Economically, things are “going to get worse before they get better,” says the mainstream economic and business media, speaking directly to a quote by Ed Clark, chief executive of TD Bank, spoken Wednesday.

Canada’s second largest bank saw it’s net income fall by more than 25% this quarter, as it was forced to hold more capital to cover bad loans and significant expected and realized losses on financial markets. This report marks the beginning of widespread reports that Canadian banks are hitting a period of high uncertainty reducing the ability to invest and make decisions that may risk the stability of our financial industry.

Canada’s Bay Street is suffering, realizing losses of more than 50 per cent of the value seen in the Toronto Stock Exchange’s bank index prior to the end of last year’s credit crunch, as a result of $16 billion in writedowns directly impacting Canadian banks. TD, however, found itself almost immune to the early writedowns relative to banks such as RBC and the Bank of Nova Scotia; exposure to the contracting American economy has hurt Toronto-Dominion more than any other bank.

This net income fall, as well as a $200 million hit on debt securities and a resetting to $537 million for provisions for defaulted and bad loans marked the bank’s primary announcements Wednesday.

TD raised $3.3 billion in what Ed Clark is calling a “capital cushion,” providing an “added layer of comfort” to the security of the bank. Bank officials are “not concerned” about the bank’s capital situation.

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