To the delight of its shareholders, the company reported a healthy 16% return on equity, owing to strong organic growth in all primary business divisions. Its global wealth management segment turned out to be an outstanding performer, as it reported record earnings during the quarter.
The Bank of Nova Scotia (USA) (NYSE:BNS) is now completely focused on strengthening its business on its home soil, as it recently acquired ING direct for $ 3.1 billion, which will further enable the company to bolster its presence across Canada.
Bank of Montreal (USA) (NYSE:BMO) is another significant competitor to Toronto dominion. Like all other players in the market, Bank of Montreal also witnessed a successful second quarter. The company reported an adjusted net income of approximately $1 billion, which is a 2% year-over-year increase. Further, it sustained a strong capital position with a BASEL III common equity tier I ratio of 9.7%.
Bank of Montreal (USA) (NYSE:BMO) reported robust performance across all its segments, particularly the capital market division, where the firm experienced a 19% year-on-year growth in net income.
Like its is primary competition, Bank of Montreal is highly active on the M&A front, as it recently acquired Aver Media LP, a leading TV media lending company based in Canada . According to the bank’s management it was a strategic acquisition, which is expected to add immense value to both customers and shareholders.
Conclusion
Toronto Dominion operates in a highly competitive environment; therefore it becomes essential for it to focus on organic growth coupled with strategic acquisitions in order to continue reporting robust numbers. With Europe in deep economic recession and the U.S. on its way to economic consolidation, Toronto Dominion must make inroads into new and fast growing markets. At present, it has a growing presence across all developed markets; nevertheless the bank should now switch its focus in order to enhance its footprint across the emerging economies.
Considering the relative health of the Canadian financial institutions over its U.S. based counterparts, I believe Toronto Dominion possesses strong fundamentals and the ability to sustain robust profits in the long run.
Ashit Gulati has no position in any stocks mentioned. The Motley Fool recommends The Bank of Nova Scotia (USA). Ashit is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
The article How Is Toronto Dominion Positioned in the Canadian Banking Sector? originally appeared on Fool.com is written by Ashit Gulati.
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