Investing in bank stocks usually takes patience. The economy moves in cycles, interest rates go up and down, and lending conditions change. But the strongest banks keep growing through it all. And Toronto-Dominion Bank (TSX:TD), or TD Bank, is a good example of that.
After spending the past year adjusting its strategy and strengthening its balance sheet, TD posted solid financial results for fiscal 2025. Its main business segments are bringing in record revenue, and management is keeping a close eye on costs. In this article, I’ll highlight why this Canadian bank stock could be worth buying right now.
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A diversified North American banking giant
In short, TD is one of the largest and most diversified banks trading on the TSX. It operates through four main areas: Canadian personal and commercial banking, U.S. retail, wealth management and insurance, and wholesale banking. Because it earns money from several different businesses, it is not dependent on a single source of income. That helps it stay balanced through different economic conditions in both Canada and the United States.
After rallying 52% over the last year, TD stock is currently trading around $134 per share. That gives it a market cap of about $224.3 billion. It also pays a quarterly dividend, which works out to an annual yield of roughly 3.2%.
Improving earnings momentum
Notably, TD reported net income of $3.3 billion in the fourth quarter of its fiscal year 2025 (three months ended in October). While that was down 10% compared with last year, its adjusted net income still rose 22% YoY (year-over-year) to $3.9 billion. Overall, the bank’s core business performed better than the headline numbers suggest.
Looking at the full year, TD reported net income of $20.5 billion, compared with just $8.8 billion in fiscal 2024, as profitability across its main businesses remained solid.
Record performance across key segments
TD’s Canadian personal and commercial banking division delivered record revenue of $5.3 billion in the latest quarter, up 5% YoY. Similarly, its average loan volumes grew 5% from a year ago, and average deposit volumes increased 4% YoY. That consistent growth shows TD continues to hold a strong position in its home market.
Meanwhile, its wholesale banking also had an impressive quarter, with revenue reaching a record $2.2 billion, up 24% YoY. This performance was mainly helped by strength in global markets and corporate and investment banking.
All of this means TD is not relying on only one part of its business to drive results. It has several business divisions performing well at the same time.
Strong capital and a clear long-term strategy
TD remains financially strong as it finished fiscal 2025 with a Common Equity Tier 1 capital ratio of 14.7%, which is well above regulatory minimum requirements. The bank’s total loans stood at $953 billion, and total deposits reached $1.3 trillion. Those figures highlight the size and stability of TD Bank.
Although it’s still working on governance improvements and certain U.S. remediation efforts, most of its major balance sheet restructuring is now complete. With stronger adjusted profitability, record revenue in key segments, and a solid capital cushion, TD appears ready to handle changing economic conditions, making it a great Canadian bank stock to buy right now.
