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TD expects Q1 earnings to be cut by US$400 million due to U.S. tax change

TD expects Q1 earnings to be cut by US$400 million due to U.S. tax change | iNFOnews.ca
A TD Canada Trust branch is shown in the financial district in Toronto on Tuesday, August 22, 2017. The reduction of the U.S. corporate tax rate enacted by the Tax Act will cause The Toronto-Dominion Bank ("TD" or the "Bank") (TSX and NYSE: TD) to adjust its U.S. deferred tax assets and liabilities to the lower base rate of 21 percent, and to adjust the carrying balances of certain tax credit-related and other investments. THE CANADIAN PRESS/Nathan Denette

Toronto-Dominion Bank expects its first-quarter results will be cut by about US$400-million due to changes in U.S. taxes, but says that a lower corporate tax rate will have a positive effect on future earnings.

Tax changes signed by U.S. President Donald Trump late last year cut the corporate income tax rate to 21 per cent, from 35 per cent.

The Toronto-based bank (TSX:TD) has extensive operations in the United States and the new tax rate will force it to adjust its U.S. deferred tax assets, liabilities and carrying balances.

The one-time impact from the adjustments is expected to reduce Toronto-Dominion’s common equity tier 1 ratio by approximately nine basis points.

TD Bank (TSX:TD) will report its first-quarter financial results on March 1.

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