Canada’s TD Bank increased its investments in technology in the third quarter to remain competitive and serve a growing number of technology entrepreneurs.
The $1.9 trillion bank saw its non-interest expense increase to $1.8 billion in Q3 2023, up by 5% year over year, “reflecting higher spend supporting business growth, including technology and higher employee-related expenses,” according to the bank’s earnings statements.
“In particular, we are adding to our team and capabilities in the technology and innovation sector,” Chief Executive Bharat Masrani said during the bank’s Thursday earnings call. “In the months ahead, we will continue to build out our venture strategy, augmenting the great progress already made by our existing team and enabling us to further meet the unique needs of technology entrepreneurs.”
THE BIG PICTURE: TD Bank’s peers are increasing their tech spend to remain competitive and attract customers.
The Royal Bank of Canada (RBC) increased its non-interest expense to $6.3 billion, up 23% YoY in Q3, primarily driven by “investments in people and technology,” Nadine Ahn, chief financial officer, said during RBC’s earnings call.
The $1.4 trillion bank aims to increase its investment in the technology sector as it is seeing positive returns on the investment made so far.
WHAT THEY’RE SAYING: “We are pleased that the strategic investments in talent and technology and the changes we’ve made to our organizational structure are producing results,” Chief Executive David McKay said during the earnings call. “Our investments and our people, technology, products, and services, continue to create more value for our clients, they’re driving strong volume growth and client activity across our businesses.”
BY THE NUMBERS: In Q3, TD Bank reported:
- Revenue of $12.7 billion, a 16.51% increase YoY;
- Net income of $2.6 billion, an 18.75% decrease YoY; and
- Net interest income of $7.2 billion, a 2.8% increase YoY.
FLASHBACK: In March, TD Bank’s auto loan arm, TD Auto Finance announced its plans to launch an integrated digital experience in the third quarter that allows customers to manage their auto loan using the bank’s mobile app.
OF NOTE: TD Bank and Memphis, Tenn.-based First Horizon announced in May that they have agreed to terminate their agreement of merger announced in February 2022 due to uncertainty over regulatory approval, according to a TD Bank release.
MARKET REACTION: TD Bank’s stock stood at $59.26, down by 0.27% on Friday trading at 2:50 p.m.
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