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A view of a branch of a TD Canada Trust bank in Toronto November 9, 2007.

© Mark Blinch / Reuters/REUTERS

Toronto-Dominion Bank reported second-quarter profit Thursday of $1.69-billion, up from $1.4-billion a year ago.

But the bank signalled that the pace of growth in its earnings will be difficult to maintain, with loan growth slowing, low interest rates squeezing profit margins, and regulations posing new challenges.

The earnings amounted to $1.78 per share, up from $1.50 a year ago.

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The results came in slightly ahead of analysts' expectations, RBC Dominion Securities analyst Andre-Philippe Hardy said in a note to clients. Profit from consumer banking and wealth management was slightly higher than he expected, while wholesale banking earned a little less than he expected.

The bank's Canadian consumer and business banking segment posted profit of $808-million, up 10 per cent from a year ago.

The amount of mortgages and other real estate secured lending products the bank sold rose 7 per cent and auto loans rose 13 per cent, while other forms of personal lending were relatively flat.

Canadian businesses borrowed at a strong pace, with business loans up 14 per cent.

TD's U.S. consumer and business banking segment made $356-million (Canadian), 20 per cent more than a year ago, despite higher provisions for loan losses.

The bank's wealth management and insurance operations saw earnings rise 16 per cent to $365-million, even though the profit it receives from TD Ameritrade fell as the U.S. discount brokerage struggled with lower trading revenue.

Wholesale banking earned $197-million for the quarter, up 5 per cent, thanks to investment banking activities such as advising companies on takeovers and mergers. Higher expenses and poorer results in fixed income trading ate into those profits.

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