(Reuters) — Toronto-Dominion Bank's quarterly profit fell 10% as Canada's No. 2 lender took 418 million Canadian dollars ($406.8 million) in charges related to insured flood losses, but the result topped estimates and the bank hiked its dividend by 5%.

TD, the final large Canadian bank to report results for the period, warned last month it would take insurance charges for higher provisions in its auto lending unit as well as losses from floods in Alberta and Ontario during the summer.

The bank earned CA$1.53 billion ($1.42 billion) in the third quarter ended July 31, compared with CA$1.70 billion ($1.70 billion) a year earlier.

Excluding a CA$59 million ($57.4 million) charge for the amortization of intangibles, a CA$70 million ($68.1 million) gain on the change in fair value of derivatives hedging, and other items, the profit was CA$1.65 ($1.61) a share.

A bright spot was loan growth at TD's retail banking business, which has about 2,400 branches in Canada and the United States.

Retail bank earnings rose 13% to CA$997 million ($970.2 million) in Canada and jumped 57% to CA$445 million ($433.0 million) in the United States, where TD has more than 1,300 branches on the Eastern Seaboard.

Wholesale banking income, which includes trading, investment banking, and advisory businesses, slid 18% to CA$147 million ($143.0 million) due to weaker trading revenue.

"Our wholesale quarter was a little bit softer, but all-in, the remainder of the business (outside of insurance) was very good," Chief Financial Officer Colleen Johnston said in an interview.

Canada's cooling housing sector and sluggish economy has squeezed consumer lending growth at the big Canadian banks, pressuring their largest revenue source.

This has prompted TD to bulk up its higher-margin lending in areas such as auto loans and credit cards.

Earlier this year, TD closed its acquisition of Target Corp.'s $5.9 billion U.S. credit card portfolio, and it is in talks to buy about half of Canadian Imperial Bank of Commerce's Aeroplan credit card portfolio.