Trading error hurts TD’s profits

Article Excerpt

TORONTO-DOMINION BANK $61 (Toronto symbol TD; Conservative Growth Portfolio, Finance sector; Shares outstanding: 802.9 million; Market cap: $49.0 billion; SI Rating: Above average) will take a $96 million pre-tax charge in its third fiscal quarter ending July 31, 2008, due to a pricing error on certain financial Instruments at its UK trading operations. The charge is equal to 10% of TD’s second-quarter earnings of $973 million or $1.32 a share. This seems to be a one-time incident, and TD plans to tighten control over its traders. TD’s focus on its retail banking operations in Canada and the United States has helped it avoid the big writedowns of subprime mortgages and illiquid securities that have hurt profits at other big banks. The retail operations accounted by 90% of TD’s earnings in the most recent quarter. TD Bank is a buy. buy…