarterly profit that missed analysts' expectations.

Shares of the bank, which set aside more-than-expected funds to cover for potential sour loans, were down about 1.5% in midday trading.

TD joins Royal Bank of Canada, which has cut about 1,800 positions, and Bank of Nova Scotia, which has slashed 2,700 jobs. Smaller peer CIBC on Thursday said it had cut 5% of its workforce.

"We are undertaking a broader restructuring program and that gives us the opportunity to streamline and deliver efficiencies to create capacity to invest with future growth," TD CFO Kelvin Tran said in an interview.

TD said it recorded C$363 million of restructuring charges in the fourth quarter, primarily related to employee severance and other personnel-related costs, and expects to incur additional charges of a similar magnitude in the first half of 2024.

The bank's U.S. business was also a weak point, where earnings fell 19%, hurt by lower deposits and margins on loans.

Net interest income - the difference between what banks earn on loans and pay out on deposits - fell nearly 1.8% to C$7.49 billion.

Provision for credit losses rose to C$878 million from C$617 million a year ago.

Adjusted net income fell to C$3.51 billion ($2.58 billion), or C$1.83 per share, for the three months ended Oct. 31 from C$4.07 billion, or C$2.18 per share, a year earlier.

Analysts were expecting earnings of C$1.90 per share, according to LSEG data.

RBC analyst Darko Mihelic said the results were weaker than anticipated with a good level of "noise."

($1 = 1.3618 Canadian dollars)

(Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Shilpi Majumdar, Pooja Desai and Mark Porter)