Key Preview Takeaways
| Factor | Details & Implications |
|---|---|
| Consensus Q3 2026 EPS | $1.71 (USD, per consensus); last year Q3 actual EPS was $1.89 (CAD, reported) |
| Consensus Q3 2026 Net Income | $2,820M (USD, consensus) |
| Consensus Q3 2026 Revenue | $10,804M (USD, consensus); last year Q3 actual revenue was $15,297M (CAD, reported) |
| Guidance for FY 2026 | Management expects to outperform 6–8% EPS growth and 13% ROE targets if current macro holds |
| Expense Growth | Targeting 3–4% expense growth for FY 2026; tracking ahead of plan with structural cost reductions |
| PCL Guidance | Expecting total PCLs of 40–50 bps for FY 2026 |
| NIM Outlook | Canadian P&C: NIM expected to be relatively stable in Q3; U.S. Banking: modest NIM increase expected |
| Loan Growth | Canadian P&C: 5% YoY personal, 7% YoY business loan growth in Q2; U.S. core loans up 3% YoY in Q2 |
| Capital Returns | CET1 at 14.3% in Q2; committed to completing $7B buyback; dividend increased to $1.12/share in Q2 |
| AML Remediation | Remains #1 priority; $500M spend for FY 2026 reaffirmed; costs expected to moderate in H2 |
| Cards Franchise | U.S. proprietary card balances up 18% YoY in Q2; Nordstrom conversion completed, more partnerships eyed |
What to Watch for in Q3 2026
| Theme/Metric | What Matters This Quarter |
|---|---|
| EPS & Net Income Growth | Can TD sustain or accelerate the strong YoY EPS growth (+21% in Q2) and maintain positive operating leverage? |
| Revenue Momentum | Will record revenue trends in Canadian P&C, Wealth, Insurance, and Wholesale continue? |
| Net Interest Margin (NIM) | Is NIM stable or expanding in both Canada and U.S.? Any signs of margin compression from competition or rates? |
| Loan Growth | Are Canadian and U.S. core loan growth rates holding up or accelerating, especially in commercial/mid-market? |
| Credit Quality/PCLs | Are PCLs tracking within the 40–50 bps guidance? Any signs of consumer or commercial credit deterioration? |
| Expense Discipline | Is expense growth contained within the 3–4% target? Any further evidence of structural cost takeout or AI-driven savings? |
| Capital Returns | Progress on $7B buyback, CET1 ratio trajectory, and dividend sustainability |
| U.S. Banking | Continued improvement in ROE, NIM, and loan growth; update on AML remediation progress and cost moderation |
| Cards & Fee Income | Continued double-digit growth in cards, new partnerships, and fee income mix improvement |
| AI/Tech Leverage | Evidence of incremental value from AI initiatives, especially in cost reduction and process efficiency |
Recent Actuals — Quarterly Financials (Reported, CAD)
| Quarter | Revenue ($M) | Net Income ($M) | Diluted EPS ($) | ROE (%) | NIM (%) | Expense Growth (YoY) | PCL Ratio (bps) |
|---|---|---|---|---|---|---|---|
| Q2 2026 | 15,797 | 4,251 | 2.43 | 14.7 | 2.85 (Cdn P&C) / 3.41 (US) | +5% (adj) | 43 |
| Q1 2026 | 16,585 | 4,043 | 2.34 | 13.6 | 2.83 (Cdn P&C) / 3.38 (US) | +7% (adj) | 43 |
| Q4 2025 | 15,494 | 3,280 | 1.82 | 10.7 | 2.82 (Cdn P&C) / 3.25 (US) | +10% (adj) | 41 |
| Q3 2025 | 15,297 | 3,336 | 1.89 | 11.3 | 2.83 (Cdn P&C) / 3.19 (US) | +13% (adj) | 41 |
Notes: All figures are as reported in CAD. Adjusted expense growth is ex-variable comp, FX, and strategic cards portfolio.
Year-Ago Comparison (Q3 2025)
- Q3 2025 Revenue: $15,297M (CAD, reported)
- Q3 2025 Net Income: $3,336M (CAD, reported)
- Q3 2025 Diluted EPS: $1.89 (CAD, reported)
- Q3 2025 ROE: 11.3%
- Q3 2025 NIM: 2.83% (Canadian P&C), 3.19% (U.S. Banking)
- Q3 2025 Expense Growth: +13% YoY (adjusted)
- Q3 2025 PCL Ratio: 41 bps
Q3 2025 was a solid quarter but included elevated expense growth and a lower ROE compared to recent quarters. The YoY comparable for Q3 2026 is not especially tough, given that Q3 2025 was not a peak quarter for profitability or returns.
