How The Toronto-Dominion Bank Makes Money

TD Bank Group generates revenue through four distinct business segments that collectively produced CAD $67.78 billion in total revenue for FY2025. The Canadian Personal and Commercial Banking segment is the profit engine, generating CAD $21.20 billion in revenue in FY2025 (approximately 31% of total), with net income of CAD $7.46 billion and a return on common equity of 31.4%. This segment serves personal banking, small business, and commercial clients through 1,051 retail branches, TD Canada Trust digital platforms, and TD Auto Finance Canada. Revenue flows from three primary channels: net interest income of CAD $16.70 billion (up 6% from FY2024), driven by loan growth and net interest margin expansion; non-interest income of CAD $4.50 billion from service charges, card services, and fees; and insurance revenue. The segment's net interest margin was 2.82% in FY2025, up from 2.80% in FY2024, reflecting the benefit of higher interest rates on the bank's deposit-funded lending book. The efficiency ratio of 41.1% is among the best in North American banking, reflecting the operating leverage of TD's dominant Canadian retail franchise. The average loan portfolio in this segment grew to CAD $593 billion, with residential mortgages representing the largest component, followed by personal loans and commercial lending. Customer deposits totaled CAD $398 billion, providing a low-cost funding base with a deposit beta (the percentage of rate changes passed to depositors) of approximately 55%, meaning TD retains 45% of each rate increase as margin expansion. The U.S. Retail segment generated CAD $15.74 billion in revenue in FY2025 (approximately 23% of total), with net interest income of CAD $12.37 billion and non-interest income of CAD $3.37 billion. This segment operates as TD Bank, America's Most Convenient Bank, with a network of branches primarily along the US East Coast from Maine to Florida. The segment's net income excluding the share of Schwab was CAD $3.72 billion on a reported basis and CAD $4.01 billion on an adjusted basis in FY2025. The US retail net interest margin was 3.15% in FY2025, benefiting from the higher-rate US environment. However, the segment is now operating under a $434 billion asset cap imposed by US regulators in October 2024, which prevents organic balance sheet growth and forces TD to shrink or restructure its US loan portfolio. The bank has identified certain US loan portfolios for sale or run-off under a balance sheet restructuring program. The Wealth Management and Insurance segment generated CAD $15.09 billion in revenue in FY2025 (approximately 22% of total), though this includes CAD $6.09 billion in insurance service expenses, making the net revenue contribution lower. The segment's net income was CAD $2.79 billion in FY2025, with a return on common equity of 43.1% in Q4 2025. Wealth Management alone generated net income of CAD $2.23 billion in FY2025, with assets under administration of CAD $759 billion and assets under management of CAD $601 billion. Revenue streams include management fees on AUA/AUM, net interest income on wealth lending products, and insurance premiums. The insurance business reported net income of CAD $562 million in FY2025, recovering from a loss of CAD $41 million in FY2024 that was driven by CAD $1.02 billion in catastrophe claims. The Wholesale Banking segment, which includes TD Securities and TD Cowen, generated CAD $7.99 billion in revenue in FY2025 (approximately 12% of total), with net income of CAD $1.80 billion on a reported basis and CAD $1.93 billion on an adjusted basis. The segment's return on equity was 15.0% in FY2025. Revenue is driven by trading-related revenue (CAD $3.47 billion in FY2025), corporate and investment banking fees (CAD $2.73 billion), and global markets activities. The TD Cowen acquisition, completed in March 2023 for $1.3 billion, added US equities capabilities, research, and investment banking advisory, with Cowen contributing approximately CAD $1.5 billion in annual revenue. The Corporate segment, which includes treasury activities, reported a net loss of CAD $1.34 billion in FY2025 on a reported basis and CAD $1.18 billion on an adjusted basis, reflecting funding costs, capital management activities, and the residual impact of the First Horizon termination strategy. The bank's overall revenue mix is approximately 49% net interest income (CAD $33.06 billion) and 51% non-interest income (CAD $34.72 billion), though the non-interest income figure is inflated by the $8.98 billion Schwab gain. Excluding this gain, the revenue mix is approximately 60% net interest income and 40% non-interest income, reflecting TD's traditional banking orientation. The bank's net interest margin was 1.88% in FY2025, down from 1.95% in FY2024, reflecting deposit margin compression as rates stabilized. The provision for credit losses was CAD $4.51 billion in FY2025, up from CAD $4.25 billion in FY2024, reflecting higher impaired provisions in both Canadian and US retail portfolios. The bank's efficiency ratio on an adjusted basis was 52.7% in FY2025, up from 51.8% in FY2024, with the increase driven by higher compliance costs and integration expenses. If the Canadian Personal and Commercial Banking segment's net interest income disappeared, TD would lose approximately 25% of its total revenue and its highest-margin, most stable income stream — the segment that generates a 31.4% return on equity and funds the bank's entire dividend.

TD Bank Group's growth strategy following the collapse of its First Horizon acquisition and the 2024 US anti-money-laundering settlement is focused on remediation, organic growth within constrained US retail assets, and accelerating its Canadian franchise and wealth management businesses. In Canada, TD remains the country's largest retail bank by branch network and is investing in its personal and commercial banking platform to defend market share in mortgages and deposits as the Bank of Canada easing cycle stimulates borrowing activity. The group is deepening its relationship with Canadian retail customers through TD MySpend, its budgeting and financial planning tool, and expanding its direct investing platform TD Direct Investing for self-directed investors. In the United States, TD is operating under an asset cap imposed by US regulators as part of the AML consent orders, which limits its ability to grow its balance sheet. Within that constraint, the strategy is to improve the profitability of its existing US retail footprint — particularly in the northeastern corridor from Maine to Florida — by repricing deposits, improving credit quality in its consumer lending portfolio, and investing in the banker and advisor workforce. On wealth management, TD Wealth and TD Asset Management are growth priorities, with the group targeting high-net-worth and mass-affluent Canadians who generate recurring fee income that buffers against net interest margin compression in rate cycles. TD Securities, the wholesale banking arm, is being positioned as a mid-market capital markets dealer across North America rather than a bulge-bracket competitor, a niche where the group's balance sheet strength and Canadian client relationships create durable advantages. The strategic timeline for the US business to return to full growth is likely 2026-2027, contingent on regulators lifting the asset cap after remediation programs are independently validated.