Toronto-Dominion Bank (TD.TO) reported a 27 drop in quarterly profit on Wednesday as Canada's second-largest lender more than doubled its provisions for bad loans as the Canadian and U.S. economies slumped.

TD said profits fell to C$712 million ($565 million), or 82 Canadian cents a share, in the three months ended Jan. 31, from C$970 million, or C$1.33 a share, in the same period a year earlier.

The bank said adjusted diluted earnings per share were C$1.34. Analysts had expected a profit of C$1.28 Canadian cents a share before items, according to Reuters Estimates.

The bank's shares initially weakened after the results were released before climbing higher.

Its provision for credit losses jumped to C$537 million in the latest period from C$255 million a year earlier.

($1=$1.26 Canadian)

(Reporting by Jeffrey Hodgson; Editing by Peter Galloway)