Consensus Forecasts — Q3 2026 (USD, rounded)
| Metric | Consensus Q3 2026 | Q3 2025 Actual (CAD, reported) | YoY Context |
|---|---|---|---|
| Revenue ($M) | 10,804 | 15,297 | FX impact; CAD vs. USD |
| Net Income ($M) | 2,820 | 3,336 | |
| EPS (GAAP) | 1.71 | 1.89 |
Note: Consensus figures are in USD; actuals are reported in CAD. Use caution when comparing directly due to FX.
Guidance and Management Commentary
FY 2026 Guidance and Outlook:
- Management expects to outperform its 6–8% EPS growth and 13% ROE targets for FY 2026 if current macro conditions persist.
- Expense growth is targeted at 3–4% for FY 2026 (excluding FX, variable comp, and strategic cards).
- PCLs expected in the 40–50 bps range for FY 2026.
- CET1 ratio expected to remain strong; $7B buyback program ongoing.
- NIM in Canadian P&C expected to be relatively stable in Q3; U.S. Banking NIM expected to modestly increase.
- U.S. Banking net income target for FY 2026: ~$2.9B (USD).
- AML remediation costs expected to moderate in H2 2026, with $500M full-year spend reaffirmed.
Recent Management Quotes:
- "The bank is on track to outperform its 6% to 8% EPS growth and 13% ROE targets for fiscal 2026, provided that the current macroeconomic conditions continue."
- "We are well on our way to achieve our 3% to 4% expense growth target for fiscal 2026."
- "We continue to expect total PCLs of 40 to 50 basis points in fiscal 2026."
- "As we look forward to Q3, based on the current rate and competitive market dynamics, we again expect net interest margin to be relatively stable, similar to this quarter's results."
- "We expect net interest margin to modestly increase [in U.S. Banking]."
- "We have strong momentum and are tracking ahead of pace on both [cost reduction and AI value] targets."
Segment Highlights and Trends
Canadian Personal & Commercial Banking
- Record Q2 revenue, PTPP, and earnings.
- Loan growth: +5% YoY personal, +7% YoY business in Q2.
- Deposit growth: +1% YoY personal, +5% YoY business in Q2.
- NIM: 2.85% in Q2, up 3 bps YoY; expected to be stable in Q3.
- Efficiency ratio: 39.7% in Q2, improved YoY.
- Cards: Record penetration rates, strong pre-approval conversion, #1 in industry growth.
U.S. Banking
- Q2 2026 adjusted net income: $960M (CAD), +8% YoY.
- Core loans up 3% YoY; middle market lending commitments +17% YoY.
- Proprietary credit card balances up 18% YoY.
- NIM: 3.41% in Q2, up 41 bps YoY; expected to modestly increase in Q3.
- Expenses: Up 10% YoY in Q2, but base operating expenses below 3% after adjusting for AML and Nordstrom conversion.
- AML remediation: $173M in Q2, costs expected to moderate in H2.
- Nordstrom card conversion completed; more revenue and credit loss share, net positive to bottom line.
Wealth Management & Insurance
- Q2 2026 net income: $837M, +18% YoY.
- Wealth: New account growth +15% YoY, trades per day +11% YoY.
- Insurance: Net income +23% YoY, ROE 35.9%.
- AUA: $797B, +22% YoY; AUM: $643B, +19% YoY.
Wholesale Banking
- Q2 2026 net income: $612M, +46% YoY.
- Revenue: $2,393M, +12% YoY.
- ROE: 14.5%, up 360 bps YoY.
- Efficiency ratio: 63.1%, improved YoY.
- Strong performance in equities, capital markets, lending.
Summary and Conclusions
- TD enters Q3 2026 with strong momentum across all major businesses.
- Expense discipline and structural cost reduction are ahead of plan, supporting positive operating leverage and margin expansion.
- Loan growth is robust in both Canada and the U.S., especially in commercial and cards.
- Credit quality remains solid, with PCLs tracking within guidance and allowance coverage at prudent levels.
- Capital returns are significant, with a large buyback ongoing and a strong CET1 buffer.
- AI and digital investments are delivering tangible value, both in cost savings and client experience.
- U.S. Banking is showing improving ROE, NIM, and loan growth, with AML remediation progressing and costs expected to moderate.
- Q3 2026 faces a manageable YoY comparable, as Q3 2025 was not a peak quarter.
- Key factors to watch in the upcoming report: expense growth, NIM stability/expansion, loan growth (especially U.S. core loans), credit quality, and continued execution on cost and AI targets.
Overall, TD is positioned to deliver another strong quarter, with upside potential if macro conditions remain supportive and execution continues at the current pace.
