DBRS confirmed its ratings on Toronto-Dominion Bank, citing the bank’s strong domestic banking franchise, its low business risk profile and strong capital levels.

The rating agency said that it expects TD’s Canadian personal and commercial banking business to provide ongoing earnings stability despite the weakening Canadian economy.

DBRS notes that the bank has been expanding its retail distribution network, hours, and improving its customer service index scores. TD has also been successful in growing its Canadian retail market shares in various businesses, and its large retail operations contribute to a lower business risk profile than some of its peers, DBRS said.

The bank has also been actively pursuing its growth strategy in U.S. retail banking — integrating its latest acquisitions, installing a new senior management team, and successfully re-branding its branches. That arm of the bank has been improving service levels too, DBRS notes.

DBRS says it believes that, in the longer term, the successful execution of its U.S. retail banking strategy will contribute positively to TD’s franchise, as it begins to generate acceptable earnings and comes to represent a platform for potential growth opportunities. The weak U.S. economy will make it more challenging to execute this strategy, it notes. But, so far, DBRS believes TD is on track with the integration of its latest major acquisition — Commerce Bancorp, Inc., which closed on March 31, 2008.