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UPDATE 1-TD Bank profit inches higher; stock split announced

Thursday, 5 Dec 2013 | 8:38 AM ET

* Profit misses estimates; wholesale banking income falls

* Bank to split stock, to raise dividend by 1.2 pct

* Extends shareholder agreement with TD Ameritrade to 2021

TORONTO, Dec 5 (Reuters) - Toronto-Dominion Bank, Canada's second-biggest bank, said on Thursday its quarterly profit rose 1.6 percent, missing expectations, and it announced a 2-for-1 stock split.

The bank also raised its dividend 1.2 percent.

TD, which in addition to its Canadian retail bank operates a 1,300-branch network on the U.S. East Coast, earned C$1.62 billion ($1.52 billion), or C$1.68 a share, in the fourth quarter that ended Oct. 31.

That compared with a year-earlier profit of C$1.60 billion, or C$1.66 a share.

Excluding a C$90 million restructuring charge, a C$59 million hit for amortization of intangibles, and other items, the bank earned C$1.90 a share, up from C$1.83.

Analysts on average had expected C$1.99, according to Thomson Reuters I/B/E/S.

The bank said it will split its shares by way of a stock dividend in January. TD's shares have risen 14 percent this year and closed at C$95.75 on Wednesday. Analysts had speculated a stock split might be in the offing due to the stock price's approach to the C$100 level.

"At some point you want to make sure that your shares are affordable for the retail investor," Colleen Johnston, the bank's chief financial officer, said in an interview.

TD also said it had extended through 2021 a shareholder agreement with U.S. online broker TD Ameritrade that limits TD's ownership of Ameritrade to 45 percent.

TD currently owns about 42 percent of Ameritrade, and the bank said it planned to sell about 5.5 million shares of Ameritrade - worth just less than $160 million at current prices - to give Ameritrade room to do share buybacks without risking pushing TD's holding above 45 percent.

The bank said the participation of Ameritrade's founding Ricketts family in the stockholders agreement will end at the original expiry date of January 2016.

TD's profit during the quarter was driven by its Canadian and U.S. retail banks, as well as its insurance division, and held back by a 61 percent plunge in income at its wholesale bank.

The bank said it will raise its quarterly dividend 1 Canadian cent to 86 Canadian cents per share.

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