TD Bank reported an increase in technology and employee-related expenses to meet growth within its digital channels during the bank’s fourth-quarter earnings call on Thursday. 

WHY IT MATTERS: The $1.4 trillion TD Bank attributed the year-over-year rise in non-interest expenses to its “strategic investments in our people, in technology and in new capabilities in our businesses to drive future growth,” Bharat Masrani, group president and chief executive at TD Bank Group, said during the earnings call. 

THE BIG PICTURE: The Toronto-based bank continued to modernize its IT infrastructure through its Next Evolution of Work (NEW) model, which supports new tooling and platform capabilities such as the use of the cloud and adopting agile at-scale processes, which was addressed during the bank’s Q3 earnings call. 

TD increased its technology and equipment spend in Q4 by 17% YoY to $386 million as part of the bank’s initiative to hire top tech talent and invest in cloud software and hardware.

BY THE NUMBERS: TD reported for its fiscal Q4: 

• Non-interest expenses increased 10% YoY to $4.8 billion; 
• Total revenue jumped 12% YoY to $11 billion; and 
• Net income saw a 5% increase YoY to $2.9 billion. 

NOTEWORTHY: The bank’s digital channels continue to see YoY growth, as the number of active mobile users in Q4 rose 8% in both Canadian and U.S. retail markets, with 6.9 million users in Canada and 4.5 million in the U.S. 

Customers adopting the bank’s digital platforms in Q4 climbed 2% in both markets, with 62% of Canadian customers and 53% of U.S. customers using the platforms, per TD’s earnings presentation. 

THE BOTTOM LINE: As TD continues its growth in the digital space, the bank will continue to invest in both tech talent and in the equipment needed to meet customer demand, President and Chief Executive Leo Salom said during the call. 

“From a technology standpoint, we have been very focused on investing in digital and also investing in our cards’ next-generation platform,” Salom said. “We are quite comfortable that those will allow us to continue to maintain a strong revenue growth going forward.” 

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