TD expects $400M US cut to Q1 earnings due to U.S. tax change

Toronto-Dominion Bank expects its first-quarter results will be cut by about $400 million US 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 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 will report its first-quarter financial results on March 1.

Shares of TD were up by eight cents in early afternoon trading on Monday at $74.98 on the TSX.