Toronto-Dominion Bank on Thursday reported a drop in third-quarter profit as the Canadian lender set aside more rainy-day funds to cover losses from borrowers who might fall behind on loan payments.

The bank reported adjusted net income of C$3.73 billion ($2.76 billion), or C$1.99 per share, in the three months ended July 31, compared with C$3.81 billion, or C$2.09 apiece, a year earlier.

($1 = 1.3538 Canadian dollars)

(Reporting by Pritam Biswas in Bengaluru; Editing by Shweta Agarwal)