TD’s tech spend up 18% YoY to $458M

TD Bank is investing in technology to drive efficiency, reduce costs, and restructure operations with AI efforts at the forefront.  

The Toronto-based bank’s total technology and equipment expenses were CA$620 million ($458 million), up 18% year over year, according to its fiscal fourth-quarter (ending Oct. 31) earnings report.

Photo by Vaidik Trivedi

AI innovation has led to 55 patents for TD Bank since 2018, Chief Executive Bharat Masrani said during the bank’s earnings call on Nov. 30. 

The bank filed for a patent on Nov. 7 for a machine learning algorithm that can predict a consumer’s credit score, according to legal information database Justia. 

TD Bank sees “that the level of innovation with respect to technology is moving at quite a speed,” Masrani said, noting that the bank will continue to invest in technology to remain competitive. 

BIGGER PICTURE: The bank’s innovation efforts in fiscal Q4 included investment in its United States-based anti-money laundering program and the launch of its innovation hub, TD Invest, Masrani said during the call.  

TD Bank is in the top 11 banks globally for its AI efforts, according to a Nov. 15 report by AI solutions company Evident. The $3.7 trillion JPMorgan Chase and $467 billion Capital One led the list. 

WHY IT MATTERS: The $368 billion TD Bank initiated a restructuring program in Q4 to drive efficiency and control costs. The program included managing headcount and optimizing its real estate footprint, according to the company’s earnings presentation. 

The program resulted in a pre-tax restructuring charge of $268 million, and TD expects similar restructuring charges in the first half of 2024, Masrani said. 

At the end of fiscal Q4, headcount was 29,069, up 0.4% YoY, while the number of branches in Canada remained relatively flat at 1,062, according to the bank’s earnings. 

BY THE NUMBERS: In Q4, TD reported: 

  • Total revenue of $9.7 billion, down 15.6% YoY; 
  • Total deposits of $814 million, down 2.5% YoY; and 
  • Mobile usership in the U.S. of 4.9 million, up 8.9% YoY. 

NOTEWORTHY: The bank is exploring the use of AI for cross-selling products to its customers, Executive Vice President and Head of Commercial Banking Chris Giamo previously told Bank Automation News. 

On Nov. 14, TD launched TD Active Trader, a cloud-based trading platform, which allows investors to execute complex option calls and provides detailed charts about the markets, the bank’s release stated. 

MARKET REACTION: Shares of TD Bank [NYSE: TD] were down 0.48% from market open to $60.70 at market close today. TD’s has a market capitalization of $110 billion.  

Editor’s Note: All figures have been converted to U.S. dollars. 

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