TD's net interest margin has dropped sharply. It has a large US business, and in the US banking crisis this year deposit rates soared as banks tried to keep customers' money from leaving. Thus, TD got squeezed on margins. RY does not have the same amount of US exposure. TD is also experiencing labour cost pressure and rising loan losses. Its loss provisions were 4% higher than estimates. Wtih costs rising, we do think it would make sense for TD to at least put a hiring freeze on, or look for other cost-saving measures. That being said, at 9X earnings with a secure 4.8% dividend, we would still be OK buying, if one has a decent timeframe. Sentiment is very negative, but it remains highly profitable and some earnings growth is still expected in 2024.
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