TD Bank boss says moves toward protectionism ‘troubling’ amid NAFTA talks
TD Bank President and Chief Executive Officer Bharat Masrani said at his company’s annual meeting of shareholders in Toronto that the overall impact of NAFTA has been “very positive,” but that Canada, Mexico and the United States have undergone changes driven by technology and evolving customer preferences since the trade deal was implemented about 25 years ago.
“As a result, there is a need to modernize this trade agreement, but not eliminate it,” Masrani said. “That’s why the rhetoric and recent moves toward protectionism is so troublesome. My hope is that the merits of this partnership prevail — so we can look for ways to make NAFTA even better — even stronger — for each country.”
TD, the second-biggest Canadian bank by market cap, has a large business in the U.S. that generates more than a third of its earnings.
But negotiations around NAFTA have yet to produce a new deal, and there is still a possibility that the administration of U.S. President Donald Trump could impose steel and aluminum tariffs on Canada and Mexico that they had previously been exempted from.
TD reported profits last year of more than $10.5 billion, an 18-per-cent increase over the previous year. The lender got off to a hot start in 2018 as well, reporting, arguably, the best first quarter of the big Canadian banks, with earnings of $2.4 billion despite taking a one-time, $453-million hit tied to tax reform in the United States.
The recent cut to the corporate tax rate in the U.S. will ultimately have “a positive effect” on TD’s earnings, the bank said in its first quarter results.
TD also said Wednesday that it planned to buy back up to 20 million of its shares, or about 1.1 per cent of its listed and outstanding common stock. The bank said it had previously repurchased 22.98 million shares under a normal course issuer bid that was announced in March 2017, at a total cost of $1.4 billion, or $60.78 per share.
Masrani said the bank’s performance in the first quarter made him feel “optimistic” about the year ahead.
“But there are risks on the horizon,” he added. “As just one example, trade wars are top-of-mind nowadays.”
Financial Post
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